ARC Energy Trust releases 2007 year-end reserves information



    CALGARY, Feb. 14 /CNW/ - (AET.UN and ARX - TSX) ARC Energy Trust ("ARC")
released today its 2007 year-end reserves information.

    
    HIGHLIGHTS

    -   Replaced 101 per cent of annual production at an all-in annual
        Finding, Development and Acquisition ("FD&A") cost of $19.00 per
        barrel of oil equivalent ("boe") before consideration of future
        development capital ("FDC") for the proved plus probable reserves
        category. This is a 15 per cent reduction from the $22.42 per boe
        FD&A cost realized in 2006. Including FDC, the FD&A cost was $20.03
        per boe.
    -   The three year average FD&A cost is $16.57 per boe for the proved
        plus probable category before FDC; including FDC, the three year
        average FD&A cost is $19.19 per boe.
    -   2007 year-end reserves are within one per cent of the year-end
        2006 levels with proved reserves of 225 mmboe, and proved plus
        probable reserves of 286 mmboe.
    -   Proved plus probable reserve life index ("RLI") increased to
        12.5 years and the proved RLI remained constant at 9.8 years based on
        2008 production guidance of 63,000 boe per day.
    -   $87 million (20 per cent) of the $440 million expenditures in 2007
        were devoted to the purchase of highly prospective crown mineral
        rights and the acquisition of third party undeveloped acreage
        primarily in the Dawson area of northern British Columbia. These
        lands have not been given any value in the 2007 Reserves evaluation.
        Excluding these extraordinary expenditures reduces the proved plus
        probable FD&A to $15.24/boe ($16.28 including FDC).
    -   Net acquisition activity represented $42.5 million, or 10 per cent of
        2007 corporate spending and resulted in 1.7 mmboe of proved plus
        probable reserves acquired at an average cost of $24.29 per boe
        (excluding FDC).
    -   Based on our operating netback of $34.82 per boe, the one year
        recycle ratio is 1.8 times, using our $19.00 per boe proved plus
        probable FD&A cost prior to FDC.
    

    RESERVES

    Reserves included herein are stated on a company interest basis (before
royalty burdens and including royalty interests) unless noted otherwise. All
reserves information has been prepared in accordance with National Instrument
("NI") 51-101. This report contains several cautionary statements that are
specifically required by NI 51-101. In addition to the detailed information
disclosed in this news release more detailed information on a net basis
(working interest share after deduction of royalty obligations, plus royalty
interests) and on a gross basis (working interest before deduction of
royalties without including any royalty interests) will be included in ARC's
Annual Information Form ("AIF").
    Based on an independent reserves evaluation conducted by GLJ Petroleum
Consultants Ltd. ("GLJ") effective December 31, 2007 and prepared in
accordance with definitions, standards and procedures contained in the
Canadian Oil and Gas Evaluation Handbook ("COGEH") and NI 51-101, ARC had
proved plus probable reserves of 286.4 mmboe(1). Reserve additions from
exploration and development activities (including revisions) were 21.4 mmboe
while 1.7 mmboe were added through acquisitions (net of minor dispositions),
bringing the total additions to 23.1 mmboe. This represents 101 per cent of
the 22.9 mmboe produced during 2007. As a result, year-end 2007 reserves are
slightly higher than the 286.1 mmboe of proved plus probable reserves recorded
at year-end 2006.
    Proved developed producing reserves represent 85 per cent of total proved
reserves and 65 per cent of proved plus probable reserves; total proved
reserves account for 79 per cent of proved plus probable reserves.
Approximately 55 per cent of ARC's proved plus probable reserves are crude oil
and natural gas liquids and 45 per cent are natural gas on a 6:1 boe
conversion basis.

    
    ---------------------------
    (1) BOEs may be misleading, particularly if used in isolation. In
        accordance with NI 51-101, a BOE conversion ratio for natural gas of
        6 Mcf: 1 bbl has been used, which is based on an energy equivalency
        conversion method primarily applicable at the burner tip and does not
        represent a value equivalency at the wellhead.


    RESERVES SUMMARY 2007 Using GLJ January 1, 2008 Forecast Prices and Costs
    -------------------------------------------------------------------------
    Company Interest (Gross + Royalties Receivable)

                                                                Oil      Oil
             Light and    Heavy    Total             Total     Equi-    Equi-
                Medium    Crude    Crude           Natural   valent   valent
             Crude Oil      Oil      Oil     NGLs      Gas     2007     2006
                 (mbbl)   (mbbl)   (mbbl)   (mbbl)    (bcf)   (mboe)   (mboe)
    -------------------------------------------------------------------------
    Proved
     Producing  98,495    2,436  100,931    9,448    449.9  185,364  187,501
    Proved
     Developed
     Non-
     Producing   1,175      117    1,292      486     28.8    6,582    4,707
    Proved
     Undevel-
     oped       11,134       11   11,145    1,484    122.3   33,007   34,055
    Total
     Proved    110,805    2,564  113,369   11,418    601.0  224,953  226,264
    Proved
     plus
     Probable  140,528    3,390  143,918   14,423    768.2  286,371  286,125
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Gross

                                                                Oil      Oil
             Light and    Heavy    Total             Total     Equi-    Equi-
                Medium    Crude    Crude           Natural   valent   valent
             Crude Oil      Oil      Oil     NGLs      Gas     2007     2006
                 (mbbl)   (mbbl)   (mbbl)   (mbbl)    (bcf)   (mboe)   (mboe)
    -------------------------------------------------------------------------
    Proved
     Producing  98,381    2,224  100,605    9,280    438.9  183,042  184,959
    Proved
     Developed
     Non-
     Producing   1,174      117    1,291      486     28.8    6,581    4,706
    Proved
     Undevel-
     oped       11,131       11   11,142    1,484    122.1   32,970   34,017
    Total
     Proved    110,686    2,353  113,039   11,249    589.8  222,592  223,681
    Proved
     plus
     Probable  140,384    3,134  143,518   14,218    754.9  283,550  283,015
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net

