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ARC Resources Ltd. Reports Fourth Quarter and Full Year 2012 Results

ARC Resources Ltd. Reports Fourth Quarter and Full Year 2012 Results 
CALGARY, Feb. 6, 2013 /CNW/ - (ARX - TSX) ARC Resources Ltd. ("ARC") is 
pleased to report its fourth quarter and full year 2012 operating and 
financial results. Fourth quarter production was a record 95,725 boe per day 
and funds from operations were $208.4 million ($0.68 per share). ARC's 2012 
Audited Consolidated Financial Statements and Notes, as well as ARC's 
Management's Discussion and Analysis ("MD&A") for years ended December 31, 
2012 and 2011, are available on ARC's website at www.arcresources.com and on 
SEDAR at www.sedar.com. 


                                     Three Months Ended  Year Ended
                                        December 31      December 31
                                       2012        2011   2012   2011

FINANCIAL                                                            

(Cdn$ millions, except per share and       
per boe amounts)                                                     

Funds from operations ((1))           208.4       226.6  719.8  844.3

  Per share ((2))                      0.68        0.79   2.42   2.95

Net income (loss)                      84.5      (49.0)  139.2  287.0

  Per share ((2))                      0.27      (0.17)   0.47   1.00

Operating income ((3))                 59.2        74.7  163.2  293.5

  Per share ((2))                      0.19        0.26   0.55   1.02

Dividends                              92.5        86.7  357.4  344.0

  Per share ((2))                      0.30        0.30   1.20   1.20

Capital expenditures                  190.2       195.0  608.0  726.0

Net debt outstanding ((4))            745.6       909.7  745.6  909.7

Shares outstanding, weighted average
diluted                               308.4       288.3  297.2  286.6

Shares outstanding, end of period     308.9       288.9  308.9  288.9

OPERATING                                                            

Production                                                           

  Crude oil (bbl/d)                  32,938      28,470 31,454 27,158

  Condensate (bbl/d)                  1,767       2,219  2,217  2,052

  Natural gas (mmcf/d)                348.2       355.3  342.9  310.6

  Natural gas liquids (bbl/d)         2,978       2,114  2,728  2,444

  Total (boe/d) ((5))                95,725      92,021 93,546 83,416

Average prices                                                       

  Crude oil ($/bbl)                   80.50       92.85  82.03  89.51

  Condensate ($/bbl)                  86.70      101.13  92.63  96.07

  Natural gas ($/mcf)                  3.32        3.43   2.62   3.83

  Natural gas liquids ($/bbl)         36.13       51.02  38.11  47.53

  Oil equivalent ($/boe)              42.49       45.58  40.50  47.15

Operating netback ($/boe)                                            

  Commodity and other sales           42.62       45.69  40.58  47.24

  Transportation costs               (1.26)      (1.14) (1.29) (1.18)

  Royalties                          (5.71)      (7.60) (5.72) (7.20)

  Operating costs                    (8.80)      (9.40) (9.40) (9.70)

  Netback before hedging              26.85       27.55  24.17  29.16

  Realized hedging gain                1.26        2.47   1.87   2.39

  Netback after hedging               28.11       30.02  26.04  31.55

TRADING STATISTICS ((6))                                             

High price                            26.00       26.74  26.25  28.67

Low price                             22.32       19.40  18.36  19.40

Close price                           24.44       25.10  24.44  25.10

Average daily volume (thousands)      1,146       1,264  1,356  1,251

(1)    Funds from operations does not have a standardized meaning under
       Canadian Generally Accepted Accounting Principles ("GAAP").  See
       "Additional GAAP Measures" section in the MD&A for the years
       ended December 31, 2012 and 2011.

(2)    Per share amounts (with the exception of dividends) are based on
       weighted average shares.

(3)    Operating income not have a standardized meaning under GAAP. 
       See "Operating Income" section in this news release.

(4)    Net debt does not have a standardized meaning under GAAP.  See
       "Additional GAAP Measures" section in the MD&A for the years
       ended December 31, 2012 and 2011.

(5)    In accordance with NI 51-101, a boe conversion ratio of 6 Mcf :
       1 bbl has been used, which is based on an energy equivalency
       conversion method primarily applicable at the burner tip.  Given
       that the value ratio based on the current price of crude oil as
       compared to natural gas is significantly different than the
       energy equivalency of the conversion ratio, utilizing the 6:1
       conversion ratio may be misleading as an indication of value.

(6)    Trading prices are stated in Canadian dollars and based on
       intra-day trading.

FINANCIAL AND OPERATIONAL HIGHLIGHTS
    --  ARC achieved record production levels of 95,725 boe per day and
        93,546 boe per day, respectively for the fourth quarter and
        full year 2012.  Fourth quarter production was up seven per
        cent relative to the third quarter of 2012 due to excellent run
        time at the Dawson gas plant following scheduled maintenance in
        the third quarter.  ARC's successful 2012 drilling program,
        commissioning of the new 30 mmcf per day Ante Creek gas plant
        in February 2012, full year of operations at ARC's Dawson
        facilities and strong well performance particularly at Pembina
        and Ante Creek contributed to the higher production in 2012.
    --  Fourth quarter and full year crude oil and liquids production
        of 37,683 barrels per day and 36,399 barrels per day,
        respectively, both increased 15 per cent relative to 2011. 
        ARC's focus has been to capitalize on the relative strength of
        crude oil prices by exploiting oil and liquids opportunities,
        which generate the highest rates of return and cash flows. 
        Strong production results from new wells at Pembina, Goodlands,
        and Tower, and expanded processing capacity at Ante Creek have
        contributed to the significant increase in crude oil,
        condensate and natural gas liquids production in 2012.
    --  ARC's 2012 year end reserves and resources evaluation reflected
        growth in reserves and reaffirmed the significant resource
        potential in the northeastern B.C. Montney region ("NE B.C.
        Montney").  See February 6, 2013 news release "ARC Resources
        Ltd. Announces Fifth Consecutive Year of Greater than 200 per
        cent Produced Reserves Replacement in 2012" for additional


    information.
  o Replaced 200 per cent of 2012 production, adding 69 mmboe of Proved 
plus probable ("2P") reserves in 2012
  o Six per cent increase in 2P reserves to 607 million boe
  o Finding and Development ("F&D") costs of $9.01 per boe and Finding, 
Development, and Acquisition ("FD&A") costs of $9.34 per boe for 2P 
reserves, excluding future development capital ("FDC")
  o Nine per cent increase in 2P crude oil and natural gas liquids 
("NGL's") reserves to 186 mmbbls
  o Recycle ratio of 2.7 times and 3.6 times for the current year and 


