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ARC Energy Trust at FirstEnergy Capital Trust Conference - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

JOHN DIELWART, PRESIDENT & CEO, ARC ENERGY TRUST: We don't get to Montreal that often, so we enjoy coming to tell our story. I will just -- a few brief introductory slides and then we'll get into the meat of it. As Jill said, we were one of the earlier trusts, launched in 1996. Current production, about 63,000 barrels a day of oil and NGL and gas. We are roughly 50/50 oil/natural gas, which is a good thing today and our reserves are split about the same way.

I have got this vision chart in here. I am not going to go through it. I think the most important thing -- this is supposed to be an internal document, but what we really highlight here -- what we are all about is risk managed value creation. That is what we have been focused on since 1996 and that's what we are going to continue to be focused on. Nothing is changing and our results have been very strong as a result of this very focused approach to the business and managing risk in our basin is everything as the basin matures.

Fortunately, there are things we can do to mitigate risk on the technical side. We can mitigate risk on the commodity side. We have been unable to mitigate risk on the political side and that has been the unfortunate part of the last 12 months.

The strategy is pretty simple -- stability and distribution. We have had -- we are now a little over two years at our current distribution. Before that, we were just under three years at the previous level. We had an intermediate -- we went from $0.15 to $0.17 to $0.20 over the course of a few months, so we have been $0.15 or more for the last five years.

We are very focused on maintaining production through internal opportunities and we have a very strong inventory of opportunities that are going to keep us in good stead for some time to come and we look to top that up with acquisitions from time to time. Just maybe make a note to the guys controlling me up here, you are not counting me down. I am going to keep going as long as it says 25 minutes on this time. There you go. I got a bonus three minutes and I'm going to use it all. No, I won't. I think we will be good.

Maintaining financial flexibility is another very key component of our strategy and our target is 1X debt to cash flow, which is at the very low end of the range for the sector right now. Although the debt to cash flow in the sector is higher than one would expect just because of the low gas prices right now. So we are still at the low end of it and that is where we want to be and I have already talked about value-adding acquisitions.

You hear me talk this all the time and this leads into some conversation later about what happens post-2010. Since the day we started to today nothing has changed. To be successful in this business, we really need three key things and I would argue it doesn't matter whether you are in the oil and gas business, you're in manufacturing, doesn't matter what business you are in, you need quality assets and ours are recognized as one of the best in the sector.

You need a low cost structure or at least on a relative basis. I don't think anyone could say the cost structure in Western Canada is low, but if you are lower than your peers then you should do well and our netbacks are among the highest in the sector. We do have some high costs, but we have very high netback properties and you need a management team that continues to deliver results and we would argue that that's been our case for some time.

I am going to quickly run through some charts here. There is a lot of discussion about what is the right distribution profile, do you live within cash flow, should you be growing reserves per unit, production per unit. So the only comment that I would make...

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