             Light and    Heavy    Total             Total     Equi-    Equi-
                Medium    Crude    Crude           Natural   valent   valent
             Crude Oil      Oil      Oil     NGLs      Gas     2007     2006
                 (mbbl)   (mbbl)   (mbbl)   (mbbl)    (bcf)   (mboe)   (mboe)
    -------------------------------------------------------------------------
    Proved
     Producing  88,697    2,258   90,955    6,670    372.7  159,738  161,498
    Proved
     Developed
     Non-
     Producing   1,042      108    1,150      342     22.0    5,156    3,790
    Proved
     Undevel-
     oped        9,566       11    9,577    1,054     96.2   26,661   27,975
    Total
     Proved     99,305    2,377  101,682    8,065    490.8  191,553  193,263
    Proved
     plus
     Probable  125,553    3,146  128,699   10,241    628.7  243,727  243,994
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    RESERVES RECONCILIATION
    -------------------------------------------------------------------------
    Company Interest (Gross + Royalties Receivable)
                                  Light and
                                     Medium     Heavy      Total
                                  Crude Oil  Crude Oil     Crude Oil    NGLs
                                      (mbbl)     (mbbl)    (mbbl)      (mbbl)
    -------------------------------------------------------------------------
    PROVED PRODUCING
    Opening Balance                  99,543      2,759    102,302      9,627
      Exploration Discoveries             0          0          0          0
      Drilling Extensions               651         15        666         82
      Improved Recovery               1,769         30      1,798        184
      Infill Drilling                 2,307          0      2,307        307
      Technical Revisions             2,343         20      2,363        621
      Acquisitions                      912          0        912         90
      Dispositions                     (162)         0       (162)       (24)
      Economic Factors                1,164         49      1,213         32
      Production                    (10,032)      (437)   (10,469)    (1,470)
    Closing Balance                  98,495      2,436    100,931      9,448
    -------------------------------------------------------------------------
    TOTAL PROVED
    Opening Balance                 112,780      2,773    115,553     11,768
      Exploration Discoveries             0          0          0          5
      Drilling Extensions               370        129        499        112
      Improved Recovery               1,891         16      1,907         56
      Infill drilling                 2,298          0      2,298        322
      Technical Revisions             1,510         34      1,544        527
      Acquisitions                    1,020          0      1,020         97
      Dispositions                     (162)         0       (162)       (24)
      Economic Factors                1,128         49      1,177         25
      Production                    (10,032)      (437)   (10,469)    (1,470)
    Closing Balance                 110,805      2,564    113,368     11,418
    -------------------------------------------------------------------------
    PROBABLE
    Opening Balance                  30,966        904     31,870      3,002
      Exploration Discoveries             0          0          0          1
      Drilling Extensions               388         92        480         33
      Improved Recovery                 408        (16)       392         13
      Infill Drilling                   510          0        510         43
      Technical Revisions            (2,379)      (157)    (2,536)       (86)
      Acquisitions                      248          0        248         15
      Dispositions                      (23)         0        (23)        (5)
      Economic Factors                 (394)         2       (392)       (12)
      Production                          0          0          0          0
    Closing Balance                  29,723        826     30,549      3,005
    -------------------------------------------------------------------------
    PROVED PLUS PROBABLE
    Opening Balance                 143,746      3,677    147,423     14,770
      Exploration Discoveries             0          0          0          7
      Drilling Extensions               758        221        979        145
      Improved Recovery               2,299          0      2,299         69
      Infill Drilling                 2,809          0      2,809        365
      Technical Revisions              (869)      (122)      (991)       441
      Acquisitions                    1,267          0      1,267        113
      Dispositions                     (185)         0       (185)       (30)
      Economic Factors                  734         51        785         13
      Production                    (10,032)      (437)   (10,469)    (1,470)
    Closing Balance                 140,528      3,390    143,917     14,423
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                                         Oil
                               Conventional    Natural      Total Equivalent
                                    Natural   Gas from    Natural       2007
                                   Gas (bcf) Coal (bcf)  Gas (bcf)     (mboe)
    -------------------------------------------------------------------------
    PROVED PRODUCING
    Opening Balance                   449.4        4.0      453.4    187,501
      Exploration Discoveries           0.0        0.0        0.0          0
      Drilling Extensions               6.2        2.8        8.9      2,235
      Improved Recovery                 3.3        0.9        4.3      2,691
      Infill Drilling                  29.2        0.0       29.2      7,480
      Technical Revisions              18.5       (0.2)      18.4      6,042
      Acquisitions                      2.4        0.3        2.7      1,446
      Dispositions                     (0.4)       0.0       (0.4)      (245)
      Economic Factors                 (0.8)       0.0       (0.8)     1,107
      Production                      (64.9)      (0.9)     (65.7)   (22,894)
    Closing Balance                   443.0        6.9      449.9    185,364
    -------------------------------------------------------------------------
    TOTAL PROVED
    Opening Balance                   585.7        8.0      593.7    226,264
      Exploration Discoveries           0.9        0.0        0.9        156
      Drilling Extensions              10.6        4.8       15.4      3,172
      Improved Recovery                 1.4        0.4        1.8      2,257
      Infill drilling                  22.8        0.0       22.8      6,422
      Technical Revisions              31.0       (0.5)      30.5      7,155
      Acquisitions                      2.5        0.5        3.0      1,625
      Dispositions                     (0.4)       0.0       (0.4)     (245)
      Economic Factors                 (1.0)       0.0       (1.0)     1,040
      Production                      (64.9)      (0.9)     (65.7)   (22,894)
    Closing Balance                   588.7       12.3      601.0    224,953
    -------------------------------------------------------------------------
    PROBABLE
    Opening Balance                   144.5        5.4      149.9     59,861
      Exploration Discoveries           0.2        0.0        0.2         31
      Drilling Extensions               4.4        1.3        5.8      1,472
      Improved Recovery                 0.3        0.1        0.4        465
      Infill Drilling                   7.9        0.0        7.9      1,874
      Technical Revisions               2.6        0.1        2.7     (2,166)
      Acquisitions                      0.4        0.5        0.9        408
      Dispositions                     (0.1)       0.0       (0.1)       (41)
      Economic Factors                 (0.5)       0.0       (0.5)      (487)
      Production                        0.0        0.0        0.0          -
    Closing Balance                   159.8        7.4      167.2     61,418
    -------------------------------------------------------------------------
    PROVED PLUS PROBABLE
    Opening Balance                   730.2       13.4      743.6    286,125
      Exploration Discoveries           1.1        0.0        1.1        187
      Drilling Extensions              15.0        6.1       21.1      4,645
      Improved Recovery                 1.7        0.4        2.1      2,723
      Infill Drilling                  30.7        0.0       30.7      8,296
      Technical Revisions              33.6       (0.4)      33.2      4,989
      Acquisitions                      2.9        1.0        3.9      2,032
      Dispositions                     (0.4)       0.0       (0.4)      (285)
      Economic Factors                 (1.5)       0.0       (1.5)       554
      Production                      (64.9)      (0.9)     (65.7)   (22,894)
    Closing Balance                   748.5       19.7      768.2    286,371
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Additional reserves reconciliation information on a Gross Interest basis
is included at the end of this news release.

