Baytex Energy Corp. · TSX:BTE
Baytex Energy — National Bank Financial Energy Tour – Clearwater Focus (September 2022)
48 slides from Baytex Energy's conference presentation, Sep 29, 2022
Slide 1: National Bank Financial Energy Tour – Clearwater Focus
National Bank Financial Energy Tour – Clearwater Focus Chad Lundberg, Chief Operating and Sustainability Officer Kendall Arthur, Vice President, Heavy Oil Brian Ector, Vice President, Capital Markets Dallas, Texas September 29, 2022
Slide 2: Advisory
Advisory In this presentation, w e refer to certain specified financial and capital management measures w hich 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 det
Slide 3: Investment Highlights
Investment Highlights ▪ ~ 10 or more years of projected drilling inventory in each of our High Quality and core areas (Viking, Eagle Ford and Canadian heavy oil) Diversified Oil Portfolio ▪ Strong capital efficiencies across portfolio ▪ > 125 net prospective sections in one of the most profitable pl
Slide 4: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE (1) Average Daily Volume 11 million Shares Outstanding (2) 560 million (2) Market Capitalization / Enterprise Value $3.8 billion / $4.9 billion Operating Statistics Production (Gross W.I.) (3) 83,000 – 85,000 boe/d Production Mix (3) 83% liquid
Slide 5: Clearwater Focus
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Slide 6: Clearwater Highlights
Clearwater Highlights ▪ > 500 sections in the NW Clearwater fairway with > 125 sections highly prospective for Spirit River (Clearwater equivalent) Significand Land Base ▪ Executed two strategic agreements with the Peavine Métis Settlement that cover 80 premium sections of land ▪ Production increase
Slide 7: Peace River Area Map
Peace River Area Map Harmon Valley Seal Peace River Reno Peavine Baytex Lands 7
Slide 8: Peavine – Clearwater Reservoir Overview
Peavine – Clearwater Reservoir Overview Golden Evi Harmon Seal Godin Desmarais Reno Peavine Gift Nipisi Pelican ~ 19,000 bopd Marten Hills ~40,000 bopd Canal Simplified Productive Area Reservoir Characteristics Harm on Valley Peavine Nipisi ▪ Lower Cretaceous Spirit River formation (Falher E) Bluesk
Slide 9: Peavine – 2021/2022 Development Summary
Peavine – 2021/2022 Development Summary 2021 Program - 8 Hz’s 2022 Program – 23 HZ’s ▪ 1 Rig, partial year drilling with Horizon 14 ▪ 1.5 Rigs, Horizon 14 (FY) & Horizon 22 (Q1): 10 Hz’s Q1, 13 Hz’s H2 o 3 New pads w ith Pilot Strats (5-33, 14-36, 14-2) o 2 New pads w ith Pilot Strats (4-25, 13-25)
Slide 10: Clearwater: H1/2022 Program Accelerates Development
Clearwater: H1/2022 Program Accelerates Development Peavine 5-33 Pad 14-36 Pad 5-33 Pad 13-25 Pad • Q1/2022 – 4 new wells onstream in March/April, with IP30’s of 300-450 bbl/d per well • June production ~ 2,200 bbl/d with 8 4-25 Pad wells • 2 additional wells H2/2022 4-25 Pad • Q1/2022 – 6 ERH wells
Slide 11: Clearwater: Superior Well Performance and Economics
Clearwater: Superior Well Performance and Economics Clearwater Lands Top 15 Clearwater Wells (1) • > 500 net sections in the NW Clearwater fairway with > 125 prospective for Spirit River Peak Calendar Rate (Clearwater equivalent) No. UWI Current Operator (bbl/day) • Executed two strategic land agree
Slide 12: Corporate Presentation
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Slide 13: H1 2022 Highlights
H1 2022 Highlights Strong Peavine Drilling Results, Increased Guidance and Share Buyback Program Initiated H1/2022 Highlights ▪ Generated production of 82,000 boe/d, a 3% increase over H1/2021 H1 2022 Highlights ▪ Generated free cash flow(1) of $367 million ($0.65 per basic share) ▪ Reduced net debt
Slide 14: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 52% reduction in GHG 25% reduction in total emissions intensity through recordable injury frequency in 2021, relative to 2018 5 years baseline; 65% target in place Gas Conservation Indigenous Relations > 95% routine gas Recent agreements with conservation
Slide 15: Maintaining Capital Discipline and Driving Meaningful Free Cash Flow
Maintaining Capital Discipline and Driving Meaningful Free Cash Flow ▪ Production guidance of 83,000 to 85,000 2022 Guidance boe/d represents: E&D Expenditures $450 – 500 million ▪ 5% annual production growth at the Production 83,000 - 85,000 boe/d mid-point (6% on a per-share Oil and NGLs 83% basis
Slide 16: Uses of Free Cash Flow