    three year average, respectively, for 2P reserves based on current
    and three year average F&D costs excluding FDC and ARC's 2012
    netback of $24.17 per boe
    --  Fourth quarter and full year 2012 commodity sales revenues of
        $375.4 million and $1,389.4 million, respectively, were both
        down three per cent relative to 2011 despite higher fourth
        quarter and annual 2012 production, due to lower realized
        commodity prices.  Crude oil and liquids production contributed
        approximately 71 per cent and 76 per cent of fourth quarter and
        full year sales revenue, respectively, due to the strength of
        crude prices relative to natural gas prices.  ARC's diversified
        production portfolio and an active hedging program served to
        mitigate the impact of the low natural gas price environment
        throughout 2012.
    --  Fourth quarter funds from operations were $208.4 million ($0.68
        per share), down eight per cent from the fourth quarter of
        2011. Full year funds from operations of $719.8 million ($2.42
        per share) were down 15 per cent relative to 2011. 
        Significantly higher 2012 production volumes were offset by
        lower realized crude oil and natural gas prices as well as
        current income taxes of $3.6 million and $29.9 million,
        respectively, for the fourth quarter and full year 2012.
    --  Operating income( )was $59.2 million ($0.19 per share) in the
        fourth quarter of 2012, a 21 per cent decrease from the fourth
        quarter of 2011.  Full year operating income of $163.2 million
        ($0.55 per share) was down 44 per cent relative to 2011.  Lower
        natural gas prices were the primary driver of lower operating
        income in 2012.
    --  ARC's fourth quarter and full year funds from operations
        included realized cash hedging gains of $13.8 million and $66.4
        million, respectively, on ARC's commodity, foreign currency,
        interest and power hedging contracts.  ARC's fourth quarter
        realized hedging gain was primarily attributed to gains on
        crude oil, foreign currency and power hedges while full year
        realized hedging gains were primarily attributed to gains on
        natural gas hedges. 
    --  ARC achieved excellent capital efficiencies in 2012, meeting
        production guidance and delivering annual production growth of
        12 per cent despite the reduction in the 2012 capital budget
        from $760 million to actual 2012 capital spending of $608
        million.  Fourth quarter capital expenditures, prior to net
        property and undeveloped land acquisitions, totaled $190.2
        million.  ARC drilled 38 gross operated wells in the fourth
        quarter, comprised of 36 oil wells and two natural gas wells,
        bringing full year drilling to 144 gross operated wells
        comprised of 137 oil wells, four liquids-rich gas wells and
        three natural gas wells. ARC's capital program was focused
        primarily on oil and liquids-rich opportunities at Tower, Ante
        Creek, Pembina, Goodlands and southeast Saskatchewan.
    --  In addition to the $608 million capital development program in
        2012, ARC spent $36.5 million on "tuck-in" acquisitions and
        undeveloped land in key areas ($32.4 million net of non-core
        property divestments) during 2012.  ARC's spending on
        undeveloped land and property acquisitions was focused on
        growing our presence in key areas.
    --  ARC closed 2012 with a strong balance sheet with total
        available credit facilities of $1.9 billion and debt of $787.4
        million drawn. After a $41.8 million working capital surplus,
        ARC had available credit of approximately $1.2 billion.  Net
        debt to funds from operations ratio was one times and net debt
        was approximately nine per cent of ARC's total capitalization
        at the end of 2012; both metrics are well within ARC's target
        levels.
    --  ARC declared and paid a dividend of $0.30 per share to
        shareholders for the fourth quarter of 2012 and has confirmed a
        dividend of $0.10 per share to shareholders for January 2013 to
        be paid on February 15, 2013.  ARC has conditionally declared a
        dividend of $0.10 per share, payable monthly for February,
        March and April 2013, subject to confirmation by monthly news
        release and subject to any further resolution of the Board of
        Directors.  ARC has maintained the current monthly dividend
        level of $0.10 per share for a period of 44 months, including
        payments through January 15, 2013. Since inception, ARC has
        paid dividends of $28.68 per share through January 15, 2013.
    --  ARC plans to execute an $830 million capital program, excluding
        land and property acquisitions, in 2013 with a continued focus
        on oil and liquids-rich opportunities.  ARC has started
        construction of the first 60 mmcf per day phase of the
        Parkland/Tower gas processing and liquids handling facility,
        having received all regulatory approvals in 2012.  ARC expects
        2013 full year production to average between 93,000 and 97,000
        boe per day with expected 2013 exit volumes of 100,000 boe per
        day.  ARC has a strong balance sheet and sufficient available
        credit capacity to fund the 2013 capital program.

ORGANIZATIONAL UPDATE

Effective January 1, 2013 ARC implemented the following organizational changes.

John Dielwart retired from the position of Chief Executive Officer. Mr. 
Dielwart will stay on as an advisor through to the Annual General Meeting in 
May 2013 to assist with the transition and will remain on the Board of 
Directors.

Myron Stadnyk was appointed President and Chief Executive Officer and member 
of the Board of Directors. Mr. Stadnyk has been with ARC since 1997 and has 
held the position of President and Chief Operating Officer since February 2009.

Cameron Kramer was promoted to the position of Senior Vice President and Chief 
Operating Officer. Mr. Kramer joined ARC in 2011 as Senior Vice President 
Operations.

ECONOMIC ENVIRONMENT

During 2012, West Texas Intermediate ("WTI") crude oil prices traded at a 
discount to Brent crude oil prices due primarily to pipeline bottlenecks 
between Cushing, Oklahoma and the United States Gulf Coast. The Seaway 
pipeline was reversed in 2012 and subsequently expanded in 2013, resulting in 
financial markets pricing in a narrowing future spread between WTI and Brent 
crude oil prices. The WTI crude oil price averaged US$94 per barrel during 
2012, largely unchanged relative to 2011 prices; however ARC's realized crude 
oil price was down eight per cent in 2012 due to widening Canadian crude oil 
differentials.  Volatile Canadian crude oil differentials were primarily 
attributed to increased North American oil production, refinery outages and 
upgrades, and pipeline infrastructure bottlenecks in the mid-western United 
States. The monthly average differential for Edmonton Par relative to WTI 
ranged from a discount of $20 per barrel to a premium of $4 per barrel during 
2012. The 2012 differential for Edmonton par averaged a discount of $8 per 
barrel compared to a premium of $1 per barrel in 2011. In the later part of 
2012, differentials saw a slight recovery as certain infrastructure 
bottlenecks were addressed, and rail transport volumes increased as producers 
looked for alternatives to move their product to market. Looking ahead, 
several infrastructure projects which are expected to alleviate certain 
bottlenecks, are currently proposed or under development, however due to the 
long-term nature of these projects the risk of volatile differentials remains 
a concern for 2013 and into 2014 until infrastructure issues are resolved and 
additional pipeline capacity becomes available.

Canadian natural gas prices averaged $2.40 per mcf in 2012, down 35 per cent 
from $3.67 per mcf in 2011. Lower natural gas prices were largely attributed 
to record high North American production and inventory levels. Despite 
declining Canadian production and a reduction in North American natural gas 
drilling activity in response to the low natural gas price environment, 
horizontal well technology in shale gas plays and associated gas from oil and 
liquids-rich gas development contributed to record high American production 
levels during 2012. The combination of record production and low natural gas 
demand due to mild winter weather has resulted in a significant build in 
natural gas inventories. Going forward, sustained demand growth from coal 
power plant retirements, transportation usage, industrial usage, and 
development of offshore markets is necessary in order to support a stronger 
natural gas price in the long-term.