    RESERVE LIFE INDEX ("RLI")

    ARC's proved plus probable RLI was 12.5 years at year-end 2007 while the
proved RLI was 9.8 years based upon the GLJ reserves and ARC's 2008 production
guidance of 63,000 boe per day. The following table summarizes ARC's
historical RLI.

    Reserve Life Index
                              2007  2006  2005  2004  2003  2002  2001  2000
    -------------------------------------------------------------------------

    Total Proved               9.8   9.8  10.3   9.7  10.1  10.1   9.8  10.4
    Proved Plus Probable
     (Established reserves
     for 2002 and prior
     years)                   12.5  12.4  12.9  12.2  12.4  11.8  11.5  12.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    NET PRESENT VALUE ("NPV") SUMMARY 2007

    ARC's crude oil, natural gas and natural gas liquids reserves were
evaluated using GLJ's product price forecasts effective January 1, 2008 prior
to provision for interest, debt service charges and general and administrative
expenses. It should not be assumed that the discounted future net production
revenues estimated by GLJ represent the fair market value of the reserves.

    NPV of Cash Flow Before Income Taxes Using GLJ January 1, 2008 Forecast
    Prices and Costs

                                          Dis-      Dis-      Dis-      Dis-
                              Undis-   counted   counted   counted   counted
    NI 51-101 Net interest   counted     at 5%    at 10%    at 15%    at 20%
                                 $MM       $MM       $MM       $MM       $MM
    -------------------------------------------------------------------------

    Proved Producing           6,401     4,433     3,471     2,894     2,506
    Proved Developed
     Non-Producing               216       148       113        91        76
    Proved Undeveloped           946       578       384       268       192
    Total Proved               7,563     5,159     3,968     3,253     2,774
    Probable                   2,428     1,146       684       464       340
    Proved plus Probable       9,991     6,305     4,651     3,717     3,113
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    At a 10 per cent discount factor, the proved producing reserves make up 75
per cent of the proved plus probable value while total proved reserves account
for 85 per cent of the proved plus probable value.
    The following table provides an estimate of the NPV of Cash Flow on an
after tax basis assuming that ARC would be subject to the equivalent of
corporate income tax on its income beginning in 2011. It should be noted that
this estimate does not take into account any corporate tax deductions such as
interest and general and administrative expenses or for any tax pools
generated by capital expenditures beyond what exists in the GLJ forecast.
Details of ARC's tax pools at year-end 2007 are presented in the MD&A section
of the year-end financial results news release dated February 14, 2008.

    NPV of Cash Flow After Income Taxes Using GLJ January 1, 2008 Forecast
    Prices and Costs

                                          Dis-      Dis-      Dis-      Dis-
                              Undis-   counted   counted   counted   counted
    NI 51-101 Net interest   counted     at 5%    at 10%    at 15%    at 20%
                                 $MM       $MM       $MM       $MM       $MM
    -------------------------------------------------------------------------

    Proved Producing           5,479     3,920     3,140     2,662     2,335
    Proved Developed
     Non-Producing               173       122        95        78        66
    Proved Undeveloped           724       445       296       205       145
    Total Proved               6,376     4,487     3,530     2,945     2,545
    Probable                   1,781       855       517       355       263
    Proved plus Probable       8,157     5,342     4,048     3,300     2,809
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    GLJ January 1, 2008 Price Forecast
    -------------------------------------------------------------------------
                              West Texas    Edmonton     Natural
                            Intermediate       Light      Gas at     Foreign
                               Crude Oil   Crude Oil        AECO    Exchange
    Year                        ($US/bbl)  ($Cdn/bbl)($Cdn/mmbtu)  ($US/$Cdn)
    -------------------------------------------------------------------------
                2008              92.00        91.10        6.75        1.00
                2009              88.00        87.10        7.55        1.00
                2010              84.00        83.10        7.60        1.00
                2011              82.00        81.10        7.60        1.00
                2012              82.00        81.10        7.60        1.00
                2013              82.00        81.10        7.60        1.00
                2014              82.00        81.10        7.80        1.00
                2015              82.00        81.10        7.97        1.00
                2016              82.02        81.12        8.14        1.00
                2017              83.66        82.76        8.31        1.00
    Escalate thereafter at     +2.0%/yr     +2.0%/yr    +2.0%/yr        1.00
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The reserves have also been evaluated using constant prices and costs
effective December 31, 2007. Following are the values determined using this
constant price analysis.

