Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (December 2023)
40 slides from Baytex Energy's investor presentation, December 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION CREATING ENERGY | CREATING VALUE December 2023
Slide 2: Advisory
ADVISORY In this presentation, we refer to certain specified financial measures which do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”). While these measures are commonly used in the oil and natural gas industry, our determination of these measur
Slide 3: A Diversified North American E&P Operator
A DIVERSIFIED NORTH AMERICAN E&P OPERATOR Market Summary Ticker Symbol TSX, NYSE | BTE Average Daily Volume (1) Canada: 9.7 million | US: 9.3 million Shares Outstanding 823 million Market Capitalization / Enterprise Value (2) $4.3 billion / $7.1 billion Annual Dividend per Share | Dividend Yield (3)
Slide 4: Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns
INVESTMENT HIGHLIGHTS Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns High-quality and diversified oil portfolio with more than 10 years of drilling inventory Disciplined Track record of new discoveries Reinvestment and Targeting modest single-digit organi
Slide 5: YTD 2023 Highlights
YTD 2023 HIGHLIGHTS Demonstrating the strength of our diversified North American oil-weighted portfolio Strong operating capability with increased scale in the Eagle Ford Ranger Acquisition Increased exposure to premium light oil U.S. Gulf Coast pricing 12-15 years of sustaining development with att
Slide 6: Creating Shareholder Value
CREATING SHAREHOLDER VALUE Delivering production per share growth while improving financial leverage Production (boe/d) per thousand shares Total debt(1) to EBITDA(1) 0.20 4.5x 0.19 4.0x 0.18 20% increase from Q4/2022 3.5x Q4/2023E leverage ratio(2) of ~ 1.1x; 0.17 52% increase from Q4/2020 committe
Slide 7: Highly Economic Portfolio
HIGHLY ECONOMIC PORTFOLIO Strong drilling economics across portfolio Portfolio at US$75 WTI (1)(2) Well Payouts < 18 Months IRRs > 50% Eagle Ford Karnes Trough U.S. Light Oil Eagle Ford Operated Duvernay Canada Light Oil Viking Peavine (Clearwater) Canada Heavy Oil Peace River (Bluesky) Lloydminster
Slide 8: 2024 Outlook
2024 OUTLOOK Disciplined 153,000 boe/d 2024 mid-point production Reinvestment and Capital Allocation 2024 Guidance E&D Expenditures $1.2 - $1.3 billion Execute an exploration and development Production 150,000 - 156,000 boe/d program of $1.2 to $1.3 billion Oil and NGLs 84% 2024 priorities: Deliver
Slide 9: 2024 Return of Capital
2024 RETURN OF CAPITAL Return 50% of free cash flow(1) to shareholders Free Cash Flow Priorities Return of Capital and Strengthening Balance Sheet 2024 Free Cash Flow(1) Sensitivity(2) $1,400 Share Buybacks $1,200 Share count reduced by 4.5% since June 2023 $1,000 $800 $MM $600 Base Dividend $400 Qu
Slide 10: Five-Year Outlook (2024–2028)
FIVE-YEAR OUTLOOK (2024 – 2028) at US$70/bbl WTI Sustainable plan(1) delivers significant value 1-4% annual ~ 60% annual production growth reinvestment rate(3) Underpinned by strong drilling economics Annual capital spending of $1.2 to $1.4 billion and > 10 years drilling inventory drives meaningful
Slide 11: Five-Year Outlook: Shareholder Returns
FIVE-YEAR OUTLOOK: 2024 - 2028 Shareholder Returns(1) Compelling Returns Profile Underpinned by disciplined reinvestment and capital allocation Free Cash Flow(1)(2) over Five-Year Outlook ($ millions) Return of Capital(2) over Five-Year Outlook(1) ($ millions) $7,000 $4,500 $4,000 $6,000 $3,500 Incl
Slide 12: Crude Oil Hedge Portfolio
CRUDE OIL HEDGE PORTFOLIO Balanced Approach to Risk Management Target 40% of 50,000 Hedged Volumes (bbl/d) ~ 40% ~ 40% ~ 40% Net Crude Oil 40,000 30,000 ~ 30% Volumes(1) 20,000 ~ 20% 10,000 0 Disciplined hedge program to help mitigate Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 volatility in revenue due
Slide 13: Maintaining Financial Strength