Ongoing commodity price volatility may affect ARC's funds from operations and 
rates of return on our capital programs. As we expect continued volatility 
into 2013, we will take steps to mitigate these risks, optimize our rates of 
return, and maintain our strong financial position.

FINANCIAL REVIEW

Funds from Operations

ARC's fourth quarter funds from operations of $208.4 million ($0.68 per share) 
were down eight per cent compared to the fourth quarter of 2011 and full year 
funds from operations of $719.8 million ($2.42 per share) were down 15 per 
cent compared to 2011. Higher production during the fourth quarter and full 
year 2012 was offset by lower realized oil and natural gas prices and current 
income tax expense in 2012 (no current taxes expense in 2011).

The following table details the items contributing to the change in funds from 
operations for 2012 relative to 2011.
                                                
                   Three months ended December Twelve months ended
                                            31         December 31
                   $ millions          $/Share $ millions  $/Share

Funds from
operations - 2011
((1))                   226.6             0.79      844.3     2.95

Volume variance                                                   

  Crude oil and          40.9             0.14      153.7     0.54
  liquids

  Natural gas           (2.2)           (0.01)       46.4     0.16

Price variance                                                    

  Crude oil and        (46.5)           (0.16)     (97.9)   (0.34)
  liquids

  Natural gas           (3.6)           (0.01)    (151.0)   (0.54)

Realized gains
(losses) on risk
management
contracts                18.0             0.06      (9.4)   (0.03)

Realized losses on
risk management
contracts
recognized in
previous quarters
((2))                  (26.3)           (0.09)          -        -

Royalties                14.0             0.05       23.6     0.08

Expenses:                                                         

  Transportation        (1.4)                -      (8.0)   (0.03)

  Operating               2.1             0.01     (26.5)   (0.09)

  General and           (7.9)           (0.03)     (19.0)   (0.07)
  administrative

  Interest              (2.3)           (0.01)      (6.4)   (0.02)

  Current tax           (3.6)           (0.01)     (29.9)   (0.10)

  Realized foreign        0.6                -      (0.1)        -
  exchange gains
  (losses)

Diluted shares              -           (0.05)          -   (0.09)

Funds from
operations - 2012
((1)())                 208.4             0.68      719.8     2.42

(1)   Funds from operations is not a recognized performance measure
      under GAAP.  Refer to the section entitled "Additional GAAP
      Measures" in the MD&A.

(2)   ARC has entered into certain commodity price risk management
      contracts that pertain to production periods spanning the entire
      calendar year but that are settled at the end of the year on an
      annual average benchmark commodity price.  Throughout the year,
      ARC has applied the portion of losses associated with these
      contracts to the funds from operations calculation in the
      production period to which they relate to more appropriately
      reflect the funds from operations generated during the period
      after any effect of contracts used for economic hedging. At
      December 31, all gains and losses associated with these contracts
      have been realized, and in the fourth quarter losses previously
      applied to prior quarters are reversed.

Operating Netbacks

ARC's fourth quarter operating netback, before hedging, decreased three per 
cent to $26.85 per boe relative to the fourth quarter of 2011. ARC's full year 
2012 pre-hedging netback was $24.17 per boe, 17 per cent lower than 2011. 
ARC's fourth quarter and full year netbacks, after hedging, increased to 
$28.11 per boe and $26.04 per boe, respectively. Lower 2012 netbacks both 
before and after hedging, relative to 2011, were primarily due to lower 
realized commodity prices.

ARC's total corporate royalty rate decreased to 13.4 per cent ($5.71 per boe) 
in the fourth quarter of 2012 from 16.6 per cent ($7.60 per boe) in 2011. 
ARC's full year 2012 total corporate royalty rate decreased to 14.1 per cent 
(15.2 per cent in 2011). Lower 2012 royalty rates were due to significantly 
lower natural gas prices in 2012 and a higher number of Alberta oil wells 
qualifying for a five per cent royalty rate.

ARC's fourth quarter and full year operating costs were $8.80 per boe and 
$9.40 per boe, respectively in 2012, six per cent and three per cent lower 
than 2011 levels as a result of disciplined cost control and higher production 
in 2012.

See tables 15 and 15a in Management's Discussion and Analysis for the three 
months and year ended December 31, 2012 and 2011 for detailed components of 
netbacks by commodity for the fourth quarter and full year 2012 and 2011.

Net Income

ARC recorded net income of $84.5 million ($0.27 per share) for the fourth 
quarter of 2012 compared to a net loss of $49 million ($0.17 per share) in the 
fourth quarter of 2011. Full year 2012 net income of $139.2 million ($0.47 
per share) was down 51 per cent relative to net income of $287.0 million 
($1.00 per share) in 2011. Higher production had a positive impact on net 
income in both the fourth quarter and full year 2012, however these gains were 
eroded by lower realized natural gas and crude oil prices in 2012.

Fourth quarter 2012 net income included a $53.6 million unrealized gain on 
risk management contracts ($80.1 million unrealized loss in the fourth quarter 
of 2011). Full year net income included a $14.2 million unrealized gain on 
risk management contracts ($16.5 million unrealized loss in 2011).

Full year 2012 net income was reduced for an asset impairment charge of $53 
million ($55.3 million and $71.9 million charges, respectively, in fourth 
quarter of 2011 and full year 2011).

Current income tax expense of $3.6 million and $29.9 million in the fourth 
quarter and full year 2012, respectively, further reduced net income (nil in 
2011).

Operating Income

Fourth quarter operating income was $59.2 million ($0.19 per share), down 21 
per cent from $74.7 million ($0.26 per share) in the fourth quarter of 2011. 
Full year 2012 operating income was $163.2 million ($0.55 per share), down 44 
per cent from $293.5 million ($1.02 per share) in 2011. The decrease in 
operating income was primarily due to lower realized natural gas prices in 
2012. The following table summarizes operating income for the fourth quarter 
and full year 2012 and 2011.
                                       
                               Three months ended  Twelve months ended
                                   December 31         December 31
                                 2012         2011   2012          2011

Net income                       84.5       (49.0)  139.2         287.0

Add (deduct) non-operating                                             
items, net of tax:
                                                           
    Unrealized (gain) loss on  (40.2)         59.3 (10.7)          12.2
    risk management contracts
    Realized loss on risk
    management contracts
    recognized in
    previous quarters ((1))       8.9         28.2      -             -
    Foreign exchange (gain)       6.2        (7.0)  (6.2)           7.2
    loss on revaluation of
    debt
                                                           
    Gains on disposal of            -          2.4  (0.2)        (66.2)
    petroleum and natural gas
    properties
    Impairment on property,         -         40.9   39.8          53.2
    plant and equipment
    Unrealized (gain) loss on   (0.2)        (0.1)    1.2           0.1
    short-term investment

Operating Income - $ millions    59.2         74.7  163.2         293.5
((2))

Operating Income - $ per share   0.19         0.26   0.55          1.02
((2))

(1) ARC has entered into certain commodity price risk management
    contracts that pertain to production periods spanning the entire
    calendar year but that are settled at the end of the year on an
    annual average benchmark commodity price.  Throughout the year, ARC
    has applied the portion of losses associated with these contracts
    to the funds from operations calculation in the production period
    to which they relate to more appropriately reflect the funds from
    operations generated during the period after any effect of
    contracts used for economic hedging. At December 31, all gains and
    losses associated with these contracts have been realized, and in
    the fourth quarter losses previously applied to prior quarters are
    reversed.