    NPV of Cash Flow Before Income Taxes Using December 31, 2007 Constant
    Prices and Costs

                                          Dis-      Dis-      Dis-      Dis-
    NI 51-101 Net interest    Undis-   counted   counted   counted   counted
    $Millions                counted     at 5%    at 10%    at 15%    at 20%
    -------------------------------------------------------------------------

    Proved Producing           6,866     4,742     3,691     3,059     2,634
    Proved Developed
     Non-Producing               197       139       106        86        72
    Proved Undeveloped           888       554       373       262       189
    Total Proved               7,950     5,435     4,171     3,408     2,894
    Probable                   2,189     1,110       689       477       354
    Proved plus Probable      10,139     6,545     4,860     3,885     3,248
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    At a 10 per cent discount factor, the proved producing reserves make up 76
per cent of the proved plus probable value while total proved reserves account
for 86 per cent of the proved plus probable value. The same comments apply to
the after tax NPV of cash flow using constant prices and costs as for forecast
pricing.

    NPV of Cash Flow After Income Taxes Using December 31, 2007 Constant
    Prices and Costs

                                          Dis-      Dis-      Dis-      Dis-
    NI 51-101 Net interest    Undis-   counted   counted   counted   counted
    $Millions                counted     at 5%    at 10%    at 15%    at 20%
    -------------------------------------------------------------------------
    Proved Producing           5,823     4,151     3,305     2,787     2,432
    Proved Developed
     Non-Producing               158       114        90        74        63
    Proved Undeveloped           682       428       288       200       142
    Total Proved               6,663     4,692     3,683     3,061     2,637
    Probable                   1,613       831       523       367       275
    Proved plus Probable       8,276     5,523     4,205     3,428     2,911
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Constant Prices at December 31, 2007
    -------------------------------------------------------------------------
                              West Texas    Edmonton     Natural
                            Intermediate       Light      Gas at     Foreign
                               Crude Oil   Crude Oil        AECO    Exchange
    Year                        ($US/bbl)  ($Cdn/bbl)($Cdn/mmbtu)  ($US/$Cdn)
    -------------------------------------------------------------------------
    2008 and thereafter            95.95       93.39        6.63       1.012
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    ALBERTA NEW ROYALTY FRAMEWORK

    In October 2007, the Alberta government announced its intent to increase
crown royalties beginning on January 1, 2009. As of December 31, 2007, the
province had not introduced the enabling legislation nor had they provided
enough clarity on a number of issues for GLJ to provide a precise calculation
of net reserves and NPV under the new royalty regime. However, GLJ did provide
analyses which estimate that under the proposed royalty regime as currently
understood, the NPV at a 10 per cent discount rate using GLJ January 2008
price forecast would be between two and three per cent less than stated in the
previous tables. The new royalty provisions have a relatively modest impact on
ARC's NPV as 37 per cent of ARC's 2008 production is expected to come from
outside the Province of Alberta and due to the relatively low production rates
for many of ARC's wells that are not impacted as significantly as high rate
wells.

    NET ASSET VALUE

    The following net asset value ("NAV") table shows what is normally
referred to as a "produce-out" NAV calculation under which the Trust's
reserves would be produced at forecast future prices and costs. The value is a
snapshot in time and is based on various assumptions including commodity
prices and foreign exchange rates that vary over time. It should not be
assumed that the discounted future net production revenues estimated by GLJ
represent the fair market value of the reserves.


    NAV at December 31, 2007(a)
    -------------------------------------------------------------------------
                                                      2007 NAV      2006 NAV
                                                     GLJ Price     GLJ Price
    $Millions, except per unit amounts                Forecast      Forecast
    -------------------------------------------------------------------------
    NI 51-101 Net interest Proved Plus
     Probable Reserves discounted @ 10% (Before
     Tax)(b)                                            $4,651        $4,056
    Undeveloped Lands(c)                                  $229          $109
    Working Capital Deficit (including current
     portion of debt)(d)                                  $(38)         $(52)
    Reclamation Fund                                       $26           $31
    Risk Management Contracts(e)                          $(30)          $(9)
    Long-term Debt                                       $(715)        $(687)
    Asset Retirement Obligation(f)                        $(26)         $(62)
    -------------------------------------------------------------------------
    Net Asset Value                                     $4,097        $3,386
    Units Outstanding (000's)(g)                       213,179       207,173
    -------------------------------------------------------------------------
    NAV/Unit                                            $19.22        $16.34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (a) Financial information is per ARC's 2007 consolidated financial
        statements.
    (b) Excludes estimated future taxes of $603 million for the GLJ Price
        Forecast, based on $1.8 billion in estimated Trust tax pools as at
        December 31, 2007. The estimated future taxes were calculated
        assuming ARC would be subject to the equivalent of corporate income
        tax on its income beginning in 2011. Estimated future taxes do not
        take into account any corporate tax deductions such as interest or
        general and administrative expenses
    (c) Internal estimate.
    (d) Working capital deficit excludes risk management contracts and future
        income tax asset.
    (e) Risk management contracts represent the fair market value of such
        contracts as at December 31, 2007 based on the GLJ future pricing
        used to arrive at the value of proved plus probable reserves. This
        amount differs from the value of risk management contracts in the
        2007 consolidated financial statements due to differing future
        pricing assumptions.
    (f) The Asset Retirement Obligation ("ARO") is calculated based on the
        same methodology that was used to calculate the ARO on ARC's year-end
        financial statements, with the exception that future expected ARO
        costs were discounted at 10 per cent. The total discounted ARO at
        10 per cent of $70 million was reduced by $44 million and $35 million
        respectively, relating to well abandonment costs that were
        incorporated in the proved plus probable reserves discounted at
        10 per cent pursuant to the escalated price case as per NI 51-101.
    (g) Represents total trust units outstanding and trust units issuable for
        exchangeable shares as at December 31, 2007.

