This Annual Report describes certain informa tion set forth in  our news release dated February 10, 2011:  ARC Resources  Ltd. 2010 Year-end Reserves Increase by 29 Per Cent and  readers should refer to that news release, which news release  other than (i) the discussion in such release under the heading  “Montney Economic Contingent Resource Evalua tion”; and (ii)  the discussion in such release under the headings  “Headings”, “Reser ves and Resources Overview” and  “Informa tion Regarding Disc losure on Oil and Gas Reser ves, Resources and Other Opera tional Information” in respect of  “Economic Contingent Resource Evaluation”, “Discovered Gas Initially in Place”, “DGIIP”, “Economic Contingent  Resource”, “Contingent  Resource”, “resources”  and “possible reser ves”, is hereby incorpora ted by reference. This news release can be found a SEDAR a www .SEDAR.com. All amounts in this Annual Report are stated in Canadian  dollars unless otherwise specified.  Where a pplicable,  natural  gas has been converted to barrels of oil equivalent (“BOE”)  based on 6 mcf:1 boe. The boe rate is based on an energy  equivalent conversion method primarily a pplicable a t the burner  tip and does not represent a value equivalent a t the wellhead.  Use of boe in isolation may be misleading. In accordance with  Canadian practice, production volumes and revenues are  reported on a compan gross basis, before deduction of Crown  and other royalties, unless otherwise stated. Unless otherwise  specified,  all reserves volumes in this Annual Report (and all  informa tion derived therefrom) are based on “company interest  reserves” using forecast prices and costs. “Company interest  reserves” consist of “compan y gross reserves” (as defined in  National Instrument 51-101 adopted by the Canadian securities  regulators (“NI 51-101”) plus ARC’s royalty interests in reserves.  “Company interest reserves” are not a measure defined in NI 51-101 and does not have a standardized meaning under NI 51-101. Accordingly, our company interest reserves may not be  comparable to reserves presented or disclosed by other issuers.  Our oil and gas reserves statement for the year ended December  31, 2010, which will include complete disclosure of our oil and  gas reserves and other oil and gas informa tion in accordance with  NI 51-101, will be contained within our  Annual Information Form  that will be available on SEDAR at www .sedar .com. In relation  to the disclosure of estimates for an individual properties, such  estimates for individual properties may not reflect the same  confidence level as estimates of reserves for all properties,  due to the effects of aggregation. The oil and na tural gas reserves contained in this press release  have generally been prepared in accordance with Canadian  disc losure standards, which are not comparable in all respects of  United Sta tes or other foreign disclosure standards. For example,  the United Sta tes Securities and Exchange Commission (the  “SEC”) generally permits oil and gas issuers, in their filings with  the SEC, to disc lose only proved reserves (as defined in SEC  rules). Canadian securities laws require oil and gas issuers,  in their filings with Canadian securities regula tors, to disclose not  only proved reser ves (which are defined differently from the SEC  rules) but also probable and possible reser ves, each as defined  in NI 51-101 and allo the disclosure of possible reserves.  Accordingly, proved reserves disclosed in this  Annual Report may  not be comparable to U.S. standards, and in this Annual Report,  ARC has disclosed reserves designated as  “probable reserves”  and  “proved plus probable reserves”. Probable reserves are  higher risk and are generally believed to be less likely to be  accura tely estimated or recovered than proved reserves. The SEC’ guidelines strictly prohibit reserves in these categories  from being included in filings with the SEC that are required to be prepared in accordance with U.S. disclosure requirements. In addition, under Canadian disclosure requirements and industry  practice, reserves and production are reported using gross  (or, as noted above, “compan y interest”) volumes, which are  volumes prior to deduction of royalty and similar payments. The practice in the United States is to report reserves and  production using net volumes, after deduction of applicable  royalties and similar payments. Moreover, ARC has determined  and disclosed estimated future net revenue from its proved and  probable reserves using forecast prices and costs, whereas the  SEC generally requires that prices and costs be averaged for the 12 months as of the date of the reserve report. As a consequence  of the foregoing, ARC’s reserve estimates and production  volumes in this Annual Report may not be comparable to  those made by companies utilizing United States reporting and  disclosure standards. Additionally, the SEC prohibits disclosure of  oil and gas resources, including contingent resources, whereas  Canadian issuers may disclose oil and gas resources. Resources  are different than, and should not be construed as, reserves. This Annual Report contains certain forward-looking information  and statements within the meaning of applicable securities laws.  