MAINTAINING FINANCIAL STRENGTH Commitment to a Strong Balance Sheet Total Debt (1) (September 30, 2023) $ millions Credit facilities (2) $1,047 $1.5 billion Long-term notes 8.75% notes due April 1, 2027 $555 total debt(1) 8.50% notes due April 1, 2030 Total long-term notes $1,083 $1,638 target Total
Slide 14: Adjusted Funds Flow Sensitivities
ADJUSTED FUNDS FLOW SENSITIVITIES Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Change of US$5.00/bbl WTI crude oil $213 Change of US$1.00/bbl WCS heavy oil differential $15 Change of US$0.50/MMbtu NYMEX natural gas $19 Change of $0.01 in the C$/US$ exchange rate $18 (1) Capi
Slide 15: Asset Overview
ASSET OVERVIEW w ro = BAYTEXENERGY.COM ,
Slide 16: Business Unit Highlights
BUSINESS UNIT HIGHLIGHTS w Light Oil – Canada Heavy Oil – Canada Light Oil – USA (Eagle Ford) (Viking/Duvernay) (Peace River/Peavine/ Lloydminster) Production (2024E) ~ 92,000 boe/d ~ 17,000 boe/d ~ 40,000 boe/d % Liquids 81% 84% 95% Land (net acres) 182,000 440,000 710,000 2P Reserves (Gross) (1) 4
Slide 17: U.S. Light Oil: Eagle Ford
U.S. LIGHT OIL: EAGLE FORD Strong Operating Capability Materially Increased Scale in a Premier Basin LEE BASTROP FAYETTE 92,000 CALDWELL boe/d Pro Forma production GUADALUPE Eagle Ford Pro Forma OPERATED GONZALES LAVACA 267,112 gross acres, 68% average working interest, 70% operated Bloodstone 2 wel
Slide 18: U.S. Light Oil: Operated Eagle Ford Strong Q3 Results
U.S. LIGHT OIL: OPERATED EAGLE FORD Strong Q3 Results Q3 2023 Wells Onstream 30-day Peak % Crude Oil and Well Onstream Date Rate (boe/d) NGLs 13 operated wells onstream Douglas Fir A 1H Douglas Fir B 2H July 14 July 14 924 781 95% 96% Halley A 1H July 24 960 94% Strong results across thermal Hawn Ho
Slide 19: Canada Light Oil: Pembina Duvernay / Viking
CANADA LIGHT OIL: PEMBINA DUVERNAY / VIKING High netback light oil with strong asset level free cash flow(1) Pembina Duvernay Shale is a potential growth asset in the Canadian portfolio Pembina Duvernay Viking 176 net sections 512 net sections Demonstration-stage light oil resource play Stable produ
Slide 20: Canada Heavy Oil: Peace River / Peavine / Lloydminster
CANADA HEAVY OIL: PEACE RIVER / PEAVINE / LLOYDMINSTER Innovative Multi-Lateral Drilling and Top-Tier Efficiencies Clearwater at Peavine Delivers Exceptional Well Performance and Economics Peace River (Bluesky) PEACE RIVER 514 net sections Produced 11,800 boe/d in Q3/2023 (83% oil) Expect to bring 9
Slide 21: Canada Heavy Oil: Land Extensions
CANADA HEAVY OIL: LAND EXTENSIONS Leveraging heavy oil expertise and recent exploration success Peavine (Clearwater) Lloydminster (Mannville) Partnership with the Peavine Métis Settlement Farm-in agreement on 17.75 sections of land near Cold Lake New 10-section agreement brings total land position t
Slide 22: Business Unit and Asset-Level Well Economics
BUSINESS UNIT AND ASSET-LEVEL WELL ECONOMICS Business Unit / IP365 (boe/d) EUR Mboe Well Cost Payout IRR (%) (3)(4) Assets(1) (Liquids %) (Liquids %) ($MM) (2) (Months) (3)(4) U.S. Light Oil Operated Eagle Ford 585 (88%) 655 (87%) $12.0 75% 16 Karnes Trough Eagle Ford 590 (76%) 635 (74%) $8.2 95% 12
Slide 23: Environment, Social and Governance (ESG)
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
Slide 24: ESG at Baytex
ESG AT BAYTEX As a responsible energy company, we take a sustainable approach to managing, developing and improving our business into the future. We aspire to create an organization and business that our teams are proud to be a part of, and future generations will appreciate. BAYT E X ENERG Y / NYSE
Slide 25: ESG Highlights
ESG HIGHLIGHTS Our vision is to be a leader in the responsible production of energy the world needs for the future GHG Emission Reduction Safety 59% reduction in GHG emissions 17% reduction in total recordable intensity through 2022, relative to injury frequency in 5 years 2018 baseline; 65% target
Slide 26: Our ESG Scorecard