    In the absence of adding reserves to the Trust, the NAV per unit will
decline as the reserves are produced out. The cash flow generated by the
production relates directly to the cash distributions paid to unitholders. The
evaluation includes future capital expenditure expectations required to bring
undeveloped reserves on production. ARC works continuously to add value,
improve profitability and increase reserves, which enhances the Trust's NAV.
    In order to determine the "going concern" value of the Trust, a more
detailed assessment would be required of the upside potential of specific
properties and the ability of the ARC team to continue to make value-adding
capital expenditures. At inception of the Trust on July 16, 1996, the NAV was
determined to be $11.42 per unit based on a 10 per cent discount rate; since
that time, including the January 2008 distribution, the Trust has distributed
$21.03 per unit. Despite having distributed more cash than the initial NAV,
the NAV as at December 31, 2007 was $19.22 per unit using GLJ prices. NAV per
unit using GLJ prices increased $2.88 per unit during 2007 after distributing
$2.40 per unit to unitholders as a result of increases in commodity prices as
well as ARC's development activities. Following is a summary of historical
NAVs calculated at each of the Trust's year-ends utilizing the then current
GLJ price forecasts and other assumptions and values utilized at such times.

    Historical NAV - Discounted at 10 Per Cent
    -------------------------------------------------------------------------
    $Millions,
     except per
     unit amounts       2007    2006    2005    2004    2003    2002    2001
    ------------------------------------------------------------------------
    NI 51-101 Net
     interest Proved
     plus Probable
     reserves(a)      $4,651  $4,056  $3,891  $2,389  $1,689  $1,302  $1,216
    Undeveloped lands    229     109      59      48      50      20      22
    Reclamation fund      26      31      23      21      17      13      10
    Risk Management
     Contracts(b)       $(30)     (9)     (2)    (12)
    Long term-debt,
     net of working
     capital           $(753)   (739)   (578)   (265)   (262)   (348)   (289)
    Asset retirement
     obligation         $(26)    (62)    (35)    (23)    (27)      -       -
    -------------------------------------------------------------------------
    Net asset value   $4,097  $3,386  $3,358  $2,158  $1,467    $987    $959
    Units outstanding
     (000's)         213,179 207,173 202,039 188,804 182,777 126,444 111,692
    -------------------------------------------------------------------------
    NAV per unit      $19.22  $16.34  $16.62  $11.43   $8.03   $7.81   $8.59
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (a) Proved plus Probable from 2003 and on is estimated in accordance with
        NI 51-101 while in prior years it represents Established reserves
        (which represent proved plus risked probables).
    (b) Risk management contracts were included in the value of proved plus
        probable reserves prior to 2004.
    

    FINDING, DEVELOPMENT AND ACQUISITION ("FD&A") COSTS

    Under NI 51-101, the methodology to be used to calculate FD&A costs
includes incorporating changes in future development capital ("FDC") required
to bring the proved undeveloped and probable reserves to production. For
continuity, ARC has presented herein FD&A costs calculated both excluding and
including FDC.
    The aggregate of the exploration and development costs incurred in the
most recent financial year and the change during that year in estimated future
development costs generally will not reflect total finding and development
costs related to reserves additions for that year.

    FINDING AND DEVELOPMENT COSTS ("F&D")

    During 2007 ARC spent $397 million of capital on exploration and
development activities, which added 20.2 mmboe of proved and 21.4 mmboe of
proved plus probable reserves (including revisions). These activities replaced
88 and 93 per cent of ARC's 2007 production. In total, ARC drilled 278 gross
operated wells with a 99 per cent per cent drilling success rate.
    The largest percentage of capital was again devoted towards development
opportunities in northern Alberta and British Columbia. In Dawson the
successful drilling of six horizontal and six vertical Montney gas wells
helped grow production by over 80 per cent. With the commissioning of new
third party processing facilities in the fourth quarter of 2007, a record exit
rate of 44 mmcf per day was achieved. Significant funds and efforts were also
focused in the Dawson area with successful exploration and step-out drilling
and a substantial increase in highly prospective undeveloped land. It should
be noted that no reserves have been booked for the ARC Sunrise 9-13 Montney
gas discovery drilled in the fourth quarter of 2007. ARC would expect to book
reserves at year-end 2008 for this well and the surrounding acreage if
commercial gas rates are confirmed during the year. In Ante Creek, ARC drilled
11 successful oil wells, and acquired undeveloped acreage. A 16 km gas
pipeline was installed to the previously acquired processing facility and
water-flood injectivity was improved in the oil area. These factors combined
to help boost production to record levels of approximately 5,100 boe per day.
Other areas in the north that saw successful development included Valhalla,
Pouce Coupe, Chinchaga, Swan Hills and Prestville. Exploration efforts in the
Junior Tees area of Northern British Columbia were unsuccessful in realizing
economic productive capability.
    The most active drilling areas in 2007 were in ARC's shallow gas regions
in southeastern Alberta and southwestern Saskatchewan where 144 shallow gas
wells and six deep oil wells were drilled.
    In the central Alberta area, ARC continued to expand on the significant
inventory of Natural Gas from Coal development with the drilling of 17 more
wells. The central area also experienced deeper prospect success with oil and
gas focused development of 11 new wells in Garrington, Med River, Delburne and
Smiley.
    The Pembina area development included 28 successful Cardium oil wells in
the North Pembina Cardium Unit, Berrymoor, Lindale, MIPA and Buck Creek.
    At Redwater, ARC drilled eight successful oil wells on small highs
identified by a 3D seismic program that had been acquired specifically to
pinpoint the location of a CO(2) enhanced oil recovery pilot project. ARC also
enjoyed continued success with the ongoing Leduc well reactivation program and
a four well Viking drilling program that included ARC's first ever Viking
Horizontal well.
    ARC experienced continued drilling success in southeast Saskatchewan with
20 new oil wells, primarily horizontal light oil producers.
    The highlights of activity within the non-operated portfolio included a
successful 60 well infill oil drilling program within the CO(2) flooded
Weyburn unit and a successful 10 well infill drilling program within the
adjacent CO(2) flooded Midale Unit, both in southeastern Saskatchewan.
    Excluding changes in future development capital ARC's F&D costs were
$18.57 per boe proved plus probable and $19.66 per boe total proved. Excluding
the extraordinary $78 million spent at crown land sales ARC's F&D numbers are
reduced to $14.94 per boe proved plus probable and $15.82 per boe total
proved.

