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Approximately 29 per cent of ARC’s current P+P reserves are crude oil, five per cent are natural gas liquids and 66 per cent are natural gas on a 6:1 conversion basis. As ARC develops its Montney assets in northeast British Columbia, the natural gas component will increase. 

## RESERvE LIFE InDEX (“RLI”) 

ARC’s P+P RLI was 15.2 years at year-end 2010 while the proved RLI was 10.4 years based upon the gLJ reserves and ARC’s 2011 production guidance mid-point of 85,500 boe per day. The increase in the P+P RLI from 2008 through 2010 is attributed to the successful development of the Montney region and the resultant increase in P+P reserves. The following table summarizes ARC’s historical RLI. 

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in the year-end 2010 reserves evaluation. the 2011 production guidance of 85,500 boe per day excluded production from the divested assets of approximately 3,400 boe per day. 

## nET PRESEnT vALUE (“nPv”) SUMMARY 

ARC’s crude oil, natural gas and natural gas liquids reserves were evaluated using gLJ Petroleum Consultants Ltd’s (“gLJ”) product price forecasts effective January 1, 2011 prior to provision for interest, debt service charges and general and administrative expenses. It should not be assumed that the nPv estimated by gLJ represents the fair market value of the reserves. 

## npv oF CAsh FloW beFoRe InCoMe tAXes usInG GlJ JAnu ARY 1, 2011 FoReCAst pRICes AnD Costs  (1 ) 

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(1) Additional information on reserves is available in the Annual information form and in the february 10, 2011 news release titled “Arc resources ltd. 2010 year-end reserves increase by 29 per cent”. 