(2) Operating income is not a recognized performance measure under GAAP
    and does not have a standardized meaning prescribed by GAAP.  The
    term "operating income" is defined as net income excluding the
    impact of after-tax unrealized gains and losses on risk management
    contracts, after-tax unrealized gains and losses on foreign
    exchange, after-tax gains and losses on short-term investments,
    after-tax impairment (recovery) on property, plant and equipment,
    after-tax gains on disposal of petroleum and natural gas properties
    and the effect of changes in statutory income tax rates.  ARC
    believes that adjusting net income for these non-operating items
    presents a better measure of financial performance that is more
    comparable between periods.  The most directly comparable measure
    of operating income calculated in accordance with GAAP is net
    income.

Risk Management

As part of its overall strategy to protect cash flow and project economics, 
ARC uses a variety of instruments to hedge crude oil, natural gas, foreign 
exchange rates, electrical power costs and interest rates.

ARC has hedges in place to protect prices on crude oil volumes through 2014 
and natural gas volumes through 2017. Approximately 45 per cent of expected 
2013 production is currently hedged at prices that will support ARC's business 
plan. Approximately 45 per cent of expected 2013 crude oil production is 
currently hedged at an average floor/ceiling price of US$95/US$104 per barrel 
and approximately 50 per cent of expected 2013 natural gas production is 
currently hedged at an average floor/ceiling price of US$3.41/US$3.95 per 
mmbtu. Additional natural gas production is hedged in 2014 through 2017 at 
floor prices of US$4.00 per mmbtu to support long-term development economics 
for ARC's significant natural gas resource base. ARC will continue to pursue 
opportunities to protect funds from operations in 2013 and beyond and will 
continue to take positions in natural gas and/or crude oil at levels that will 
provide greater certainty on rates of return.

The following table summarizes ARC's average crude oil and natural gas hedged 
volumes for the period 2013 through 2017. For a complete listing and terms 
of ARC's hedging contracts, see Note 15 "Financial Instruments and Market Risk 
Management" in the Audited Consolidated Financial Statements for the years 
ended December 31, 2012 and 2011.
                                                 

Hedge
Positions
Summary (
(1))
As at
February
6, 2013           2013                2014             2015 - 2017

Crude Oil US$/bbl bbl/day    US$/bbl    bbl/day    US$/bbl    bbl/day
((2))


       104.01  14,992     100.00      2,479          -          -
Ceiling 
Floor    95.01  14,992      90.00      2,479          -          - 
Sold     64.17  11,984      70.00      1,240          -          -
Floor 
Natural      US$/    US$/ US$/ mmbtu US$/ mmbtu US$/ mmbtu US$/ mmbtu
Gas ((3))   mmbtu   mmbtu 
         3.95 168,767       4.83     90,000       5.00     60,000
Ceiling 
Floor        3.41 168,767       4.00     90,000       4.00     60,000 
(1)  The prices and volumes noted above represent averages for several 


     contracts representing different periods and the average price for
     the portfolio of options listed above does not have the same
     payoff profile as the individual option contracts.  Viewing the
     average price of a group of options is purely for indicative
     purposes.

(2)  For 2013, all floor positions settle against the monthly average
     WTI price, providing protection against monthly volatility. 
     Positions establishing the "Ceiling" have been sold against either
     the annual average WTI price or a six month average WTI price.  In
     the case of settlements on annual and six month term positions,
     ARC will only have a negative settlement if prices average above
     the strike price for an entire year or the six month period,
     respectively.  These positions provide ARC with greater potential
     upside price participation for individual months.

(3)  The natural gas prices shown translate all AECO positions to NYMEX
     equivalent prices.

ARC realized cash gains on natural gas hedging contracts of $0.4 million and 
$66.1 million, respectively, for the fourth quarter and full year 2012 as 
average hedged prices exceeded average market prices for natural gas during 
2012.

ARC realized cash gains on crude oil hedging contracts of $8.9 million for the 
fourth quarter as approximately 48 per cent of fourth quarter 2012 crude oil 
production was hedged at an average floor/ceiling price of US$90/US$91 per 
barrel relative to the fourth quarter average market price of US$88.18 per 
barrel. ARC realized a loss of $7.2 million on crude oil hedges for full 
year 2012 as average market prices exceeded average hedged prices during 2012.

OPERATIONAL REVIEW

ARC achieved record fourth quarter and full year production, a significant 
accomplishment given the reduction in the 2012 capital budget from $760 
million to actual 2012 capital spending of $608 million. ARC's fourth 
quarter production of 95,725 boe per day was up four per cent relative to the 
fourth quarter of 2011 with full year 2012 production of 93,546 boe per day up 
12 per cent relative to 2011. Fourth quarter production was up seven per 
cent relative to the third quarter of 2012 due to strong well performance at 
Pembina and Ante Creek and excellent run time at the Dawson gas plant 
following scheduled maintenance downtime in the third quarter of 2012.

ARC spent $190.2 million in the fourth quarter of 2012 and drilled 38 gross 
(35 net) wells on operated lands (36 oil wells and two natural gas wells), 
bringing total 2012 spending to $608 million and 144 gross (134 net) operated 
wells being drilled (137 oil wells, four liquids-rich gas wells and three 
natural gas wells). ARC's fourth quarter and full year 2012 capital program 
focused on oil and liquids development at Pembina, Goodlands, Tower, and on 
various oil properties throughout southeast Saskatchewan and Manitoba.

ARC's capital spending focus on oil and liquids in 2011 and 2012 has resulted 
in strong production gains in 2012. As a result of the successful execution 
of its capital program, ARC's crude oil and liquids production increased 15 
per cent to 37,683 boe per day in the fourth quarter of 2012 relative to the 
fourth quarter of 2011. Production from new oil and liquids-rich gas wells 
drilled, predominantly at Pembina, Goodlands, and Ante Creek and commissioning 
of the new 30 mmcf per day Ante Creek gas processing facility in February 2012 
contributed to higher liquids production in 2012.

ARC strives to conduct its operations in the most safe and responsible 
manner. During 2012, ARC executed its capital program and field operations 
with zero lost-time incidents ("LTI's") for field employees and two LTI's for 
contractors, illustrating ARC's excellent safety track record.

Pembina
Fourth quarter Pembina production exceeded expectations due to strong well 
performance. Production increased to approximately 12,300 boe per day in the 
fourth quarter, up 15 per cent relative to the fourth quarter of 2011 and nine 
per cent higher than the third quarter of 2012. Pembina fourth quarter 
production was comprised of 75 per cent light oil and liquids and 25 per cent 
natural gas.