    ACQUISITIONS AND DISPOSITIONS

    ARC was not very active on the acquisition front during 2007 spending
only $42.5 million, (net of minor dispositions), to purchase 1.7 mmboe of
proved plus probable reserves. The majority of this was spent on the purchase
of light oil producing properties in southeast Saskatchewan near existing
properties. The remaining spending was focused on the purchase of additional
developed and undeveloped acreage within the Dawson and Ante Creek assets.
    As part of its active asset management program, ARC disposed of a few
minor properties that no longer met the long-term needs of the Trust. The
properties were sold to consolidate ARC's asset base, reduce future
abandonment obligations, decrease corporate operating costs and exit areas
with limited future development opportunities.

    FINDING DEVELOPMENT AND ACQUISITION COSTS ("FD&A")

    Incorporating the net acquisitions during the year, ARC's proved plus
probable FD&A costs excluding FDC were $19.00 per boe while proved FD&A costs
were $20.37 per boe. In 2007 ARC again focused a large portion of the budget
towards building a long-term inventory of future opportunities. The
$78 million spent on crown land in 2007 is 50 per cent higher than the
combined land spending over the previous 11 years that the Trust has been in
existence. The following table outlines the resulting impact on FD&A due to
these expenditures

    
    FD&A Costs - Impacts due to growth oriented spending
    -------------------------------------------------------------------------
                                            Crown      Undeveloped
                                Base        Land           Land
                                FD&A      Purchases    Acquisitions    Total
    -------------------------------------------------------------------------
    Expenditures ($Millions)  $ 352.7      $  77.5      $   9.4      $ 439.6
    -------------------------------------------------------------------------
    Total Proved ($/boe)      $ 16.34      $  3.59      $  0.44      $ 20.37
    -------------------------------------------------------------------------
    Proved Plus Probable
     ($/boe)                  $ 15.24      $  3.35      $  0.41      $ 19.00
    -------------------------------------------------------------------------


    FUTURE DEVELOPMENT CAPITAL ("FDC")

    NI 51-101 requires that FD&A costs be calculated including changes in FDC.
Changes in forecast FDC occur annually as a result of development activities,
acquisition and disposition activities and capital cost estimates that reflect
the independent evaluator's best estimate of what it will cost to bring the
proved undeveloped and probable reserves on production. The current level of
activity has resulted in relatively flat capital costs throughout the industry
that are now reflected in the estimates of future development costs effective
December 31, 2007.


    FD&A Costs - Company Interest Reserves(2)
                                                                      Proved
                                                                        plus
                                                            Proved  Probable
    -------------------------------------------------------------------------

    FD&A Costs Excluding Future Development Capital
    -----------------------------------------------
    Exploration and Development Capital Expenditures
     - $thousands                                         $397,163  $397,163
    Exploration and Development Reserve Additions
     Including Revisions - mboe                             20,202    21,393
    Finding and Development Cost - $/boe                    $19.66    $18.57
    Three Year Average F&D Cost - $/boe                     $20.14    $19.35

    Net Acquisition Capital - $thousands                   $42,454   $42,454
    Net Acquisition Reserve Additions - mboe                 1,381     1,748
    Net Acquisition Cost - $/boe                            $30.74    $24.29
    Three Year Average Net Acquisition Cost - $/boe         $16.70    $13.90

    Total Capital Expenditures including Net Acquisitions
     - $thousands                                         $439,616  $439,616
    Reserve Additions including Net Acquisitions - mboe     21,583    23,141
    Finding Development and Acquisition Cost - $/boe        $20.37    $19.00
    Three Year Average FD&A Cost - $/boe                    $18.51    $16.57

    FD&A Costs  Including Future Development Capital
    ------------------------------------------------
    Exploration and Development Capital Expenditures
     - $thousands                                         $397,163  $397,163
    Exploration and Development Change in FDC
     - $thousands                                          ($3,000)  $21,000
    Exploration and Development Capital Including Change
     in FDC - $thousands                                  $394,163  $418,163
    Exploration and Development Reserve Additions
     Including Revisions - mboe                             20,202    21,393
    Finding and Development Cost - $/boe                    $19.51    $19.55
    Three Year Average F&D Cost - $/boe                     $21.91    $22.92

    Net Acquisition Capital - $thousands                   $42,454   $42,454
    Net Acquisition FDC - $thousands                        $3,000    $3,000
    Net Acquisition Capital Including FDC - $thousands     $45,454   $45,454
    Net Acquisition Reserve Additions - mboe                 1,381     1,748
    Net Acquisition Cost - $/boe                            $32.91    $26.01
    Three Year Average Net Acquisition Cost - $/boe         $18.52    $15.61

    Total Capital Expenditures including Net Acquisitions
     - $thousands                                         $439,616  $439,616
    Total Change in FDC - $thousands                             -   $24,000
    Total Capital Including Change in FDC - $thousands    $439,616  $463,616
    Reserve Additions including Net Acquisitions - mboe     21,583    23,141
    Finding Development and Acquisition Cost Including
     FDC - $/boe                                            $20.37    $20.03
    Three Year Average FD&A Cost Including FDC - $/boe      $20.30    $19.19
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Note: The aggregate of the exploration and development costs incurred in
    the most recent financial year and the change during that year in
    estimated future development costs generally will not reflect total
    finding and development costs related to reserves additions for
    that year.

    --------------------------------
    (2) In all cases, the F&D, or FD&A number is calculated by dividing the
        identified capital expenditures by the applicable reserves additions.
        BOEs may be misleading, particularly if used in isolation. In
        accordance with NI 51-101, a BOE conversion ratio for natural gas of
        6 Mcf: 1 bbl has been used which is based on an energy equivalency
        conversion method primarily applicable at the burner tip and does not
        represent a value equivalency at the wellhead.

