ARC Energy Trust announces two new gas discoveries and a large land acquisition in the Dawson area

    CALGARY, Jan. 8 /CNW/ - (AET.UN and ARX - TSX) ARC Energy Trust (the
"Trust" or "ARC") announced today two new gas discoveries and a significant
increase in its land holdings in the Dawson area of British Columbia.
Concurrently, ARC also announced a $40 million increase to its 2008 capital
budget. Key highlights include:

    -   The West Dawson 4-12-79-16W6 discovery well encountered over 75
        meters of greater than three per cent porosity gas bearing rock in
        the Montney formation and tested multiple intervals of commercial
        quantities of gas. The new well provides a significant western
        extension to ARC's Montney gas exposure at Dawson.
    -   The Sunrise 9-13-78-18W6 discovery well encountered 150 meters of
        greater than three per cent porosity gas bearing rock in the Montney
        formation. Although untested at this time, ARC believes the well
        confirms the presence of a large gas resource associated with our
        Sunrise lands.
    -   Since August 2006, ARC has spent $100 million to acquire 44,000 net
        acres (68 net sections) of land in the Dawson area, bringing ARC's
        total land holdings in the area up to approximately 90,000 net acres
        (138 net sections). Included in this number are 57,000 net acres
        (87 net sections) of undeveloped acreage that ARC believes to be
        highly prospective for Montney gas.
    -   A $40 million increase to the 2008 capital budget targeted at
        delineating and developing the new fields. The increased budget is
        expected to lead to production in future years, but not in 2008.

    John Dielwart, ARC's President and CEO, said, "This significant expansion
of our land holdings in the Dawson area will ensure that ARC remains in the
forefront of development of this exciting resource play. Delineation and
development of Sunrise and West Dawson and the evaluation of West Tupper will
be a significant focus for ARC in 2008. We have developed considerable
expertise with the Montney zone and have spearheaded advances in drilling and
completion technology that have reduced the cost of wells and improved the
flow rates. Our best horizontal wells have tested in excess of 10 mmcf per
day. These new lands provide the building blocks to add significant reserves
and production in the future."
    ARC entered the Dawson area through its acquisition of Star Oil and Gas
in April 2003 that gave it operatorship of the Dawson Montney Gas field. Since
then, ARC has methodically developed the area and increased its land holdings.
December 2007 saw a new milestone in this field, as production at Dawson
reached a record 44 mmcf per day following the opening of the Spectra West Doe
Gas Plant on December 12, 2007. This is an 83 per cent increase over the 24
mmcf per day produced in January 2007. ARC expects to be able to maintain
production at current levels through the continued development of the main
Dawson field.
    Over the past 18 months ARC has significantly expanded its land holdings
in the greater Dawson area through the acquisition of strategic acreage. A
total of 44,000 net acres (68 net sections) of both developed and undeveloped
acreage has been purchased at Dawson and West Dawson from other industry
participants and at crown land sales. Of this total, 23,000 acres, primarily
at Sunrise and West Tupper, have been purchased in the last four months.
    During 2007, ARC drilled three wells on the West Dawson lands. Both the
West Dawson 4-12-79-16W6 and the Dawson 6-10-79-15W6 wells encountered over 75
meters of pay in the Montney Formation, using a three per cent porosity
cut-off. At West Dawson, ARC has accumulated a 14 section land block that is
contiguous with ARC's main Dawson lands and is close to existing
infrastructure. During 2008 ARC expects to drill two horizontal wells on these
    During the last four months of 2007, ARC purchased 15 sections of land
(approximately 10,000 net acres) and drilled the Sunrise 9-13 discovery well.
To date the well has not been completed but logs indicate a thick, gas bearing
Montney interval. At Sunrise, the Montney porous section is deeper and
significantly thicker than at the Dawson field, and has better porosity than
anticipated. ARC has identified three separate intervals within the Montney
that we plan to test. With the additional porous section and the deeper depth,
ARC expects greater gas-in-place on a per section basis than is the case at
Dawson. ARC plans on an extensive test program for the discovery well, the
execution of a 3D seismic program and the drilling of additional wells in
    ARC holds a one hundred per cent working interest in the Sunrise and West
Dawson lands. As of January 7, 2008, ARC estimates that these blocks contain a
total of greater than one trillion cubic feet of Discovered Gas Resource.(1)
Testing and drilling of additional wells will be required to confirm the
economic viability of this resource and construction of additional
infrastructure will be required to bring this gas on production.
    Not included in our Discovered Gas Resource estimate are an additional
13,000 acres of 100 per cent interest land in the West Tupper region just west
of the Swan Lake gas field that were also purchased in the last four months of
2007. These new lands are within an area that is highly prospective for the
Montney, which has recently been the focus of considerable industry activity
and as such, ARC would expect these lands to add gas resources in the future.
The first exploratory well will be drilled on this new land block in 2008.

    Note: Missing map. To access map, please go to

    2008 Budget Increased:

    To accelerate the exploitation of the new lands and discoveries, ARC has
increased its 2008 capital budget by $40 million, with all of the increase
earmarked for the Montney resource play. ARC plans to shoot 3D seismic and
drill multiple vertical wells and horizontal wells on the newly acquired lands
during 2008. This brings the total capital budgeted for the greater Dawson
area to approximately $85 million for 2008.
    "The $40 million increase reflects our commitment to expediting the
development of these new lands that are in the heart of a major resource play
development," stated Mr. Dielwart. "With our experience at Dawson we've
dramatically improved our completion techniques and plan to apply these
learnings to the new lands. Recent offsetting land sales in the area set new
records for purchases in British Columbia that highlight industry expectations
for this area. While ultimate pool size is still unknown, the potential exists
to more than double production in this core area."