ARC drilled 11 gross operated (8 net) horizontal Cardium oil wells at Pembina 
in the fourth quarter, bringing the total to 40 gross operated horizontal 
Cardium oil wells in 2012. ARC spent $102.6 million on development at 
Pembina in 2012.

ARC plans to spend approximately $120 million in the Pembina area in 2013 with 
plans to drill 54 gross operated Cardium oil wells. ARC will conduct 
extensive work on waterflood management at Pembina in 2013 with the drilling 
of water injector wells, producer to injector well conversions, and injector 
well stimulations to optimize reservoir recoveries.

Ante Creek
ARC has a land position of 267 net sections at Ante Creek, a Montney oil and 
natural gas play in northern Alberta. ARC's Ante Creek production averaged 
10,300 boe per day in the fourth quarter of 2012 (50 per cent oil and 
liquids), up 45 per cent relative to the fourth quarter of 2011 due to 
increased gas processing capacity upon commissioning of the new 30 mmcf per 
day Ante Creek gas plant in February 2012.

ARC drilled 24 gross operated oil wells in 2012, down significantly from the 
original 2012 drilling program planned at Ante Creek, as ARC deferred several 
wells to 2013. An inventory of previously drilled wells were brought on 
stream with the commissioning of the new gas plant, resulting in production 
growth at Ante Creek despite not having drilled any new wells in the second 
and third quarters of 2012.

Ante Creek is a significant growth area for ARC. ARC plans to spend $132 
million to drill 34 gross operated horizontal oil wells in 2013. As ARC 
increases oil production at Ante Creek, we will continue to fill the 30 mmcf 
per day operated Ante Creek gas processing plant with solution gas. During 
2013, the focus will be on optimizing capital efficiencies with the execution 
of pad drilling programs and continued assessment of optimal well spacing. 
The shift to pad drilling will result in production staying relatively flat 
for the first eight or nine months of 2013, with acceleration of growth once 
the first pad comes on production in the fall of 2013. This will result in a 
full year average production increase of approximately 15 per cent, while 2013 
exit volumes are expected to increase by 35 per cent to approximately 15,000 
boe per day.

Parkland/Tower
ARC has a land position of 23 net sections at Parkland, located in 
northeastern British Columbia, a Montney liquids-rich natural gas play. ARC's 
Tower property consists of 56 net sections of contiguous land north and west 
of the Parkland field. Fourth quarter production for the Parkland/Tower area 
was approximately 8,700 boe per day (20 per cent crude oil and liquids and 80 
per cent natural gas).

The Tower property is classified as a Montney oil play, producing 
predominantly light oil and free condensate with additional liquids in the gas 
stream, therefore providing favorable economics. At year-end 2012, the 
resource assessment for Tower identified approximately 1.5 billion barrels of 
discovered petroleum initially in place (please see ARC's February 6, 2013 
News Release "ARC Resources Ltd. Announces Fifth Consecutive Year of Greater 
than 200 per cent Produced Reserves Replacement in 2012" for further 
details). ARC started to drill the first of two, eight well pads at Tower 
during the fourth quarter and will continue drilling the two pads through 2013.

During 2012, ARC drilled 11 gross operated horizontal oil wells at Tower, 
bringing ARC's total drill count to 14 gross operated wells since late 2011. 
At year-end 2012, nine Tower wells were tied-in, however, due to liquids 
handling facility limitations, production rates are restricted until new 
facilities come on-stream in early 2014. Fourth quarter Tower production 
averaged approximately 1,200 boe per day, 250 per cent higher than the fourth 
quarter of 2011, and was comprised of approximately 800 barrels per day of 
light oil, condensate and liquids and 2.5 mmcf per day of natural gas 
production.

Late in 2012, ARC received all regulatory approvals to construct 120 mmcf per 
day of gas processing and liquids handling facilities in the Parkland/Tower 
area. The plant has a designed capability to handle up to 130 barrels of oil 
and liquids per mmcf, however actual liquids production will depend upon the 
ratio of Parkland and Tower wells feeding into the facilities. Construction 
of the first 60 mmcf per day phase of the facility commenced late in 2012 with 
site clearing and pile driving ongoing. ARC expects the first 60 mmcf per 
day phase of the plant to be on-stream in early 2014.

The Parkland/Tower region will see considerable activity in 2013 as ARC plans 
to spend $250 million to drill 24 gross operated wells (11 oil wells at Tower, 
13 liquids-rich wells at Parkland) and to complete construction of the 60 mmcf 
per day gas processing and liquids handling facility and associated 
infrastructure. Approximately $100 million of the Parkland/Tower 2013 
capital program will be directed towards facilities, infrastructure and 
drilling of new wells in anticipation of the new facility being commissioned 
in early 2014.

Production growth from the 2013 Parkland/Tower capital program will not be 
realized until early 2014 when the new facility is commissioned and wells are 
brought on-stream. ARC expects 2013 average Parkland/Tower production to 
increase by a modest five per cent relative to 2012, followed by more 
significant growth in 2014. ARC expects to exit 2013 at approximately 10,000 
boe per day (20 per cent oil and liquids, 80 per cent natural gas). ARC will 
continue with a "drill to fill" program at Parkland/Tower to fill the new 
facility following commissioning.

ARC's 2013 Tower drilling program has shifted to the execution of multi-well 
pad drilling programs to optimize capital efficiencies. The pad drilling 
program is expected to decrease the overall per well cost to drill, complete 
and tie-in; however there will be longer lead time from the start of drilling 
until the wells commence production as multiple wells in the pad are drilled, 
completed, tested, tied-in and brought on-stream at one time. As a result, 
the Tower production profile will increase in a step wise fashion as wells are 
brought on-stream in groups of eight.

Southeast Saskatchewan and Manitoba
Fourth quarter production in this region averaged approximately 12,200 boe per 
day of light crude oil, up 16 per cent from the fourth quarter of 2011, due to 
better operational run time in 2012. ARC drilled 63 gross operated oil wells 
in southeast Saskatchewan and Manitoba during 2012.

The highest level of 2012 activity in this region was focused at the Goodlands 
property, a light oil play located in southwestern Manitoba. Fourth quarter 
Goodlands production averaged 2,400 boe per day of light crude oil, up 70 per 
cent from the fourth quarter of 2011. During the fourth quarter ARC drilled 
seven horizontal wells at Goodlands. During 2012, ARC spent $46.9 million 
and drilled 28 oil wells at Goodlands.

ARC plans to spend $73 million to drill 51 gross operated oil wells in 
southeast Saskatchewan and Manitoba in 2013. Full year average oil 
production is expected to grow by approximately eight per cent to 12,500 boe 
per day in 2013. A considerable portion of the activity in this area will 
occur at Goodlands where ARC plans to drill 22 horizontal oil wells. Oil 
production at Goodlands is expected to average 2,700 boe per day in 2013, an 
increase of approximately 20 per cent relative to average 2012 levels.

Dawson
Dawson averaged 168 mmcf per day of natural gas and 800 barrels per day of 
condensate and liquids during the fourth quarter of 2012. Dawson fourth 
quarter production was up 14 per cent relative to the third quarter of 2012 
due to excellent run time at the Dawson gas plant following scheduled 
maintenance in the third quarter. 