    -------------------------------------------------------------------------
    Historic Company Interest Proved FD&A Costs
    -------------------------------------------------------------------------

                        2007    2006    2005    2004    2003    2002    2001
    -------------------------------------------------------------------------

    Annual FD&A
     excluding FDC    $20.37  $24.51  $15.60  $16.53  $10.78   $8.87  $11.35
    Three year
     average FD&A
     excluding FDC    $18.51  $17.77  $13.30  $11.05  $10.69   $9.07   $8.06
    -------------------------------------------------------------------------

    Annual FD&A
     including FDC    $20.37  $27.53  $17.64  $20.46  $12.66  $10.03  $11.93
    Three year
     average FD&A
     including FDC    $20.30  $20.31  $15.45  $13.02  $11.96  $10.16   $9.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Historic Company Interest Proved Plus Probable FD&A Costs
    -------------------------------------------------------------------------

                        2007    2006    2005    2004    2003    2002    2001
    -------------------------------------------------------------------------

    Annual FD&A
     excluding FDC    $19.00  $22.41  $13.64  $13.76   $8.50   $9.27   $9.75
    Three Year
     Average FD&A
     excluding FDC    $16.57  $15.59  $11.00   $9.30   $9.07   $8.21   $6.94
    -------------------------------------------------------------------------
    Annual FD&A
     including FDC    $20.03  $27.20  $16.09  $19.14  $10.54  $10.79  $10.41
    Three Year
     Average FD&A
     including FDC    $19.19  $18.99  $13.50  $11.65  $10.52   $9.46   $8.04
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    RESERVES RECONCILIATION
    Gross Interest

                                  Light and
                                     Medium      Heavy     Total
                                  Crude Oil  Crude Oil Crude Oil        NGLs
                                      (mbbl)     (mbbl)    (mbbl)      (mbbl)
    -------------------------------------------------------------------------
    PROVED PRODUCING
    Opening Balance                  99,418      2,503    101,921      9,627
      Exploration Discoveries             0          0          0          0
      Drilling Extensions               651         15        666         82
      Improved Recovery               1,770         30      1,800        184
      Infill Drilling                 2,308          0      2,308        307
      Technical Revisions             2,299        (33)     2,266        433
      Acquisitions                      898          0        898         89
      Dispositions                     (162)         0       (162)       (24)
      Economic Factors                1,162         49      1,211         32
      Production                     (9,964)      (339)   (10,303)    (1,450)
    Closing Balance                  98,381      2,225    100,605      9,280
    -------------------------------------------------------------------------
    TOTAL PROVED
    Opening Balance                 112,647      2,517    115,164     11,768
      Exploration Discoveries             0          0          0          5
      Drilling Extensions               370        129        499        112
      Improved Recovery               1,896         16      1,912         56
      Infill Drilling                 2,298          0      2,298        322
      Technical Revisions             1,473        (19)     1,454        339
      Acquisitions                    1,002          0      1,002         96
      Dispositions                     (162)         0       (162)       (24)
      Economic Factors                1,126         49      1,175         25
      Production                     (9,964)      (339)   (10,303)    (1,450)
    Closing Balance                 110,686      2,353    113,038     11,249
    -------------------------------------------------------------------------
    PROBABLE
    Opening Balance                  30,936        844     31,780      3,002
      Exploration Discoveries             0          0          0          1
      Drilling Extensions               388         92        480         33
      Improved Recovery                 413        (16)       397         13
      Infill Drilling                   510          0        510         43
      Technical Revisions            (2,373)      (141)    (2,514)      (120)
      Acquisitions                      243          0        243         14
      Dispositions                      (23)         0        (23)        (5)
      Economic Factors                 (396)         2       (394)       (12)
      Production                          0          0          0          0
    Closing Balance                  29,698        782     30,479      2,969
    -------------------------------------------------------------------------
    PROVED PLUS PROBABLE
    Opening Balance                 143,583      3,361    146,944     14,770
      Exploration Discoveries             0          0          0          7
      Drilling Extensions               758        221        979        145
      Improved Recovery               2,309          0      2,309         69
      Infill Drilling                 2,808          0      2,808        365
      Technical Revisions              (900)      (160)    (1,059)       219
      Acquisitions                    1,245          0      1,245        111
      Dispositions                     (185)         0       (185)       (30)
      Economic Factors                  730         51        781         13
      Production                     (9,964)      (339)   (10,303)    (1,450)
    Closing Balance                 140,384      3,134    143,518     14,218
    -------------------------------------------------------------------------