The use of any of the words “expect”, “anticipate”, “continue”,  “estimate”, “objective”, “ongoing”, “may”, “will”, “project”,  “should”, “believe”, “plans”, “intends”, “strategy” and similar  expressions are intended to identify forward-looking information  or statements. In particular, but without limiting the foregoing,  this Annual Report contains forward-looking information  and statements pertaining to the following: the volumes and  estimated value of ARC’s oil and gas reserves; the volumes of resources; the life of ARC’s reserves; the volume and product  mix of ARC’s oil and gas production; future oil and natural gas prices and ARC’s commodity risk management programs;  future results from operations and operating metrics; and future development, exploration, acquisition and development activities (including drilling plans) and related production expectations.  The forward-looking information and statements contained in this Annual Report reflect several material factors and expectations  and assumptions of ARC including, without limitation: that ARC  will continue to conduct its operations in a manner consistent  with past operations; results from drilling and development  activities consistent with past results; the continued and timely  development of infrastructure in areas of new production; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances,  the implementation of proposed) tax, royalty and regulatory  regimes; the accuracy of the estimates of ARC’s reserve volumes;  certain commodity price and other cost assumptions; and the  continued availability of adequate debt and equity financing and  cash flow to fund its plans expenditures. There are a number  of assumptions associated with the development of the lands  at Dawson, West Montney and Parkland, including the quality  of the Montney reservoir, continued performance from existing  wells, future drilling programs and performance from new  wells, the growth of infrastructure, well density per section,  recovery factors and development necessarily involves known  and unknown risks and uncertainties, including those risks  identified in this Annual Report. ARC believes the material factors,  expectations and assumptions reflected in the forward-looking  information and statements are reasonable but no assurance  can be given that these factors, expectations and assumptions  will prove to be correct. ARC believes the material factors,  expectations and assumptions reflected in the forward-looking  information and statements are reasonable but no assurance can  be given that these factors, expectations and assumptions will  prove to be correct. The forward-looking information and statements included in  this Annual Report are not guarantees of future performance  and should not be unduly relied upon. Such information and  statements involve known and unknown risks, uncertainties  and other factors that may cause actual results or events to  differ materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; the early stage of development of some  areas in Dawson, west Montney and Parkland; the potential  for variation in the quality of the Montney formation, changes in the demand for or supply of ARC’ products; unanticipated  operating results or production declines; unanticipated results  from ARC’s exploration and development activities; changes  in tax or environmental laws, royalty rates or other regulatory  matters; changes in development plans of ARC or by third party  operators of ARC’s properties, increased debt levels or debt  service requirements; inaccurate estimation of ARC’s oil and gas  reserve volumes; limited, unfavourable or a lack of access to  capital markets; increased costs; a lack of adequate insurance  coverage; the impact of competitors; and certain other risks  detailed from time to time in ARC’s public disclosure documents  (including, without limitation, those risks identified in this Annual  Report and in ARC’s Annual Information Form). The forward-looking information and statements contained  in this Annual Report speak only as of the date of this Annual  Report, and none of ARC or its subsidiaries assumes any  obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws. “On January 1, 2011 ARC Energy Trust (the “Trust”) completed  its conversion to a dividend paying corporation. Prior to the  conversion of the Trust to a corporation, distributions were  paid to unitholders. Historical references in this Annual Report  to “unitholders”, “distributions”, “trust units”, and “per  unit” have been replaced with “shareholders”, “dividends”,  “common shares” and “per share”, respectively, except where  specifically noted in this Annual Report.” This Annual Report includes certain information which is set  forth in the audited financial statements of the Corporation for  the year ended December 31, 2010, including the report of our  auditor’s thereon and the notes thereto, and readers should refer  to those financial statements, which are hereby incorporated by  reference. These financial statements can be found at SEDAR  at www.sedar.com and can be obtained from the Corporation  upon request. INFORMATION REGARDING FINANCIAL INFORMATION FORWARD-LOOKING INFORMATION AND STATEMENTS NOTICE TO U.S. READERS INFORMATION REGARDING DISCLOSURE ON OIL AND GAS  RESERVES, AND OPERATIONAL INFORMATION financial  highlights Message to  Shareholders review of  operations reserves corporate responsibility corporate governance corporate  information