Production averaged 73,954 boe per day for the full year, but a better representation of our growth is the  84,686 boe per day achieved in the fourth quarter of 2010. This represents a 35 per cent increase over the  62,520 boe per day produced in the fourth quarter of 2009. The gains in production derive from both our  development activities and from  our strategic acquisitions. The highlight of the year was the safe start-up  of our first 60 mmcf per day gas plant at our Dawson field in northeast British Columbia. This plant has  proven to be very reliable, with production consistently above 60 mmcf per day. A second 60 mmcf per  day plant is currently under construction with start-up planned for the second quarter of 2011. Another  material highlight was the successful acquisition and integration of Storm, which closed in August. This  acquisition significantly expanded our presence in the Montney gas play as Storm’s primary asset was  the Parkland gas field, located just 10 kilometers from our Dawson operations. An important aspect of the  Parkland field is that it is  liquids rich, which substantially enhances revenue in the prevailing weak natural  gas price environment. As we move into new areas we are constructing large facilities that require longer cycle times.  These projects involve construction of infrastructure such as gas plants and expanded gathering  facilities. For example, we are currently placing orders for equipment for an Ante Creek gas plant that  is due to start-up in early 2012. We are also planning for new emerging areas such as Parkland, West  Montney and Attachie for production in future years.  ARC has an extensive array of value creating opportunities within its asset base and we are planning  to execute a $625 million capital program in 2011. We are directing $224 million to our Montney  development in northeast British Columbia as a significant portion of ARC’s production growth is  targeted from that area. When we purchased Dawson in 2003, the field was producing approximately  20 mmcf per day – we estimate that by the second quarter of 2011, we will be producing 165 mmcf per day  from Dawson. The Montney gas area will keep us busy over the next three to five years as we plan to  build at least two more gas plants, most likely in 2013 and 2014. In 2010, we purchased an additional 90  contiguous sections of land in northeast British Columbia in an area called Attachie, which is northwest of  our Dawson field. This is a prospective land base and we plan to drill five wells during 2011 in Attachie to  assess its potential for commercial production. ARC purchased additional lands in Attachie early in 2011,  giving us a total of 101 sections. ARC’ ability to execute successful capital programs and provide consistently strong returns to our  investors would not be possible without a team of highly skilled employees in every aspect of our  business. ARC has used a counter-cyclical approach in hiring practices – when others in our industry  reduced hiring because of a slo wer economy, we ramped up our hiring program and took advantage of  the opportunity to add some highly-skilled talent to our existing complement of employees. We are just as  disciplined in our hiring practices as we are with the development of our assets. Our focus in 2010 was  to attract people to ARC who have the expertise and vision to develop the opportunities in our new areas.  We provide our people with a dynamic corporate culture, where each person’s contribution to the success  of our company is valued. Providing our employees the opportunity to develop their skills through  education grants and formal training and development programs is a priority at ARC. As our company  grows in numbers, we encourage our employees to look after each other from a safety perspective. All the  activities undertaken and the results achieved can only be considered successful when they are executed  safely and in an environmentally responsible manner. Our collective goal is always zero accidents and  our health and safety policies and programs strive toward that objective. We continue to communicate  our environmental strategies to our stakeholders and published a new Corporate Responsibility report  (available on our website at www.arcresources.com) that details our goals, achievements and activities  pertaining to environment, health and safety and community investment. We have grown from an enterprise value of $200 million  in 1996 to an entity today and one of canada’s 60 largest, publicly traded  corpor ations. $8 Billion 10 ARC ResouRCes AnnuAl  report 10