OUR ESG SCORECARD Continual improvement is an important element of our culture. We set short and long-term targets to address our impact on air, water, land, and people BAYT E X ENERG Y / NYSE / T SX BT E 26
Slide 27: Supplementary Information
SUPPLEMENTARY INFORMATION BAYTEXENERGY.COM
Slide 28: Board of Directors
BOARD OF DIRECTORS Efficient and Independent Board Complementary Skills Suited to Govern the Combined Business Eric T. Greager Mark R. Bly President and Chair of the CEO Board Tiffany (“T.J.”) Trudy M. Don G. Angela Jennifer A. Dave L. Steve D.L. Jeffrey E. Cepak Curran Hrap Lekatsas Maki Pearce Rey
Slide 29: Free Cash Flow Allocation Policy
FREE CASH FLOW ALLOCATION POLICY Direct shareholder returns at 50% of free cash flow(1) Total Debt(2) Above $1.5 billion Total Debt(2) Below $1.5 billion Adjusted Funds Flow (3) Less: Exploration and Development Expenditures Less: Abandonment and Reclamation / Leasing Expenditures Shareholder return
Slide 30: Summary of Operating and Financial Metrics
SUMMARY OF OPERATING AND FINANCIAL METRICS Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Benchmark Prices WTI crude oil (US$/bbl) $94.29 $108.41 $91.56 $82.64 $94.23 $76.13 $73.78 $82.26 NYMEX natural gas (US$/mmbtu) $4.95 $7.17 $8.20 $6.26 $6.64 $3.42 $2.10 $2.55 Production Crude oil
Slide 31: 2024 Guidance and Cost Assumptions
2024 GUIDANCE AND COST ASSUMPTIONS Exploration and development expenditures ($ billions) $1.2 - $1.3 Production (boe/d) 150,000 - 156,000 Expenses: Average royalty rate (%) (1) ~ 23% Operating ($/boe) (2) $11.25 - $12.00 Transportation ($/boe) (2) $2.35 - $2.55 General and administrative ($ millions
Slide 32: Forward Looking Statements Advisory
FORWARD LOOKING STATEMENTS ADVISORY In the interest of providing the shareholders of Baytex and potential investors with information regarding Baytex, including management's assessment of future plans and operations, certain statements in this presentation are "forward-looking statements" within the
Slide 33: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) These forward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and differentials between light, medium and heavy oil prices; well production rates and reserve volumes; our ability to ad
Slide 34: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) Financial Outlook Advisory This presentation contains information that may be considered a financial outlook under applicable securities laws about Baytex's potential financial position, including, but not limited to, estimated EBITDA, exploration and deve
Slide 35: Specified Financial Measures Advisory
SPECIFIED FINANCIAL MEASURES ADVISORY In this presentation, we refer to certain specified financial measures which do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”). While these measures are commonly used in the oil and natural gas industry, our
Slide 36: Capital Management Measures Advisory
CAPITAL MANAGEMENT MEASURES ADVISORY This presentation contains the terms "adjusted funds flow“ and "net debt”, which are capital management measures. We believe that the inclusion of these capital management measures provides useful information to financial statement users when evaluating the finan
Slide 37: Advisory Regarding Oil and Gas Information
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 determination of oil and
Slide 38: Advisory Regarding Oil and Gas Information (Cont.)
ADVISORY REGARDING OIL AND GAS INFORMATION (CONT.) References herein to average 30-day initial production rates and other short-term production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence produc
Slide 39: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 39
Slide 40: Contact Information
CONTACT INFORMATION BAYTEX ENERGY CORP. Suite 2800, Centennial Place 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 TF 1.800.524.5521 Eric T. Greager President and Chief Executive Officer Chad L. Kalmakoff Chief Financial Officer Chad E. Lundberg Chief Operating Officer Brian G. Ector Senior Vice Pr
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