                              Conventional     Natural     Total         Oil
                                   Natural    Gas from   Natural  Equivalent
                                       Gas        Coal       Gas        2007
                                      (bcf)       (bcf)     (bcf)      (mboe)
    -------------------------------------------------------------------------
    PROVED PRODUCING
    Opening Balance                   437.9        3.7      441.6    185,146
      Exploration Discoveries           0.0        0.0        0.0        0.0
      Drilling Extensions               6.2        2.7        8.8      2,220
      Improved Recovery                 3.3        0.9        4.2      2,682
      Infill Drilling                  29.2        0.0       29.2      7,480
      Technical Revisions              17.3       (0.3)      17.0      5,534
      Acquisitions                      2.4        0.3        2.6      1,426
      Dispositions                     (0.4)       0.0       (0.4)      (245)
      Economic Factors                 (0.8)       0.0       (0.8)     1,110
      Production                      (62.6)      (0.8)     (63.4)   (22,312)
    Closing Balance                   432.6        6.4      438.9    183,042
    -------------------------------------------------------------------------
    TOTAL PROVED
    Opening Balance                   574.2        7.4      581.6    223,869
      Exploration Discoveries           0.9        0.0        0.9        156
      Drilling Extensions              10.6        4.6       15.2      3,142
      Improved Recovery                 1.4        0.3        1.7      2,254
      Infill Drilling                  22.8        0.0       22.8      6,421
      Technical Revisions              29.8       (0.6)      29.2      6,665
      Acquisitions                      2.5        0.5        3.0      1,598
      Dispositions                     (0.4)       0.0       (0.4)      (245)
      Economic Factors                 (0.9)       0.0       (0.9)     1,043
      Production                      (62.6)      (0.8)     (63.4)   (22,312)
    Closing Balance                   578.3       11.5      589.8    222,592
    -------------------------------------------------------------------------
    PROBABLE
    Opening Balance                   142.3        5.3      147.6     59,378
      Exploration Discoveries           0.2        0.0        0.2         31
      Drilling Extensions               4.4        1.3        5.7      1,465
      Improved Recovery                 0.3        0.0        0.4        468
      Infill Drilling                   7.9        0.0        7.9      1,874
      Technical Revisions               2.9        0.1        3.0     (2,128)
      Acquisitions                      0.4        0.4        0.9        401
      Dispositions                     (0.1)       0.0       (0.1)       (41)
      Economic Factors                 (0.5)       0.0       (0.5)      (490)
      Production                        0.0        0.0        0.0        0.0
    Closing Balance                   157.8        7.2      165.1     60,958
    -------------------------------------------------------------------------
    PROVED PLUS PROBABLE
    Opening Balance                   716.5       12.7      729.2    283,248
      Exploration Discoveries           1.1        0.0        1.1        187
      Drilling Extensions              15.0        5.9       20.9      4,607
      Improved Recovery                 1.7        0.4        2.1      2,722
      Infill Drilling                  30.7        0.0       30.7      8,294
      Technical Revisions              32.7       (0.5)      32.3      4,537
      Acquisitions                      2.9        1.0        3.9      1,999
      Dispositions                     (0.4)       0.0       (0.4)      (285)
      Economic Factors                 (1.5)       0.0       (1.4)       553
      Production                      (62.6)      (0.8)     (63.4)   (22,312)
    Closing Balance                   736.2       18.7      754.9    283,550
    -------------------------------------------------------------------------



    FD&A Costs - Gross Reserves
                                                                      Proved
                                                                        plus
                                                            Proved  Probable
    -------------------------------------------------------------------------
    NI 51-101 Calculation Including Future
     Development Capital
    --------------------------------------
    Capital Expenditures excluding Net Acquisitions
     - $thousands                                         $397,163  $397,163
    Net Change in FDC excluding Net Acquisitions
     - $thousands                                          ($3,000)  $21,000
    Total Capital including FDC - $thousands              $394,163  $418,163
    Reserve additions excluding Net Acquisitions - mboe     19,869    21,133
    Finding and Development Cost - $/boe                    $19.84    $19.79
    Three Year Average F&D Cost - $/boe                     $23.49    $24.55

    Capital Expenditures including net acquisitions
     - $thousands                                         $439,616  $439,616
    Net Change in FDC including net acquisitions
     - $thousands                                              $ -   $24,000
    Total Capital - $thousands                            $439,616  $463,616
    Reserve additions including net acquisitions - mboe     21,223    22,847
    Finding Development and Acquisition Cost - $/boe        $20.71    $20.29
    Three Year Average FD&A Cost - $/boe                    $20.57    $19.43
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Historic Gross Proved FD&A Costs
    -------------------------------------------------------------------------

                                2007    2006    2005    2004    2003    2002
    -------------------------------------------------------------------------
    Annual FD&A including
     FDC                      $20.71  $28.05  $17.81  $21.27  $12.95  $10.97
    Three year average FD&A
     including FDC            $20.57  $20.63  $15.74  $13.54     n/a     n/a
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Historic Gross Proved Plus Probable FD&A Costs
    -------------------------------------------------------------------------

                                2007    2006    2005    2004    2003    2002
    -------------------------------------------------------------------------
    Annual FD&A including
     FDC                      $20.29  $27.79  $16.24  $19.74  $10.74  $12.06
    Three Year Average FD&A
     including FDC            $19.43  $19.28  $13.73  $12.09     n/a     n/a
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    ARC Energy Trust is one of Canada's largest conventional oil and gas
royalty trusts with an enterprise value of approximately $5.7 billion. The
Trust expects full year 2008 oil and gas production to average approximately
63,000 barrels of oil equivalent per day from six core areas in western
Canada. ARC Energy Trust trades on the TSX under the symbol AET.UN and its
exchangeable shares trade under the symbol ARX.

    ADVISORY - In the interests of providing ARC unitholders and potential
investors with information regarding ARC, including management's assessment of
ARC's future plans and operations, certain information contained in this
document are forward-looking statements within the meaning of the "safe
harbour" provisions of the United States Private Securities Litigation Reform
Act of 1995 and the Ontario Securities Commission. Forward-looking statements
in this document include, but are not limited to, ARC's internal projections,
expectations or beliefs concerning future operating results, and various
components thereof; the production and growth potential of its various assets,
estimated total production and production growth for 2008 and beyond; the
sources, deployment and allocation of expected capital in 2008; and the
success of future development drilling prospects. Readers are cautioned not to
place undue reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which they are based
will occur. By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions, forecasts,
projections and other forward-looking statements will not occur, which may
cause ARC's actual performance and financial results in future periods to
differ materially from any estimates or projections of future performance or
results expressed or implied by such forward-looking statements.

    ARC RE

SOURCES LTD. John P. Dielwart, President and Chief Executive Officer

For further information:

For further information: about ARC Energy Trust, please visit our
website www.arcenergytrust.com or contact: Investor Relations, E-mail:
ir@arcresources.com, Telephone: (403) 503-8600, Fax: (403) 509-6417, Toll Free
1-888-272-4900, Suite 2100, 440 - 2nd Avenue S.W., Calgary, AB, T2P 5E9


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