As a result of well productivity in Dawson continuing to exceed expectations, 
ARC had an inventory of four horizontal wells waiting to be brought on-stream 
at the end of 2012. ARC plans to bring the existing wells on-stream through 
the first quarter of 2013 to hold Dawson production flat at the maximum 
facility capacity rate of 165 mmcf per day. ARC plans to spend $52 million 
on development activities at Dawson in 2013 including the drilling of nine 
gross operated horizontal gas wells to maintain production flat through 2013 
and into 2014.

DIVIDENDS

ARC paid dividends totaling $0.30 per share for the fourth quarter of 2012 and 
$1.20 per share for year ended December 31, 2012. The Board of Directors has 
confirmed a dividend of $0.10 per share for January 2013, payable on February 
15, 2013, and has conditionally declared a monthly dividend of $0.10 per share 
for February through April 2013 payable as follows:
                                                       

Ex-dividend date        Record date      Payment date Per share amount

January 29, 2013   January 31, 2013 February 15, 2013      $0.10 ((1))

February 26, 2013 February 28, 2013    March 15, 2013      $0.10 ((2))

March 28, 2013       March 31, 2013    April 15, 2013      $0.10 ((2))

April 26, 2013       April 30, 2013      May 15, 2013      $0.10 ((2))

(1) Confirmed on January 16, 2013.

(2) Conditionally declared, subject to confirmation by news release and
    further resolution by the Board of Directors.

ARC's Dividend Reinvestment Plan ("DRIP") allows for the reinvestment of 
dividends into additional common shares of ARC at a five per cent discount to 
prevailing market price. During 2012, ARC paid dividends of $357.4 million, of 
which $117.4 million was reinvested into ARC shares through the DRIP. 
Proceeds received from the DRIP are a source of funding for ARC's capital 
programs.

The dividends have been designated as eligible dividends under the Income Tax 
Act (Canada). The declaration of the dividends is conditional upon 
confirmation by news release and is subject to any further resolution of the 
Board of Directors. Dividends are subject to change in accordance with ARC's 
dividend policy depending on a variety of factors and conditions existing from 
time-to-time, including fluctuations in commodity prices, production levels, 
capital expenditure requirements, debt service requirements, operating costs, 
royalty burdens, foreign exchange rates and the satisfaction of solvency tests 
imposed by the Business Corporations Act (Alberta) for the declaration and 
payment of dividends.

See "Outlook" for additional discussion regarding Dividends.

OUTLOOK

The foundation of ARC's business strategy is "risk-managed value creation". 
High quality assets, operational excellence, financial strength, and top 
talent are the key principles underpinning ARC's business strategy. ARC's 
goal is to create shareholder value in the form of regular dividends and 
anticipated capital appreciation relating to future growth.

2012 was punctuated by commodity price volatility as natural gas prices fell 
to ten year lows and Canadian crude oil differentials widened to unprecedented 
levels. Volatile commodity prices and crude oil differentials are expected 
to continue through 2013 and into 2014, and as such, we are taking steps to 
mitigate the associated risks and preserve our strong financial position 
through this period of volatile commodity prices.

Our diverse portfolio of high quality crude oil, liquids-rich gas and dry gas 
assets provides optionality to exploit opportunities that offer the highest 
rates of return during a downturn in any one commodity. In the current 
commodity price environment, ARC favors investments in oil and liquids-rich 
projects that offer the highest rates of return at this time. While our 
investment in dry gas development decreased in 2011 and 2012, we have 
maintained our natural gas production levels and have not lost sight of our 
dry gas business. We believe there is considerable upside in our dry gas 
assets given our significant resource base and the long-term positive outlook 
for natural gas prices.

During 2012, ARC achieved record production, increased liquids volumes, and 
drilled 144 gross operated wells, 98 per cent of which targeted oil and 
liquids-rich natural gas properties. ARC's record production was a 
significant achievement given the reduction in the 2012 capital program from 
$760 million to actual capital spending of $608 million. Despite the 
capital reduction, ARC met its original production guidance and did so while 
executing an oil and liquids focused program, which typically requires higher 
capital investment. ARC has a disciplined approach to capital planning and 
execution focused on optimizing capital efficiencies; which resulted in 
capital being allocated to the highest rate of return projects in 2012.

ARC plans to execute an $830 million capital program in 2013, focused 
primarily on oil and liquids-rich gas development and infrastructure spending 
to facilitate future growth. ARC expects to deliver modest production growth 
of approximately three per cent in 2013 with more significant growth expected 
in 2014, upon commissioning of the new Parkland/Tower gas processing and 
liquids handling facility. The 2013 capital program will have an enhanced 
focus on multi-well pad drilling programs in key areas. This shift is expected 
to result in both cost savings and improved capital efficiencies. ARC 
expects to finance its 2013 capital program with funds from operations, 
proceeds from the Dividend Re-investment Plan ("DRIP"), existing credit 
capacity, working capital, and proceeds from the disposition of minor and 
non-strategic assets.

ARC continues to actively hedge both crude oil and natural gas volumes to 
provide a greater level of certainty over revenues, funds from operations and 
economics of capital projects. Given ARC's significant natural gas resource 
base in the northeast British Columbia Montney and the recent volatility of 
natural gas prices, ARC has executed long-term natural gas hedges through 2017 
to provide greater certainty over project economics and cash flows.

ARC is focused on value creation, with the dividend being a key component of 
our business strategy. We believe that we are well positioned to sustain 
current dividend levels despite the volatile commodity price environment. 
ARC's fourth quarter and full year 2012 dividend payout ratio was 44 per cent 
and 50 per cent of funds from operations, respectively, levels which we 
believe are reasonable given the current commodity price environment. Going 
forward, as we grow our production and funds from operations, we expect that 
our dividend payout ratio will naturally decline to a level that provides 
greater financial flexibility. Our business model is dynamic and we 
continually assess dividend levels and capital spending in light of current 
and forecast market conditions. If we experience a prolonged period of low 
commodity prices, our first response will be to defer certain growth capital. 
If additional measures become necessary, dividend levels will be reconsidered 
in order to preserve our strong financial position in the long-term.

ARC's Board of Directors has approved the implementation of a Stock Dividend 
Program ("SDP"), subject to shareholder approval at our Annual General and 
Special Meeting on May 15, 2013. While the SDP is similar to ARC's existing 
DRIP, the SDP has certain income tax attributes which may make it more 
attractive to some shareholders. The SDP will be offered to both Canadian 
and non-Canadian shareholders, whereas the current DRIP will continue to be 
only offered to Canadian shareholders. Further details regarding the SDP will 
be outlined in our Information Circular - Proxy Statement. We plan to retain 
the DRIP as a complement to the SDP.

