Baytex Energy Corp. · TSX:BTE

Baytex Energy — Investor Presentation (October 2017)

28 slides from Baytex Energy's investor presentation, October 2017

  1. Slide 1: October Presentation

    October Presentation

  2. Slide 2: Advisory: Forward-Looking Statements

    Advisory Forward-Looking Statements In the interest of providing Baytex's shareholders and potential investors with information regarding Baytex, including management's assessment of Baytex's future plans and operations, certain statements made by the presenter and contained in these presentation ma

  3. Slide 3: Advisory (Cont.)

    Advisory (Cont.) Readers are cautioned that the foregoing list of risk factors is not exhaustive. New risk factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to w

  4. Slide 4: Advisory (Cont.): Non-GAAP Financial Measures

    Advisory (Cont.) Non-GAAP Financial Measures This presentation refers to funds from operations, net debt, free cash flow, sustaining capital, operating netback and Bank EBITDA, which do not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP"). We de

  5. Slide 5: Strategy to Sustain and Position Baytex for Growth

    Strategy to Sustain and Position Baytex for Growth  2/3 undrawn on US$575  Eagle Ford well costs in million credit facility H1/2017 below budget at  First meaningful long-term US$4.7-$4.9 million note maturity not until 2021  Operating expense  Expect stable liquidity guidance for 2017 position

  6. Slide 6: Corporate Profile

    Corporate Profile Market Summary Ticker Symbol TSX / NYSE: BTE Average Daily Volume (1) CAN: 4,100,000 / US: 1,300,000 Shares Outstanding 235.5 million Market Capitalization / Enterprise Value $0.9 billion / $2.7 billion Net Debt (2) $1.8 billion Corporate Summary Production (3) 69,000 - 70,000 boe/

  7. Slide 7: Capital Deployment Opportunities

    Capital Deployment Opportunities Texas 34% Eagle Ford Texas 34% Peace River Heavy Oil  First call on capital  Strategic Light Oil $65 51% million acquisition 22% adds 3,000  Represents ~ 70% of boe/d of production 2017 budgeted E&D spending  Drilled two of the top oil wells in Alberta in  Curre

  8. Slide 8: H1/2017 Results Demonstrate Growth at US$50/bbl

    H1/2017 Results Demonstrate Growth at US$50/bbl 2017 Production Growth  Production growth of 12% from 80,000 Q4/2016 70,000 o 15% Eagle Ford; 8% Canada 60,000 50,000  FFO of $165 million in H1/2017 Boe/d 40,000 Canada  Operational Momentum 30,000 U.S. 20,000 o Increased pace of development 10,000

  9. Slide 9: 2017 Free Cash Flow Scenarios

    2017 Free Cash Flow Scenarios Significant Free Cash Flow Potential  Demonstrating sustaining capital efficiencies of $13,000 Flexibility to invest in per boe/d $200 organic growth and/or debt repayment  Sustaining capital expenditures $ Millions $100 of ~ $300 million per year $0  Free cash flow

  10. Slide 10: Crude Oil Hedge Portfolio

    Crude Oil Hedge Portfolio Q3/17 Q4/17 H2/2017 2018 WTI Fixed Hedges Volumes (bbl/d) 3,500 3,500 3,500 6,500 Fixed Price (US$/bbl) $54.46 $54.46 $54.46 $51.18 WTI 3-Way Option Volumes (bbl/d) 14,500 14,500 14,500 2,000 Average Ceiling/Floor/Sold Floor (US$/bbl)(2) $59/$47/$37 $59/$47/$37 $59/$47/$37

  11. Slide 11: Balance Sheet / Debt Composition

    Balance Sheet / Debt Composition Significant Liquidity, No Near-Term Maturities and Financial Covenant Flexibility 0.7x Senior Secured Debt (1) to Bank EBITDA (2) (maximum 5.0x through March 2018) 4.0x Interest Coverage (3) (minimum 1.25x through March 2018) Debt Composition(4) and Unutilized Capaci

  12. Slide 12: Strong Rates of Return Across Portfolio

    Strong Rates of Return Across Portfolio 175% 150% Internal Rate of Return (3) 125% Break-Even WTI (4) 100% 75% Eagle Ford - US$5.0M/well 50% Peace River - C$2.5M/well 25% Lloydminster - C$700K/well 0% $45 $50 $55 $60 $65 $70 WTI (US$/bbl) (1) Individual well economics are based on constant pricing a

  13. Slide 13: Individual Well Economics – Sensitivity to WTI

    Individual Well Economics – Sensitivity to WTI IRR (3) NPV (C$000s) – 10% discount rate Eagle Ford Peace River Lloydminster Eagle Ford Peace River Lloydminster US$45 58% 25% 35% US$45 $5,943 $716 $262 US$50 76% 50% 67% US$50 $7,502 $1,611 $581 US$55 96% 79% 105% US$55 $9,061 $2,459 $900 US$60 120% 1

