Baytex Energy Corp. · TSX:BTE
Baytex Energy — Q1 2020 Earnings Presentation
36 slides from Baytex Energy's earnings presentation, May 8, 2020
Slide 1: Investor Presentation May 2020
Investor Presentation May 2020
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 Track Record of ▪ E
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX / NYSE: BTE Average Daily Volume (1) CAN: 17.5 million / US: 5.0 million Shares Outstanding (2) 560 million Market Capitalization / Enterprise Value (2) $246 million / $2,298 million Operating Statistics Production (Gross W.I.) (3) 70,000 - 74,000 b
Slide 7: ESG Highlights
ESG Highlights GHG Emission Reduction Safety Established target to 55% reduction in lost reduce GHG emissions time incident frequency intensity by 30% by 2021 in 5 years Gas Conservation Indigenous Relations 99.1% routine gas $32 million in contracts conservation in Peace awarded in 2017-2018 River
Slide 8: Q1 2020 Highlights
Q1 2020 Highlights • Generated production of 98,452 boe/d (83% oil and NGL) • Delivered adjusted funds flow of $133 million ($0.24 per basic share) • Issued US$500 million principal amount of 8.75% senior unsecured notes due April 2027 • Redeemed two series of senior unsecured notes - US$400 million
Slide 9: Responding Decisively to COVID-19
Responding Decisively to COVID-19 • The oil and gas industry is facing an unprecedented challenge due to significant degradation and volatility in global crude oil prices • We are focused on protecting the health and safety of our personnel while maintaining our operations • We have implemented a nu
Slide 10: Maintain Financial Liquidity
Maintain Financial Liquidity • Credit Facilities ~ 35% Balance Sheet (1) $ millions Undrawn Bank loan (2) $679 • $417 million of undrawn Long-term notes (3) $1,271 capacity on credit facilities and Long-term debt $1,950 $315 million of liquidity net of Working Capital deficiency $102 working capital
Slide 11: Minimize Capital Outlays
Minimize Capital Outlays • 50% reduction in capital 2020 Guidance (1) spending E&D CapEx $260 - 290 million • $260 to $290 million, from $500 to $575 million, previously. Production 70,000 - 74,000 boe/d Oil and NGLs 82% • Drilling and completion operations in Canada suspended. • Moderated pace of a
Slide 12: Emphasize Cost Reductions
Emphasize Cost Reductions Total Cost Reductions of $135 million • Intensely focused on driving further efficiencies in our G&A Discretionary spending eliminated; operations reduced salaries and annual retainers paid to Board of Directors Fee renegotiations and reduced tolls • Achieved $135 million o
Slide 13: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Balance Q2/2020 Q3/2020 Q4/2020 of Year WTI Fixed Hedges Volumes (bbl/d) 13,267 8,898 2,000 8,055 Fixed Price (US$/bbl) $31.06 $47.84 $58.00 $39.47 WTI 3-Way Option Volumes (bbl/d) 24,500 24,500 24,500 24,500 Average Sold Put / Put / Sold Call (US$/bbl) (1) $50/$58/$63 $50/
Slide 14: 2020E Adjusted Funds Flow Sensitivities
2020E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) (1) (2) Sensitivities Excluding Hedges Including Hedges (3) Change of US$1.00/bbl WTI crude oil $20.2 $17.4 Change of US$1.00/bbl WCS heavy oil differential $3.9 $0.7 Change of US$1.00/bbl MSW light oil diff
Slide 15: Top Quartile Capital Efficiencies
Top Quartile Capital Efficiencies $45,000 $40,000 2018 All-In Capital Efficiencies, excl. A&D ($/boe/d) Weighted Average ($/boe/d) Oil $25,000 $35,000 Gas $12,800 $30,000 Mixed $21,600 All $19,500 $25,000 $20,000 $15,000 $10,000 $5,000 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 BTE 22 23
Slide 16: Asset Overview
= SSS a me cy BAYTEX ENERGY CORP.