    Revised Budget Information:

    The budgeted capital expenditures for 2008, by type are:

                                            2006        2007        2008
    ($ million)                            (Actual)    (Estimate)  (Budget)
    Development drilling                    225         217         225
    Facilities & pipelines                  36          27          26
    Maintenance                             8           19          23
    Optimization                            11          8           17
    Land                                    32          75          15
    Seismic                                 9           6           14
    Other                                   12          10          13
    Natural gas from coal (NGC)             14          8           18
    Enhanced Oil Recovery (strategic)       -           4           13
    Exploration                             17          16          31
    Total                                   364         390         395

                                            2006        2007        2008
    Operated Wells Drilled (gross)         (Actual)    (Estimate)  (Budget)
    Natural gas wells                       222         179         210
    Oil wells                               72          97          100
    Total                                   294         276         310

    Capital Budget by Area:
                                            2006        2007        2008
    ($ million)                            (Actual)    (Estimate)  (Budget)
    Northern Alberta and British Columbia   166         227         169
    Drayton Valley                          30          32          41
    Central Alberta                         44          23          35
    Southeast Alberta & Southwest
     Saskatchewan                           51          35          34
    Southeast Saskatchewan & Manitoba       54          50          71
    Redwater                                14          13          32
    Corporate                               5           10          13
    Total                                   364         390         395

    Alberta Total                           213         205         218
    Saskatchewan and Manitoba Total         81          53          93
    British Columbia Total                  70          132         84

    Fourth Quarter Production and Other Items

    With the delayed start-up of the West Doe gas plant, ARC expects its
fourth quarter volumes to be approximately 63,800 boe per day with an exit
rate for the last week of December of approximately 65,000 boe per day. ARC
estimates that capital expenditures for 2007 will be approximately $390
million as the $40 million spent on land acquisitions in the fourth quarter
was an unbudgeted item.

    ARC is also pleased to announce that it has entered into a 13 year lease
beginning in 2010 for office space in Jamieson Place, an environmentally
conscious office building currently under construction in downtown Calgary.

    Conference Call - Wednesday, January 9, 2008

    ARC will host a conference call, Wednesday, January 9, 2008, starting at
8:30 a.m., Mountain Time (10:30 a.m. Eastern Time), to discuss the discoveries
and the increase to its 2008 budget. To participate in the conference call,
please dial (416) 644-3415 (Toronto) or (800) 733-7560 at least 10 minutes
prior to the start of the call.
    An archived recording of the call will be available from approximately
10:30 a.m. Mountain Time on January 9, 2008 until midnight January 23, 2008 by
dialing 416-640-1917 (Toronto) or 877-289-8525 and entering access code
21258951 followed by the number sign.

    This press release contains forward-looking statements as to the Trust's
internal projections, expectations or beliefs relating to future events or
future performance, including the Trust's Detailed Guidance for 2008 and the
amount and type of 2008 budgeted capital expenditures set forth herein. In
some cases, forward-looking statements can be identified by terminology such
as "may", "will", "should", "expects", "projects", "plans", "anticipates" and
similar expressions. These statements represent management's expectations or
beliefs concerning, among other things, future capital expenditures and future
exploration, development and operating results and various components thereof
or the economic performance of ARC Energy Trust ("ARC" or "the Trust"). The
projections, estimates and beliefs contained in such forward-looking
statements are based on management's assumptions relating to the production
performance of ARC's oil and gas assets, the cost and competition for services
throughout the oil and gas industry in 2008 and 2009 and the continuation of
the current regulatory and tax regime in Canada and future exploration and
development results, and necessarily involve known and unknown risks and
uncertainties, including the business risks discussed in managements
discussion and analysis and ARC's annual information form, which may cause
actual performance and financial results in future periods to differ
materially from any projections of future performance or results expressed or
implied by such forward-looking statements. Accordingly, readers are cautioned
that events or circumstances could cause results to differ materially from
those predicted. The Trust does not undertake to update any forward looking
information in this document whether as to new information, future events or
otherwise except as required by securities rules and regulations.

    ARC Energy Trust is one of Canada's largest conventional oil and gas
royalty trusts with an enterprise value of approximately $5.2 billion. The
Trust currently produces approximately 63,000 barrels of oil equivalent per
day from five core areas in western Canada. ARC Energy Trust trades on the TSX
under the symbol AET.UN.

    Note: Barrels of oil equivalent (BOE's) may be misleading, particularly
if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for
natural gas of 6 Mcf:1bbl 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.

    ARC RE

SOURCES LTD. John P. Dielwart, President and Chief Executive Officer (1) Discovered Resources are defined as the quantity of hydrocarbons that are estimated to be contained within a known accumulation. Discovered Resources are divided into economic and uneconomic portions, with the estimated future recoverable portion classified as reserves and contingent resources. There is no certainty that it will be economically viable or technically feasible to produce any portion of this Discovered Resource. However, analogous developments in the ARC Dawson field and the EnCana Swan Lake field have proved to be economic. The resource is not currently classified as reserves or contingent resources as further drilling is required to define the aerial extent of the play and further testing is required to confirm formation deliverability potential. ARC believes its current estimate of this resource, if proven to be correct, will be sufficient to justify full economic development and production assuming the current commodity price and regulatory environments prevail.

For further information:

For further information: Investor Relations, E-mail:, Telephone: (403) 503-8600, Fax: (403) 509-6417, Toll Free
1-888-272-4900; ARC Resources Ltd., 2100, 440 - 2nd Avenue S.W., Calgary, AB,
T2P 5E9,

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