Uses of Free Cash Flow Direct shareholder returns ▪ Current allocation of free cash flow Allocation of Free Cash Flow ▪ 25% to share buybacks ▪ 75% to debt repayment 100% ▪ Share buybacks commenced May 2022 Share Buybacks ▪ Repurchased 17.8 million shares through August 2022, 3.1% of float 75% Share
Slide 17: 2023 Free Cash Flow Generation and Shareholder Return Potential
2023 Free Cash Flow Generation and Shareholder Return Potential 2023 Free Cash Flow ($ millions) (1)(3) Target 50% of Free Cash Flow (1)(2) 26% to Share Buybacks Yield $1,800 20% Yield $1,600 14% Yield $1,400 $1,000 Buybacks $775 $1,200 $550 Buybacks FCF C$ millions Buybacks $1,000 FCF FCF Debt US$7
Slide 18: Committed to Maintaining Strong Financial Flexibility
Committed to Maintaining Strong Financial Flexibility Net Debt(1) (June 30, 2022) $ millions • Strong liquidity Credit facilities (2) $497 • Credit facilities extended to 2026 Long-term notes $644 and increased to US$850 million Long-term debt $1,141 • Redeemed US$200 million long- Working Capital (
Slide 19: 5-Year Plan Generates $2.8 Billion Cumulative Free Cash Flow
5-Year Plan Generates $2.8 billion Cumulative Free Cash Flow Free Cash Flow (1) Profile (after-tax) Highlights of 5-Year Plan $3,000 Cumulative Free Cash Flow ($ millions) $2,500 • $2.8 billion cumulative free cash flow(1) $2,000 • Exploration and development expenditures represent ~ 50% of $1,500 a
Slide 20: 5-Year Plan – Free Cash Flow Profile
5-Year Plan – Free Cash Flow Profile (after-tax) US$75 WTI US$85 WTI US$95 WTI ~ $2.8 Billion ~ $3.6 Billion ~ $4.2 Billion Cumulative FCF (1) Cumulative FCF (1) Cumulative FCF (1) $1,000 0.8x $900 0.7x $800 Net Debt to EBITDA ratio 0.6x Free Cash Flow ($ millions) $700 0.5x $600 $500 0.4x $400 0.3x
Slide 21: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Q3/2022 Q4/2022 H2/2022 2023 WTI Fixed Hedges Volumes (bbl/d) 10,000 10,000 10,000 --- Fixed Price (US$/bbl) $53.50 $53.50 $53.50 --- WTI 3-Way Option (1) Volumes (bbl/d) 10,500 10,500 10,500 9,500 Average Sold Put / Put / Sold Call (US$/bbl) $48/$58/68 $48/$58$68 $48/$58/$
Slide 22: 2022E Adjusted Funds Flow Sensitivities
2022E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $24.1 $15.1 Change of US$1.00/bbl WCS heavy oil differential $8.4 $3.3 Change of US$1.00/bbl MSW light oil differential
Slide 23: Asset Overview
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Slide 24: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 27,800 boe/d 17,200 boe/d 29,200 boe/d 2,000 boe/d (Gross; H1/2022) Oil and NGLs 81% 88% 92% 82% (Gross; H1/2022) 2P Reserves (1)
Slide 25: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with an average 25% W.I. Karnes • Produced 27,800 boe/d LONGHORN (81% liquids) in H1/2022 Atascosa • H1/2022 - 37 gross (8.6 net) w
Slide 26: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Free Cash Flow (1) (C$ millions) 224 net 250 locations $1.4 billion cumulative asset level 200 free cash flow since 2016 150 100 ~ 18 $228 net wells 50 on- stream 0 $332 2022 Program Remaining Undrilled In
Slide 27: Viking Light Oil: Highly Prospective Sections
Viking Light Oil: 460 Highly Prospective Sections • Shallow (700 m), light oil (36° API) resource play • Produced 17,200 boe/d (88% oil) in H1/2022 • Strong operating netback(1) ~ $68/boe at US$85 WTI Kerrobert Plenty • $211 million of asset Esther/Hoosier Greater Gleneath level free cash flow(1) in
Slide 28: Viking: High Netback Light Oil
Viking: High Netback Light Oil High Operating Netback (1) Light Oil ($/boe) > 10 year drilling inventory (3) Strong price realizations, low cost structure and high free cash flow (1) 1,800 ~ 1,650 net locations 1,600 1,400 1,200 1,000 $120.00 $337MM 800 600 ~ 130 $265MM 400 net wells $100.00 200 on-
Slide 29: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development • Produced 12,900 boe/d in H1/2022 (85% oil) • Dominant 560 net sections • 9 net Bluesky multi-lateral wells planned for 2022 • Long life polymer flood at Seal Clearwater Seal • Produced 7,300 boe/d (100% oil) Harmon Valley in Q2/2022 • Strategic agr
Slide 30: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory • Produced 11,100 boe/d in H1/2022 (97% oil) • Strong capital efficiencies Ardmore/Cold Lake • Applying multi-lateral horizontal drilling and production techniques Lindbergh • Long-life water and polymer Tanglef lags Lloy dminster floods