Slide 17: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil East Duvernay Production 36,190 boe/d 24,696 boe/d 31,211 boe/d 1,799 boe/d (Gross; Q1/2020) Oil and NGLs 77% 92% 93% 81% (Gross; Q1/2020) 2P Reserves (1) 229
Slide 18: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • Q1/2020 production of LONGHORN 36,200 boe/d (77% liquids) Atascosa • 30 gross (6.1 net) wells in SUG
Slide 19: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory Production Asset Level Free Cash Drilling Inventory (2) (mboe/d) Flow (1) (C$ millions) (net locations) Stable production and ~ $724MM cumulative > 10 year inventory at deep inventory drives asset level free cash flow current pace asset l
Slide 20: Enhanced Completions Drive Step Change in Well Performance
Enhanced Completions Drive Step Change in Well Performance 180 Day Cumulative Well Production Completion Activity 175 Stage Hz Length Proppant # of 17% increase 2019 over 2017 2019 Spacing (ft) (lbs/ft) Stages 150 5% increase 2019 over 2018 2018 (ft) Q1 Cumulative Production (mboe) 6,000 2,700 226 2
Slide 21: 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 a record 24,700 boe/d (92% oil) in Q1/2020 • Added 229 net unbooked drilling opportunities in Kerrobert 2019 through multiple Plenty Esther/Hoosier deals and asset s
Slide 22: 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% 40% Oil Rate (bbl/d) 150 50 30% 100 40 20% 50 10% 30 0 0% 2012 2013 2014
Slide 23: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development Performance Drivers • Produced 16,100 boe/d in Q1/2020 (87% oil) Golden • Dominant 560 net sections • Strong capital efficiencies Seal Harmon Valley Peavine Lands • Q1/2020 strategic agreement with Peavine Metis settlement • 60 sections of land • Ear
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory Performance Drivers • Produced 15,100 boe/d in Q1/2020 (99% oil) Ardmore/Cold Lake • Strong capital efficiencies • Applying multi-lateral horizontal drilling and Lindbergh production techniques Lloydminster Tangleflags • Ramp-up of Kerro
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Lloydminster Peace River Horizontal Multi-Lateral Horizontal 25
Slide 26: East Duvernay Shale Light Oil: Emerging Resource Play
East Duvernay Shale Light Oil: Emerging Resource Play Pembina Region • 275 sections of 100% WI lands • Nine wells drilled to date have delineated a minimum of 100- 125 sections • Produced 1,800 boe/d (81% liquids) in Q1/2020 • Two wells on-stream in 2019 Pembina generated average 30-day IP Ferrybank
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River (1) Lloydminster (1) East 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:
Slide 28: Corporate Sustainability
Corporate Sustainability
Slide 29: Corporate Sustainability
Corporate Sustainability At Baytex, we believe that commitment to corporate responsibility is just as important as delivering financial and operational targets. We publish a biennial Corporate Sustainability Report which provides transparent reporting and clear goals on the topics that matter: Safet
Slide 30: GHG Emissions Reduction
GHG Emissions Reduction Target to reduce GHG emission intensity (tonnes of CO2 per boe) by 30% by 2021. Our emissions reduction strategy includes: • Increasing gas conservation • Reusing associated gas as fuel for field activities • Reducing emissions from storage tanks • Monitoring and preventing f
Slide 31: A Culture of Commitment
A Culture of Commitment How it contributes to Objective What we’ve done Result value creation Ensure our employees and 76% reduction in corporate spill ENVIRONMENT Reduces costs and maintains Responsibly develop contractors uphold our procedures volumes, over 5 years social license our assets for sp
Slide 32: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP.
Slide 33: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2018 Q2 2018 Q3 2018 Q4 2018 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Benchmark Prices WTI crude oil (US$/bbl) $62.87 $67.88 $69.50 $58.81 $64.77 $54.90 $59.81 $56.45 $56.96 $57.03 $46.17 NYMEX natural gas (US$/mcf) $3.00 $2.80 $2.90 $3.64 $3.09
Slide 34: Reserves Summary (Gross)
Reserves Summary (Gross) 2P Reserves Breakdown 2P Reserves by Asset 2P Reserves by Commodity East Other Duvernay Natural Gas PDP Heavy Eagle Probable Ford Oil Light Oil Heavy + NGL Oil PDNP + PUD Viking Category (1) Eagle Ford Viking Heavy Oil East Duvernay Other Total Proved Developed Producing 71
Slide 35: 2020 Guidance and Cost Assumptions
2020 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $260 - $290 Production (boe/d) 70,000 - 74,000 Expenses: Royalty rate (%) 20% Operating ($/boe) $11.75 - $12.50 Transportation ($/boe) $0.80 - $0.90 General and administrative ($ millions) $40 ($1.52/boe) Intere
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 and Chief Financial Officer Toll Free 1.800.524.5521 587.952.