Baytex Energy Corp. · TSX:BTE
Baytex Energy — Q2 2021 Earnings Presentation
36 slides from Baytex Energy's earnings presentation, Jul 29, 2021
Slide 1: Investor Presentation August 2021
Investor Presentation August 2021
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.) Actual results achieved 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 volatility of oil and natural gas prices and price differentials (including t
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 ▪ Exploration and d
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE Average Daily Volume (1) 7.7 million Shares Outstanding (2) 564 million Market Capitalization / Enterprise Value (2) $1.2 billion / $2.8 billion Operating Statistics Production (Gross W.I.) (3) 79,000 – 80,000 boe/d PEACE RIVER Production Mix (
Slide 7: Q2 2021 Highlights
Q2 2021 Highlights Operational Execution • Production of 81,200 boe/d, up 3% from Q1/2021 • E&D capital of $61 million, consistent with full-year plan • Continue to advance our Peace River Clearwater play as we follow-up our successful exploration well drilled in Q1/2021 Free Cash Flow Generation •
Slide 8: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 46% reduction in GHG 25% reduction in total emissions intensity through recordable injury year-end 2020, relative to frequency in 5 years 2018 baseline Gas Conservation Indigenous Relations 97% routine gas Recent agreements with conservation in Peace Rive
Slide 9: 2021 Capital Program
2021 Capital Program • Cash neutrality (capital program fully 2021 Guidance (1) funded) at US$35/bbl WTI E&D CapEx $285 - 315 million • Capital efficiencies of approximately Production 79,000 - 80,000 boe/d $12,000 per boe/d across the Oil and NGLs 81% portfolio Net Wells • 75% directed to our high
Slide 10: 5-Year Plan (2021 to 2025) at US$55 WTI
5-Year Plan (2021 to 2025) at US$55 WTI 1. Disciplined and Returns Based Capital Allocation • Target capital spending at < 70% of adjusted funds flow • Optimize production in the 80,000 to 85,000 boe/d range • Capital efficiencies during the plan period of $15,000 to $16,000 per boe/d 2. Maximize Fr
Slide 11: 5-Year Plan Generates > $1 Billion Cumulative Free Cash Flow
5-Year Plan Generates > $1 Billion Cumulative Free Cash Flow 90,000 > $1 Billion Cumulative Free Cash Flow 80,000 $1,400 70,000 Cumulative Free Cash Flow ($ millions) $1,200 60,000 $1,000 Production (boe/d) 50,000 $800 40,000 $600 30,000 $400 20,000 10,000 $200 0 $0 2021 2022 2023 2024 2025 2021 202
Slide 12: 5-Year Plan with Upside WTI Scenarios
5-Year Plan with Upside WTI Scenario’s US$55 WTI US$60 WTI US$65 WTI >$1 Billion >$1.5 Billion >$2 Billion Cumulative FCF Cumulative FCF Cumulative FCF $500 2.0x $450 1.8x $400 1.6x $350 1.4x Free Cash Flow ($ millions) Net Debt to Bank EBITDA ratio $300 1.2x $250 1.0x $200 0.8x $150 0.6x $100 0.4x
Slide 13: Financial Liquidity
Financial Liquidity • Credit Facilities ~ 50% Balance Sheet (1) $ millions Undrawn Credit facilities $487 • $511 million of undrawn credit Long-term notes $1,109 capacity and liquidity, net of Long-term debt $1,596 working capital, of $477 million Working Capital deficiency $34 Net Debt $1,630 • Fir
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Q3/2021 Q4/2021 H2/2021 2022 WTI Fixed Hedges (1) Volumes (bbl/d) 4,000 4,000 4,000 10,000 Fixed Price (US$/bbl) $45.00 $45.00 $45.00 $53.50 WTI 3-Way Option (2) Volumes (bbl/d) 17,500 17,500 17,500 10,500 Average Sold Put / Put / Sold Call (US$/bbl) $35/$45/$52 $35/$45/$52
Slide 15: 2021E Adjusted Funds Flow Sensitivities
2021E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $22.7 $13.0 Change of US$1.00/bbl WCS heavy oil differential $7.1 $3.2 Change of US$1.00/bbl MSW light oil differential $6.
