Baytex Energy Corp. · TSX:BTE
Baytex Energy — Merger or Acquisition (February 2014)
20 slides from Baytex Energy's merger presentation, Feb 6, 2014
Slide 1: Strategic Acquisition of Aurora Oil & Gas
James Bowzer, President and CEO February 2014 Derek Aylesworth, Chief Financial Officer Brian Ector, Vice President, Investor Relations A preliminary short form prospectus containing important information relating to the securities of Baytex Energy Corp. (the "Company") described in this presentatio
Slide 2: Advisory and Forward-Looking Statements
Advisory The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis and reviews of the Company and of the information contained in this pr
Slide 3: Forward-Looking Statements (continued)
Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: the Acquisition may not be completed on the terms contemplated or at al
Slide 4: Financial Measures
Financial Measures This presentation refers to funds from operations, which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP"). We define funds from operations as cash flow from operating activities adjusted for financing costs, changes i
Slide 5: Baytex has entered into an agreement to acquire Aurora Oil & Gas
5 Baytex has entered into an agreement to acquire Aurora Oil & Gas Aurora is listed on the Toronto and Australia Stock Exchanges (TSX: AET, ASX: AUT) Acquisition to be completed by way of a Scheme of Arrangement under Australian law Cash offer price of AU$4.10 per share Total transaction value of C$
Slide 6: Strategic Rationale
6 Strategic Rationale Exposure to World Class Oil Resource Play Diversifies asset base into the core of the liquids-rich Eagle Ford, one of the premier oil resource plays in the U.S. On closing of the acquisition, Baytex’s three key oil resource plays – the Peace River Oil Sands, Lloydminster heavy
Slide 7: Aurora Acquisition Metrics
7 Aurora Acquisition Metrics AUD CAD Aurora Share Price (CAD/AUD = $0.9744) $4.10 $4.00 Shares Outstanding (fully diluted) 458.6 Market Capitalization ($ millions) $1,832 Net Debt ($ millions) $744 Enterprise Value ($ millions) $2,576 Gross Reserves (MMboe) Proved (1) 106.7 Proved + Probable (1) 166
Slide 8: Baytex 2014E Pro Forma Production and FFO
8 Baytex 2014E Pro Forma Production and FFO Baytex Pro Forma Production (Mboe/d) 61 88-90 Funds from Operations (C$ billions) $0.7 $1.0-$1.1 Average Shares Outstanding (millions) 127 162 FFO per Share (C$ undiluted) $5.50 $6.45 FFO Accretion 17% Operating Netback (C$/boe) $35.60 $37.90 % Change in O
Slide 9: Baytex Pro Forma Liquidity
9 Baytex Pro Forma Liquidity ($B) Equity Issue Size (1) Coupon Principal Due C$1.3B C$1.5B (2) Long Term Notes: Baytex Series B Debentures (US$) 6.750% Feb-2021 $0.2 $0.2 Baytex Series C Debentures (C$) 6.625% Jul-2022 $0.3 $0.3 Aurora Debentures (US$) 9.875% Feb-2017 $0.4 $0.4 Aurora Debentures (US
Slide 10: Pro Forma Production and Reserves
10 Pro Forma Production and Reserves (1) Baytex Stand-Alone Baytex Pro Forma Aurora Production (2014E) = 61 mboe/d Proved + Probable Reserves (YE 2012) = 292 MMboe Combined Production (2014E) = 88-90 mboe/d Total Proved + Probable Reserves = 458 MMboe (1) Baytex pro forma reserves reflect Baytex res
Slide 11: Material Production and High Quality Reserve Base
11 Material Production and High Quality Reserve Base Substantial inventory of potential well locations to support future production growth Reserve upside exists through additional horizons in the Austin Chalk and Upper Eagle Ford formations, downspacing and improving completion techniques Attractive
Slide 12: Increasing Development Performance and Recovery
12 Increasing Development Performance and Recovery A subsidiary of Marathon Oil Corporation is the operator of the majority of Aurora’s Eagle Ford position Continuous improvements in drilling completion design have increased 30-day IP rates by approximately 45% since Q4/2011 with 180-day cumulative
Slide 13: Eagle Ford Acreage Position
13 Eagle Ford Acreage Position Baytex is acquiring 22,200 net contiguous acres in the prolific Sugarkane Field located in south Texas in the core of the liquids-rich Eagle Ford shale. The acquisition provides exposure to low-risk, repeatable, high-return assets with leading capital efficiencies. The
Slide 14: Aurora's acreage is amongst top operators
Aurora’s acreage is amongst top operators including COP, MRO, EOG and MUR 14 Source: Drillinginfo, Scotiabank. EUR = expected ultimate recovery. Acreage Position Amongst Top Operators Eagle Ford Acreage – Sweet Spot of a World-Class Play Eagle Ford Sweet Spot EUR Map EURs exceed 500,000 barrels of o
Slide 15: Eagle Ford – Opportunity Summary
Current Development 80,200 highly contiguous gross acres (22,200 net acres) in the most prolific area of the Eagle Ford Lower Eagle Ford originally developed at 80-acre spacing; current development is now 60-acre spacing (volatile oil) and 40-acre spacing (condensate gas) Aurora has budgeted 49 – 53
Slide 16: Attractive Well Economics
Attractive Well Economics Condensate Completed Well Cost US$7.8M Production (30-day IP) 800-1,000 boe/d % Liquids 89% Capital Efficiency (1) US$8,700 per boe/d IRR (before tax) (2) ~ 100% Volatile Oil Completed Well Cost US$7.3M Production (30-day IP) 900-1,000 boe/d % Liquids 72% Capital Efficiency
Slide 17: Baytex Pro Forma – Three Key Oil Resource Plays
Baytex Pro Forma – Three Key Oil Resource Plays Single Well Economics (excluding acreage acquisition costs) (1) Eagle Ford Peace River Heavy Oil Lloydminster Heavy Oil Condensate Volatile Oil Multi-Laterals Verticals Horizontals Completed Well Cost US$7.3M US$7.8M C$2.6M – C$3.4M C$450,000 C$950,000
Slide 18: Baytex is acquiring premier acreage in the core of the Eagle Ford
18 Baytex is acquiring premier acreage in the core of the Eagle Ford – one of the leading shale oil plays in the U.S. The assets to be acquired are an excellent fit with our business model and positions Baytex in another world-class oil resource play Provides Baytex shareholders with exposure to a l
Slide 19: Scheme of Arrangement Summary
Scheme of Arrangement Summary Key Dates (1) February 6 Day 1 Implementation Agreement executed March 6 Day 29 Scheme of Arrangement documents drafted and finalised March 28 Day 51 First Court hearing April 3 Day 57 Dispatch Explanatory Statement containing materials relevant to shareholders’ decisio
Slide 20: Contact Information
James L. Bowzer President & Chief Executive Officer (587) 952-3000 W. Derek Aylesworth Chief Financial Officer (587) 952-3120 Brian Ector Vice President, Investor Relations (587) 952-3237 Suite 2800, Centennial Place 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 T: (587) 952-3000 1-800-524-5521 www
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