ARC's 2012 financial and operational results closely approximated 2012 
guidance estimates with the exception of G&A expense, which was nine per cent 
higher than guidance, due to higher long-term incentive plan expense 
attributed to a higher performance multiplier applicable to the performance 
share units and additional employees being eligible to receive long-term 
incentive payments. Higher G&A expense was also partially attributed to a 
one-time, special executive retirement payment recorded in the fourth quarter 
of 2012 in conjunction with ARC's CEO succession that was announced in the 
fourth quarter of 2012. ARC expects full year average 2013 production to be in 
the range of 93,000 - 97,000 boe per day. ARC's planned 2013 capital 
expenditure program of $830 million excludes unbudgeted amounts for the 
acquisition of land and small producing properties. The following table 
outlines 2013 guidance estimates.
                                                                       
                           2012       2012     % Variance          2013
                       Guidance     Actual                     Guidance

Production (boe/d)                                                     
       Oil (bbl/d)     30,000 -                                32,000 -
                         31,000     31,454              1        34,000
       Condensate       2,100 -                                 1,800 -
       (bbl/d)            2,500      2,217              -         2,000
       Gas (mmcf/d)   340 - 350      342.9              -     340 - 350
       NGLs (bbl/d)     2,100 -                                 2,400 -
                          2,600      2,728              5         2,800

Total (boe/d)          91,000 -     93,546              -      93,000 -
                         94,000                                  97,000

Expenses ($/boe):                                                      
       Operating         9.50 -                                  9.50 -
                           9.70       9.40              1          9.70
       Transportation    1.30 -                                  1.40 -
                           1.40       1.29              1          1.50
       General and                                           
       administrative    2.45 -                                  2.50 -
       ((1)(5))            2.60       2.84            (9)          2.70
       Interest          1.20 -                                  1.20 -
                           1.30       1.32            (2)          1.30
       Income taxes (    0.90 -                                  1.05 -
       (2))                1.05       0.87              3          1.15

Capital expenditures        600        608            (1)    
($ millions) ((3))                                                  830

Net property and        25 - 50         32              -    
undeveloped land
acquisitions ($
millions) ((4))                                                       -

Weighted average            297        297              -    
shares outstanding 
(millions)                                                          311

(1) The 2012 guidance for general and administrative expense per boe
    was based on a range of $1.75 - $1.85 prior to the recognition of
    any expense associated with ARC's long-term incentive plan and
    $0.70 - $0.75 per boe associated with ARC's long-term incentive
    plan.  Actual per boe costs for each of these components for
    December 31, 2012 were $1.91 per boe and $0.93 per boe,
    respectively.

(2) The 2013 corporate tax estimate will vary depending on the level of
    commodity prices and represents only the current income tax
    expense.

(3) Excludes amounts related to unbudgeted net acquisitions of land and
    small producing properties which totaled approximately $32.4
    million in the twelve months of 2012.

(4) Minor net property acquisitions and undeveloped land are not
    included in the 2013 capital budget of $830 million.

(5) The 2013 annual guidance for general and administrative cost per
    boe is based on a range of $1.75 - $1.90 prior to the recognition
    of any expense associated with ARC's long-term incentive plan and
    $0.75 - $0.80 per boe associated with ARC's long-term incentive
    plan.

SUPPLEMENTAL FINANCIAL INFORMATION

CONSOLIDATED BALANCE SHEETS (unaudited)

As at December 31
                                                                       
                                                                       

(Cdn$ millions)                 December 31, 2012     December 31, 2011

ASSETS                                                                 

Current assets                                                         

  Cash and cash equivalents     $           194.6   $               0.5

  Short-term investment                       1.7                   3.3

  Accounts receivable                       164.3                 168.1

  Prepaid expenses                           13.1                  14.3

  Risk management contracts                  30.9                  21.0

  Assets held for sale                        0.3                   4.6
                                            404.9                 211.8

Reclamation funds                            29.8                  26.9

Risk management contracts                     1.7                   3.7

Property, plant and equipment             4,704.4               4,645.6

Intangible exploration and                  238.1                 187.7
evaluation assets

Goodwill                                    248.2                 248.2

Total assets                    $         5,627.1   $           5,323.9
                                                                       

LIABILITIES                                                            

Current liabilities                                                    

  Accounts payable and accrued  $           301.0   $             305.0
  liabilities

  Current portion of long-term               39.7                  40.5
  debt

  Dividends payable                          30.9                  28.9

  Risk management contracts                   0.5                  18.9
    Liabilities associated with                1.3                   1.9
          assets held for sale
                                            373.4                 395.2

Risk management contracts                    10.3                   3.0

Long-term debt                              747.7                 721.2

Long-term incentive                          24.5                  18.5
compensation liability

Other deferred liabilities                   19.3                  21.4

Asset retirement obligations                532.9                 496.4

Deferred taxes                              522.3                 506.4

Total liabilities                         2,230.4               2,162.1
                                                                       

SHAREHOLDERS' EQUITY                                                   

  Shareholders' capital                   3,670.2               3,218.3

  Contributed surplus                         1.7                   0.5

  Deficit                                 (275.2)                (57.0)

Total shareholders' equity                3,396.7               3,161.8

Total liabilities and           $         5,627.1   $           5,323.9
shareholders' equity

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

For the three and twelve months ended December 31
                                 Three Months Ended   Twelve Months Ended
                                 December 31           December 31

(Cdn$ millions, except per      2012        2011       2012       2011
share amounts)
                                                                      

Sales of crude oil, natural $  375.4 $     386.8  $ 1,389.4  $ 1,438.2
gas and natural gas liquids

Royalties                     (50.3)      (64.3)    (195.7)    (219.3)

REVENUE                        325.1       322.5    1,193.7    1,218.9
                                                                      

Gain (loss) on risk             55.6      (96.1)       80.6       59.3
management contracts
                               380.7       226.4    1,274.3    1,278.2
                                                                      

EXPENSES                                                              

  Transportation                11.1         9.7       44.1       36.1

  Operating                     77.5        79.6      321.8      295.3

  General and                   26.4        18.6       97.1       80.1
  administrative

  Interest and financing        11.5         9.2       45.3       38.9
  charges

  Accretion of asset             3.1         3.3       12.4       13.4
  retirement obligation

  Depletion, depreciation,     133.2       178.1      571.1      509.2
  amortization and
  impairment

  Loss (gain) on foreign         8.3       (8.8)      (7.3)       10.5
  exchange

  (Gain) loss on short-term    (0.3)       (0.1)        1.6        0.2
  investments

  Gain on disposal of              -         3.2      (0.2)     (89.5)
  petroleum and natural gas
  properties
                               270.8       292.8    1,085.9      894.2
                                                                      

Provision for (recovery of)                                           
income taxes

  Current                        3.6           -       29.9          -
    Deferred                    21.8      (17.4)       19.3       97.0
                                25.4      (17.4)       49.2       97.0
                                                                      

Net income (loss)           $   84.5 $    (49.0)  $   139.2  $   287.0
                                                                      

Net income (loss) per share                                           
    Basic                   $   0.27 $    (0.17)  $    0.47  $    1.00
    Diluted                 $   0.27 $    (0.17)  $    0.47  $    1.00

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

For the three and twelve months ended December 31
                                 Three Months Ended   Twelve Months Ended
                                 December 31           December 31
                                                                      