Slide 16: Asset Overview
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Slide 17: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 30,400 boe/d 17,800 boe/d 23,800 boe/d 1,900 boe/d (Gross; H1 2021) Oil and NGLs 79% 90% 91% 82% (Gross; H1 2021) 2P Reserves (1)
Slide 18: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • H1/2021 production of LONGHORN 30,400 boe/d (79% liquids) Atascosa • H1/2021 - 62 gross (17.2 SUGARL
Slide 19: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Asset Level Free Cash Flow (1) (C$ millions) 300 ~ 250 net locations $923 million cumulative asset level 250 free cash flow since 2016 200 150 ~ 22 100 $124 net wells 50 on- stream $96 0 2021 Program Remai
Slide 20: 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 17,800 boe/d (90% oil) in H1/2021 • Drilling activity resumed in December with two rigs mobilized Kerrobert Plenty • Esther/Hoosier Greater Gleneath Capital reductio
Slide 21: 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% Oil Rate (bbl/d) 50 40% 150 30% 40 100 20% 30 50 10% 20 0 0% 2012 2013 2
Slide 22: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development Performance Drivers • Produced 13,700 boe/d in H1/2021 (86% oil) Golden • Dominant 560 net sections • Three net Bluesky multi-lateral wells planned for H2/2021 Seal Peavine Lands Harmon Valley • 60 section strategic agreement with Peavine Metis settl
Slide 23: Northwest Clearwater: Extending the Trend
Northwest Clearwater: Extending the Trend Peavine • > 500 net sections in the NW Clearwater fairway with > 100 prospective for Spirit River (Clearwater equivalent) • Promising results from initial two appraisal wells (two laterals each) with 30-day initial production rate of ~ 175 bbl/d per well • 2
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory Performance Drivers • Produced 10,100 boe/d in H1/2021 (98% oil) Ardmore/Cold Lake • Strong capital efficiencies • Applying multi-lateral horizontal drilling and Lindbergh production techniques Lloydminster Tangleflags • ~ 22 net wells p
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Peace River Lloydminster Multi-Lateral Horizontal Horizontal Well Economics (1) WTI Oil Price $50/bbl $60/bbl WTI Oil Price $50/bbl $60/bbl Payout: 1.7 years 0.9 years Payout: 1.4 years 0.9 years IRR: 51% 129% IRR: 62% 136% Recycle Ratio: 2.5x 3.8x Recycle Ratio: 2.0x 2.9x Break
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 1,900 boe/d (82% liquids) in H1/2021 • Two wells drilled in 2020 Black Oil demonstrate repeatability of 11-
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River Lloydminster 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° Condensate: 44-55
Slide 28: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG)
Slide 29: 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. 29
Slide 30: 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. 30
Slide 31: Our ESG Targets
Our ESG Targets Our Past Targets Our New Targets Our new targets focus on our environmental and social challenges: OUR TARGETS WHAT WE ACHIEVED GHG EMISSIONS GD GHG EMISSIONS | , , 0, 30% reduction of our corporate [| Weexceeded this target one year By 2025, reduce our emissions intensity © 5% GHG e
Slide 32: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP. TSX
Slide 33: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 Q2 2021 Benchmark Prices WTI crude oil (US$/bbl) $54.90 $59.81 $56.45 $56.96 $57.03 $46.17 $27.85 $40.93 $42.66 $39.40 $57.84 $66.07 NYMEX natural gas (US$/mcf) $3.15 $2.64 $2
Slide 34: Reserves Summary (Gross)
Reserves Summary (Gross) 2P Reserves Breakdown 2P Reserves by Asset 2P Reserves by Commodity Pembina Other Duvernay Natural Gas PDP Probable Eagle Heavy Oil Ford Light Oil Heavy & NGL Oil PDNP + PUD Viking Pembina Category (1) Eagle Ford Viking Heavy Oil Other Total Duvernay Proved Developed Produci
Slide 35: 2021 Guidance and Cost Assumptions
2021 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $285 - $315 Production (boe/d) 79,000 – 80,000 Expenses: Royalty rate (%) 18% - 18.5% Operating ($/boe) $11.25 - $12.00 Transportation ($/boe) $1.15 - $1.25 General and administrative ($ millions) $42 ($1.45/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 & Chief Financial Officer Toll Free 1.800.524.5521 587.952.31