  14. Slide 14: The Eagle Ford

    BAYTEX The Eagle Ford

  15. Slide 15: Improved Performance and Growth in the Eagle Ford

    Improved Performance and Growth in the Eagle Ford Performance Drivers  Production up 15% from Q4/2016 to 38,500 boe/d  Improved performance from higher intensity frac’s in the northern oil window  Steady 4-5 drilling rigs and 1-2 completion crews (68 gross wells onstream in H1/2017)  DC&E costs

  16. Slide 16: Eagle Ford Improved Performance

    Eagle Ford Improved Performance  Most recent Karnes City pads (11 Production (30-day IP) wells) delivered 30-day IP rates of 2,150 boe/d per well  Improvements in drilling and completion design have increased 30-day IP rates by > 100% since 2011 o Average lateral length ~ 5,700 feet o Effective #

  17. Slide 17: Eagle Ford Q2/2017 Well Performance

    Eagle Ford Q2/2017 Well Performance Karnes City NW 5 well oil pad Kimble Gilley LEF (2) / UEF (3) 4 well oil pad Avg 30 day IP: 2,152 boe/d LEF (2) / UEF (2) Best Well: 2,601 boe/d Avg 30 day IP: 992 boe/d Best Well: 1,231 boe/d Karnes City SE 4 well oil pad Chapman Rothe LEF (4) 5 well oil pad Avg

  18. Slide 18: Heavy Oil Overview

    BAYTEX ENERGY CORP.

  19. Slide 19: Peace River: Driving Production Growth and Cost Reductions

     Peace River: Driving Production Growth and Cost Reductions Performance Drivers  Peace River production up 22% from Q4/2016 to 18,300 boe/d  Acquired properties producing ~ 3,500 boe/d, up 17% due to well workovers and production optimization  Drilled 7 wells (5 on production) with average 30- d

  20. Slide 20: Multi-Lateral Horizontal Wells

     Multi-Lateral Horizontal Wells Reservoir Characteristics (1) Formation Bluesky Depth ~ 600 metres Completion Open Hole Oil Quality 11 °API Average Porosity 28% Permeability 1 - 5 darcies Oil Saturation 70% Recovery Factor 5 - 7% (1) Baytex internal estimates. 20

  21. Slide 21: Significant Land Position and Drilling Inventory

    Lloydminster: Heavy Oil  Significant Land Position and Drilling Inventory Multi-Lateral Drilling  Applying multi-lateral horizontal drilling and production techniques from Peace River  25% improvement in individual well capital efficiencies compared to single-lateral horizontal wells H1/2017 Dril

  22. Slide 22: Lloydminster Development

    Lloydminster Development  Increased Multi-Lateral Drilling at Lloydminster is Leading to a 25% Improvement in Capital Efficiencies Reservoir Characteristics (1) Formation Mannville Group Depth 350 – 800 metres Completion Horizontal Slotted Liner / Vertical Stacked Pays Oil Quality 10 – 16 °API Aver

  23. Slide 23: Summary

    Summary  Demonstrated Growth at US$50/bbl o Production of 72,500 boe/d in Q2/2017, up 12% from Q4/2016 o Eagle Ford - 38,500 boe/d in Q2/2017, up 15% from Q4/2016 o Canada - 34,000 boe/d in Q2/2017, up 8% from Q4/2016  Performance Drivers o Increased pace of development and strong drilling results

  24. Slide 24: Supplementary Information

    - Tat Supplementary Information enero

  25. Slide 25: Funds from Operations Sensitivities

    Funds from Operations Sensitivities Estimated Effect on Annual Funds from Operations ($ Millions) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $18.6 $16.9 Change of US$1.00/bbl WCS heavy oil differential $10.1 $7.0 Change of US$0.25/mcf NYMEX natural gas $7.5 $

  26. Slide 26: Natural Gas Hedge Portfolio

    Natural Gas Hedge Portfolio Q3/17 Q4/17 H2/17 2018 AECO Fixed Hedges Volumes (GJl/day) 22,500 22,500 22,500 5,000 Price (C$/GJ) $2.85 $2.85 $2.85 $2.67 NYMEX Fixed Hedges Volumes (mmbtu/d) 22,500 22,500 22,500 7,500 Price (US$/mmbtu) $2.98 $2.98 $2.98 $3.00 Total Hedge Volume (mmbtu/d) 43,826 43,826

  27. Slide 27: Capital Program Efficiency

    Capital Program Efficiency 3-Year 2014 2015 2016 Total / Average 2014-16 Capital Expenditures ($millions) Exploration and development 766.1 521.0 224.8 1511.9 Acquisitions (net of dispositions) 2,545.1 1.6 (63.6) 2483.1 Total 3,311.2 522.7 161.2 3995.0 Proved plus Probable Reserve Additions (mboe) E

  28. Slide 28: Contact Information

    Contact Information Edward D. LaFehr President and Chief Executive Officer (587) 952-3000 Suite 2800, Centennial Place Rodney D. Gray 520 – 3rd Avenue S.W. Chief Financial Officer Calgary, Alberta T2P 0R3 (587) 952-3160 T: (587) 952-3000 1-800-524-5521 www.baytexenergy.com Brian G. Ector Senior Vice

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