Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (December 2020)
36 slides from Baytex Energy's investor presentation, December 2020
Slide 1: Investor Presentation December 2020
Investor Presentation December 2020
Slide 2: Advisory: Forward Looking Statements
Advisory Forward Looking Statements Any “financial outlook” or “future oriented financial information” in this presentation as defined by applicable securities laws, has been approved by management of Baytex. Such financial outlook or future oriented financial information is provided for the purpose
Slide 3: Advisory (Cont.)
Advisory (Cont.) costs imposed by climate change initiatives; variations in interest rates and foreign exchange rates; risks associated with our hedging activities; changes in income tax or other laws or government incentive programs; uncertainties associated with estimating oil and natural gas rese
Slide 4: Advisory Regarding Oil and Gas Information
Advisory (Cont.) Advisory Regarding Oil and Gas Information The reserves information contained in this presentation has been prepared in accordance with National Instrument 51-101 -Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). The determi
Slide 5: Investment Highlights
Investment Highlights High Quality and ▪ ~ 10 or more years of projected drilling inventory in each of our Diversified Oil Portfolio core areas (Viking, Eagle Ford and Canadian heavy oil) Across Multiple Plays ▪ Strong capital efficiencies and flexibility on discretionary capital Track Record of ▪ E
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE Average Daily Volume (1) 7.4 million (Canada) Shares Outstanding (2) 561 million Market Capitalization / Enterprise Value (2) $370 million / $2,277 million Operating Statistics Production (Gross W.I.) (3) 73,000 – 77,000 boe/d PEACE RIVER Produ
Slide 7: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 15% reduction in GHG 41% reduction in lost time emissions intensity in 2019; incident frequency in 5 target 30% by 2021 years Gas Conservation Indigenous Relations 99.5% routine gas Recent agreements with conservation in Peace River Woodland Cree First in
Slide 8: 2020 Highlights
2020 Highlights We have re-set our business in the face of extremely volatile crude oil markets Action 2020 Highlights • Extended maturity of credit facilities to April 2024 Negotiated bank credit facility extension and refinanced long-term • Issued US$500 million principal amount of long-term notes
Slide 9: 2020 Capital and Production
2020 Capital and Production Capital outlays minimized to preserve financial liquidity 2020 Capital Spending ($ millions) 2020 Production (boe/d) Annual Guidance $260-$290 Annual Guidance ~ 80,000 Production Capex base re-set reduction following expected to limited lead to investment positive free $1
Slide 10: 2021 Priorities and Free Cash Flow Profile
2021 Priorities and Free Cash Flow Profile 2021 Priorities Free Cash Flow Profile (1) (2) $500 Invest at sustaining capital levels $450 of $225 to $275 million $400 $350 $300 $ millions $250 Deliver stable production of 73,000 to 77,000 boe/d $200 $150 $100 $50 Maximize free cash flow and focus $0 o
Slide 11: High Graded Portfolio with Strong Capital Efficiencies
High Graded Portfolio with Strong Capital Efficiencies Improved capital efficiencies and high graded inventory increases sustainability at lower prices Economic Drilling Locations (1) Capital Efficiency (2) 3,000 $17,000 2,500 per boe/d Net Wells 2,000 $12,000 1,500 per boe/d 1,000 500 0 US$40 US$45
Slide 12: 2021 Capital Program
2021 Capital Program We have reset our business to 2021 Guidance (1) deliver free cash flow in a US$40 E&D CapEx $225 - 275 million to US$45 WTI environment Production 73,000 - 77,000 boe/d Oil and NGLs 81% • Cash neutrality (capital program fully funded) at US$35/bbl WTI Capital Budget CapEx ($MM)
Slide 13: Financial Liquidity
Financial Liquidity • Credit Facilities ~ 40% Balance Sheet (1) $ millions Undrawn Credit facilities $625 • $426 million of undrawn credit Long-term notes $1,199 capacity and liquidity, net of Long-term debt $1,824 working capital, of $344 million Working Capital deficiency $82 Net Debt $1,907 • Enh
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Full-Year Q4/2020 H1/2021 H2/2021 2021 WTI Fixed Hedges Volumes (bbl/d) 8,000 4,000 4,000 4,000 Fixed Price (US$/bbl) $42.78 $45.00 $45.00 $45.00 WTI 3-Way Option Volumes (bbl/d) 24,500 17,500 17,500 17,500 Average Sold Put / Put / Sold Call (US$/bbl) (1) $50/$58/$63 $35/$4
Slide 15: 2021E Adjusted Funds Flow Sensitivities
2021E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) (1) Including Including Sensitivities Hedges when Hedges when Excluding Hedges WTI is between WTI is between US$35/bbl and US$45/bbl and US$45/bbl US$52/bbl Change of US$1.00/bbl WTI crude oil $22.7 $12.8 $2
Slide 16: Asset Overview
= SSS a me cy BAYTEX ENERGY CORP.