Slide 31: Heavy Oil Innovation
Heavy Oil Innovation Peace River Lloydminster Multi-Lateral Horizontal Horizontal Well Economics (1) WTI Oil Price $75/bbl $85/bbl WTI Oil Price $75/bbl $85/bbl Payout: 1.0 year 9 months Payout: 9 months 7 months IRR: 110% 170% IRR: 205% 320% Recycle Ratio: 3.3x 3.9x Recycle Ratio: 2.8x 3.4x (1) Ind
Slide 32: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • Continue to advance the delineation of the Pembina Duvernay Shale • ~ 200 sections of 100% WI lands • Eleven wells drilled to date have delineated a minimum of 100-125 sections Black Oil • Produced 2,000 boe/d (82% liquids) i
Slide 33: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River Lloydminster Pembina Duvernay Formation Low er Eagle Ford Viking Bluesky Mannville Group Duvernay Upper Eagle Ford Clearw ater Austin Chalk 550-800 (Bluesky) Depth (metres) 3,300-3,900 700 500-600 (Clearw ater) 350-800 2,200-2,400 Oil API Oi
Slide 34: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG)
Slide 35: ESG at Baytex
ESG at Baytex As a responsible energy company, we take a sustainable approach to managing and developing our business into the future. We aspire to create an organization that future generations will be proud to be a part of. 35
Slide 36: How Focusing on ESG Creates Value
How Focusing on ESG Creates Value By incorporating environmental, social and governance factors into our business and reporting on our performance, we create value for shareholders and remain focused on advancing a responsible energy future. 36
Slide 37: Our ESG Scorecard
Our ESG Scorecard Continual improvement is an important element of our culture. We set short and long- term targets to address our impact on air, water, land and people. Each year, we report on our progress towards those targets. 37
Slide 38: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP. TSX
Slide 39: 2022 Guidance and Cost Assumptions
2022 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $450 - $500 Production (boe/d) 83,000 – 85,000 Expenses: Average royalty rate (%) (1) 21.0% - 22.0% Operating ($/boe) (2) $13.75 - $14.25 Transportation ($/boe) (2) $1.50 - $1.60 General and administrative ($ mi
Slide 40: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Benchm ark Prices WTI crude oil (US$/bbl) $57.84 $66.07 $70.56 $77.19 $67.92 $94.29 $108.41 NYMEX natural gas (US$/mcf) $2.69 $2.83 $4.01 $5.83 $3.84 $4.95 $7.17 Production Crude oil (bbl/d) 57,419 58,403
Slide 41: Forward Looking Statements Advisory
Forward Looking Statements Advisory Any “f inancial outlook” or “f uture oriented f inancial inf ormation” in this presentation as def ined by applicable securities laws, has been approv ed by management of Baytex. Such financial outlook or f uture oriented f inancial inf ormation is prov ided f or
Slide 42: Forward Looking Statements Advisory (Cont.)
Forward Looking Statements Advisory (Cont.) These f orward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and diff erentials between light, medium and heavy oil prices; well production rates and reserv e v olumes; the ability t
Slide 43: Specified Financial Measures Advisory
Specified Financial Measures Advisory In this presentation, we ref er to certain specified f inancial measures (such as f ree cash flow, operating netback, total sales, net of blending and other expense, heav y oil sales, net of blending and other expense, and av erage roy alty rate) which do not ha
Slide 44: Capital Management Measures Advisory
Capital Management Measures Advisory This presentation contains the terms "adjusted funds flow", "net debt“, "net debt to adjusted f unds f low ratio" and “net debt to EBITDA” which are capital management measures. We believ e that inclusion of these specif ied f inancial measures prov ides usef ul
Slide 45: Advisory Regarding Oil and Gas Information
Advisory Regarding Oil and Gas Information The reserv es inf ormation contained in this presentation has been prepared in accordance with National Instrument 51-101 -Standards of Disclosure f or Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). The determination of oil
Slide 46: Notes
Notes BAYTEX ENERGY CORP. 46
Slide 47: Notes
Notes BAYTEX ENERGY CORP. 47
Slide 48: 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 & Chief Financial Officer Toll Free 1.800.524.5521 587.952.31
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