(Cdn$ millions)               2012          2011    2012          2011
                                                                      

Net income (loss)           $ 84.5 $      (49.0) $ 139.2 $       287.0

Other comprehensive loss,                                             
net of tax

  Net unrealized losses on                                
  available-for-sale
  reclamation fund's
  investments                    -           0.1       -           0.1

Other comprehensive income       -           0.1       -           0.1

Comprehensive income (loss) $ 84.5 $      (48.9) $ 139.2 $       287.1

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
For the years ended December 31

(Cdn$ millions)                                                       
                                                     Accumulated
                                                           other           Total
               Shareholders' Contributed           comprehensive   shareholders'
                     capital     surplus   Deficit          loss          equity

December 31,   $     3,112.5 $         - $       - $       (0.1)   $     3,112.4
2010

Shares issued            1.6           -         -             -             1.6
for cash

Shares issued                                                                   
pursuant to
the


  dividend         104.2           -         -             -           104.2
  reinvestment 
   program 
Share option               -         0.5         -             -             0.5
expense 
Comprehensive              -           -     287.0           0.1           287.1
income 
Dividends                  -           -   (344.0)             -         (344.0)
declared 
December 31,   $     3,218.3 $       0.5 $  (57.0) $           -   $     3,161.8
2011 
Shares issued          346.2           -         -             -           346.2
for cash 
Shares issued                                                                   
pursuant to
the 
  dividend         116.3           -         -             -           116.3
  reinvestment 


       program

Share issue           (10.6)           -         -             -          (10.6)
costs ((1))

Share option               -         1.2         -             -             1.2
expense

Comprehensive              -           -     139.2             -           139.2
income

Dividends                  -           -   (357.4)             -         (357.4)
declared

December 31,   $     3,670.2 $       1.7 $ (275.2) $           -   $     3,396.7
2012

(1) Amount is net of deferred tax recovery of $3.7 million.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

For the three and twelve months ended December 31
                                  Three Months Ended   Twelve Months Ended
                                  December 31           December 31

(Cdn$ millions)                   2012       2011      2012        2011
                                                                       

CASH FLOW FROM OPERATING                                               
ACTIVITIES

Net income (loss)            $    84.5 $   (49.0) $   139.2 $     287.0

Add items not involving                                                
cash:
        Unrealized (gain) loss  (53.6)       80.1    (14.2)        16.5
        on risk management
        contracts
        Accretion of asset         3.1        3.3      12.4        13.4
        retirement
        obligation
        Depletion,               133.2      178.1     571.1       509.2
        depreciation,
        amortization and
        impairment
        Unrealized loss            8.3      (9.4)     (8.2)         9.7
        (gain) on foreign
        exchange
        Gain on disposal of          -        3.2     (0.2)      (89.5)
        petroleum and
        natural gas
        properties
        Deferred tax expense      21.8     (17.4)      19.3        97.0
        (recovery)
        Other                    (0.7)      (0.4)       0.4         1.0

Net change in other              (2.0)        4.1    (10.6)       (9.6)
liabilities

Change in non-cash working      (12.0)       36.9     (5.7)        68.0
capital
                                 182.6      229.5     703.5       902.7
                                                                       

CASH FLOW FROM FINANCING                                               
ACTIVITIES

(Repayment) issue of             (2.1)       98.6   (324.2)      (35.2)
long-term debt under
revolving credit facilities,
net

Issue of Senior Notes                -          -     397.8           -

Repayment of Senior Notes        (9.3)      (9.7)    (39.6)      (16.3)

Issue of common shares             0.4        0.3     346.2         1.6

Share issue costs                (0.2)          -    (14.3)           -

Cash dividends paid             (60.0)     (59.6)   (239.1)     (238.7)
                                (71.2)       29.6     126.8     (288.6)
                                                                       

CASH FLOW FROM INVESTING                                               
ACTIVITIES

Acquisition of petroleum and     (2.2)     (23.0)    (33.7)      (57.8)
natural gas properties

Disposals of petroleum and         0.3      (1.2)       1.1       167.6
natural gas properties

Property, plant and            (179.5)    (175.7)   (557.3)     (614.8)
equipment development
expenditures

Exploration and evaluation      (10.7)     (18.3)    (50.4)     (113.3)
expenditures

Net reclamation fund             (1.3)      (1.2)     (2.8)       (1.8)
contributions

Change in non-cash working        43.8     (39.7)       6.9         4.5
capital
                               (149.6)    (259.1)   (636.2)     (615.6)

(DECREASE) INCREASE IN CASH     (38.2)          -     194.1       (1.5)
EQUIVALENTS

CASH EQUIVALENTS, BEGINNING OF   232.8        0.5       0.5         2.0
PERIOD

CASH EQUIVALENTS, END OF     $   194.6 $      0.5 $   194.6 $       0.5
PERIOD

The following are included in
cash flow from operating                                       
activities:

Income taxes paid in cash    $       - $        - $       - $       1.7

Interest paid in cash        $    10.9 $     11.0 $    30.0 $      25.8

Forward-looking Information and Statements

This news release 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 news 
release contains forward-looking information and statements pertaining to the 
following: guidance as to the capital expenditure plans of ARC under the 
heading "Financial and Operational Highlights", as to its views on the effect 
of commodity prices under the heading "Economic Environment", as to its risk 
management plans for 2013 and beyond under the heading "Risk Management", as 
to its production, exploration and development plans under the heading 
"Operational Review", and all matters including 2013 guidance under the 
heading "Outlook".

The forward-looking information and statements contained in this news release 
reflect 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; 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 reserves and resource volumes; 
certain commodity price and other cost assumptions; and the continued 
availability of adequate debt and equity financing and funds from operations 
to fund its planned expenditures. 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 news release 
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; changes in the 
demand for or supply of ARC's products; unanticipated operating results or 
production declines; 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 and resource 
volumes; limited, unfavorable 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 news release and in ARC's Annual Information Form).

The forward-looking information and statements contained in this news release 
speak only as of the date of this news release, 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.

ARC Resources Ltd. ("ARC") is one of Canada's largest conventional oil and gas 
companies with an enterprise value of approximately $8 billion. ARC expects 
2013 oil and gas production to average 93,000 to 97,000 barrels of oil 
equivalent per day from its properties in western Canada. ARC's Common 
Shares trade on the TSX under the symbol ARX.

ARC RESOURCES LTD.

Myron M. Stadnyk
President and Chief Executive Officer









About ARC Resources Ltd., please visit our website www.arcresources.com or 
contact: Investor Relations, E-mail:ir@arcresources.com Telephone: (403) 
503-8600 Fax: (403) 509-6427 Toll Free 1-888-272-4900 ARC Resources 
Ltd. Suite 1200, 308 - 4th Avenue S.W. Calgary, AB T2P 0H7

SOURCE: ARC Resources Ltd.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/06/c3402.html

CO: ARC Resources Ltd.
ST: Alberta
NI: OIL ERN 2575 WNEWS DIV 

-0- Feb/06/2013 23:00 GMT