Slide 17: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 28,650 boe/d 18,774 boe/d 24,791 boe/d 1,474 boe/d (Gross; Q3 2020) Oil and NGLs 77% 91% 89% 79% (Gross; Q3 2020) 2P Reserves (1)
Slide 18: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • Q3/2020 production of LONGHORN 28,650 boe/d (77% liquids) Atascosa • YTD 2020 - 53 gross (11.5 SUGAR
Slide 19: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory Production Asset Level Free Cash Drilling Inventory (2) (mboe/d) Flow (1) (C$ millions) (net locations) Stable production and $787MM cumulative asset > 10 year inventory at deep inventory drives level free cash flow since current pace ass
Slide 20: Enhanced Completions Drive Step Change in Well Performance
Enhanced Completions Drive Step Change in Well Performance 180 Day Cumulative Well Production Completion Activity 175 Stage Hz Length Proppant # of 17% increase 2019 over 2017 2019 Spacing (ft) (lbs/ft) Stages 150 5% increase 2019 over 2018 2018 (ft) 9 Mths Cumulative Production (mboe) 6,200 2,600 2
Slide 21: Viking Light Oil: Highly Prospective Sections
Viking Light Oil: 460 Highly Prospective Sections • Shallow (700 m), light oil (36° API) resource play with strong netbacks • Produced 18,800 boe/d (91% oil) in Q3/2020 • Added 229 net unbooked drilling opportunities in 2019 through multiple Kerrobert deals and asset swaps Plenty Esther/Hoosier Grea
Slide 22: Technical Advancements Drive Productivity Improvement
Technical Advancements Drive Productivity Improvement Shift to ERH(1) Wells Drives Productivity 95%+ of Viking Development now Improvements ERH Wells 400 100% Viking Wells by Vintage 350 90% 80 80% 300 70% 70 250 60% 60 200 50% 40% Oil Rate (bbl/d) 150 50 30% 100 40 20% 50 10% 30 0 0% 2012 2013 2014
Slide 23: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development Performance Drivers • Produced 12,100 boe/d in Q3/2020 (80% oil) Golden • Dominant 560 net sections • Strong capital efficiencies Seal Harmon Valley Peavine Lands • Q1/2020 strategic agreement with Peavine Metis settlement • 60 sections of land • Ear
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory Performance Drivers • Produced 12,700 boe/d in Q3/2020 (98% oil) Ardmore/Cold Lake • Strong capital efficiencies • Applying multi-lateral horizontal drilling and Lindbergh production techniques Lloydminster Tangleflags • Ramp-up of Kerro
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Lloydminster Peace River Horizontal Multi-Lateral Horizontal 25
Slide 26: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • 232 sections of 100% WI lands • Nine wells drilled to date have delineated a minimum of 100- 125 sections • Produced 1,500 boe/d (79% liquids) in Q3/2020 • Two wells on-stream in 2019 Black Oil generated average 30-day IP rat
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River (1) Lloydminster (1) Pembina Duvernay Formation Lower Eagle Ford Viking Bluesky Mannville Group Duvernay Upper Eagle Ford Austin Chalk Depth (metres) 3,300-3,900 700 600 350-800 2,200-2,400 Oil API Oil: 40-45° 36° 11° 10-16° 42-44° Condensat
Slide 28: Corporate Sustainability
Corporate Sustainability
Slide 29: Corporate Sustainability
Corporate Sustainability At Baytex, we believe that commitment to corporate responsibility is just as important as delivering financial and operational targets. We publish a biennial Corporate Sustainability Report which provides transparent reporting and clear goals on the topics that matter: Safet
Slide 30: GHG Emissions Reduction
GHG Emissions Reduction Target to reduce GHG emission intensity (tonnes of CO2 per boe) by 30% by 2021. GHG Intensity Target 0.120 30% reduction Our emissions reduction strategy Tonnes of CO2 per boe from baseline includes: 0.080 • Increased gas conservation • Reusing associated gas as fuel 0.040 fo
Slide 31: A Culture of Commitment
A Culture of Commitment How it contributes to Objective What we’ve done Result value creation Ensure our employees and 42% reduction in corporate spill ENVIRONMENT Reduces costs and maintains Responsibly develop contractors uphold our procedures volumes, over 5 years social license our assets for sp
Slide 32: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP.
Slide 33: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2018 Q2 2018 Q3 2018 Q4 2018 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Benchmark Prices WTI crude oil (US$/bbl) $62.87 $67.88 $69.50 $58.81 $64.77 $54.90 $59.81 $56.45 $56.96 $57.03 $46.17 $27.85 $40.93 NYMEX natural gas (US$/mcf)
Slide 34: Reserves Summary (Gross)
Reserves Summary (Gross) 2P Reserves Breakdown 2P Reserves by Asset 2P Reserves by Commodity Pembina Other Duvernay Natural Gas PDP Heavy Eagle Probable Ford Oil Light Oil Heavy + NGL Oil PDNP + PUD Viking Pembina Category (1) Eagle Ford Viking Heavy Oil Other Total Duvernay Proved Developed Produci
Slide 35: 2021 Guidance and Cost Assumptions
2021 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $225 - $275 Production (boe/d) 73,000 – 77,000 Expenses: Royalty rate (%) 18% - 18.5% Operating ($/boe) $11.50 - $12.25 Transportation ($/boe) $1.00 - $1.10 General and administrative ($ millions) $42 ($1.53/boe
Slide 36: Contact Information
Contact Information Baytex Energy Corp. Edward D. LaFehr President and Chief Executive Officer Suite 2800, Centennial Place 587.952.3000 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 Rodney D. Gray T 587.952.3000 Executive Vice President and Chief Financial Officer Toll Free 1.800.524.5521 587.952.
Baytex Energy — Investor Presentation (December 2020) on 6ix