Peyto Exploration & Development Corp. · TSX:PEY
Peyto Exploration & Development — Shareholder Meeting (June 2012)
50 slides from Peyto Exploration & Development's shareholder meeting presentation, Jun 6, 2012
Slide 1: Peyto AGM June 6, 2012
2011 ‐ 2003 ‐ 2010 1998 ‐ 2003 www.Peyto.com Peyto AGM June 6, 2012
Slide 2: Peyto Exploration & Development Corp.
PEYTO Exploration & Development Corp. 2 6/11/2012
Slide 3: Advisory
Advisory I am going to tell you about my vision of Peyto’s ffuture today. y I will also tell yyou where I think commodity prices are going to go. These are called forward looking statements. I am being truthful and using everything I know about Peyto and the industry to predict the future but I will
Slide 4: The Peyto Difference
The Peyto Difference PEYTO Exploration & Development Corp. 4 6/11/2012
Slide 5: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 5 6/11/2012
Slide 6: Peyto is a business.
Peyto is a business business. PEYTO Exploration & Development Corp. 6 6/11/2012
Slide 7: PEYTO
PEYTO Exploration & Development Corp. 7 6/11/2012
Slide 8: PEYTO
PEYTO Exploration & Development Corp. 8 6/11/2012
Slide 9: Produce it, Sell it, Profit
(Produce it) Sell it Profit PEYTO Exploration & Development Corp. 9 6/11/2012
Slide 10: PEY 2011 PDP FD&A, costs and profit per mcfe
PEY 2011 PDP FD&A $/mcfe $/ f ($2.12) Cash Costs $/mcfe ($1 35) ($1.35) Sales Price $/mcfe $5 47 $5.47 $2 00 $2.00 37% profit fit PEYTO Exploration & Development Corp. 10 6/11/2012
Slide 11: 2011 FD&A cost history of $2.12/mcfe
2011 History Land $25 7% 8% PEY 2011 Seismic $3 1% 2% Drilling $175 PDP FD&A $/ f $/mcfe ($2.12) ($2 12) Compl. $104 W ll it $32 Wellsite Facilities $40 $379 74% 19% 100% 73% 17% 100% Cash Costs $/ f $/mcfe ($1 35) ($1.35) ∆PDP Reserves (before Prod.) 29.8 mmboes PDP FD&A $12.72/boe Sales Price $/ f
Slide 12: Peyto Realized Gas Price ($/mcfe)
mcfe) $10 Peyto Reallized Gas Price ($/m $8 $6 $4 $2 PDP FD&A $- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PEYTO Exploration & Development Corp. 12 6/11/2012
Slide 13: PEY 2011 cost breakdown
PEY 2011 PDP FD&A $/ f $/mcfe ($2.12) ($2 12) Royalties Opex ($0.53) ($0 53) ($0.35) Cash Costs $/ f $/mcfe ($1 35) ($1.35) Transport G&A ($0.13) ($0.06) Sales Price Interest ($0.28) $/ f $/mcfe $5 47 $5.47 Total Costs ($1.35) 37% p profit f $2 00 $2.00 PEYTO Exploration & Development Corp. 13 6/11/
Slide 14: Realized gas price and average profit
$10 mcfe) eyto Realiized Gas Price ($/m $8 39% Average Profit $ $6 Royalties, Opex, $4 $ Bonus Transp G&A, Transp, G&A Int $2 PDP FD&A Pe $‐ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PEYTO Exploration & Development Corp. 14 6/11/2012
Slide 15: Canadian peers 2011 vs Peyto 2011 costs
CND* 2011 PEY 2011 PDP FD&A $/mcfe $/ f ($4.20) (($2.12)) Cash Costs $/mcfe ($3 91) ($3.91) ($1.35) Sales Price $/mcfe $7 89 $7.89 $5 47 $5.47 3% loss l ($0 22) ($0.22) $2 00 $2.00 *Includes: AAV,ARX,BIR,BNP,BTE,CLT,CPG,CR,ERF,FEL,NAE,NGL,PBN,PGF,PMT,POU,PRQ,PWT,TET,TOU,VET,ZAR PEYTO Exploration & D
Slide 16: Canadian peers 2010 vs 2011
CND* 2010 CND 2011 PDP FD&A $/mcfe $/ f ($4.74) ($4 20) ($4.20) Cash Costs $/mcfe ($3 64) ($3.64) ($3 91) ($3.91) Sales Price $/mcfe $7 60 $7.60 $7 89 $7.89 ($0.22)) ($0. 10% loss l ($0 78) ($0.78) *Includes: AAV,ARX,BIR,BNP,BTE,CLT,CPG,CR,ERF,FEL,NAE,NGL,PBN,PGF,PMT,POU,PRQ,PWT,TET,TOU,VET,ZAR PEYT
Slide 17: Canadian peers 2009 to 2011
CND* 2009 CND 2010 PDP FD&A $/mcfe $/ f ($4.31) ($4.74) ($4 74) CND 2011 ($4.20) Cash Costs $/mcfe ($3 63) ($3.64) ($3.63) ($3 64) ($3.91) ($ ) Sales Price $/mcfe $7 27 $7.27 $7 $7.60 60 $7.89 ($0.22) ($0.78)) ($ 9% loss l ($0 68) ($0.68) *Includes: AAV,ARX,BIR,BNP,BTE,CLT,CPG,CR,FEL,NAE,NGL,PGF,PMT
Slide 18: Peyto profit 2008 to 2011
Peyto 2011 PEY 2010 ($2.12) ($2.11) PEY 2009 PDP FD&A $/mcfe ($2 11) PEY 2008 ($2.27) ($2.88) Cash Costs $/ f $/mcfe ($1 35) ($1.63) ($1.35) ($1 63) ($1.75) ($1 75) ($ ($3.01) ) $9.55 Sales Price $/mcfe $5 47 $5.47 $6 $6.18 18 $6.75 $3.66 $2.73 $2 44 $2.44 37% Profit $2 00 $2.00 PEYTO Exploration &
Slide 19: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 19 6/11/2012
Slide 20: Peyto is our assets.
Peyto is our assets assets. PEYTO Exploration & Development Corp. 20 6/11/2012
Slide 21: PEYTO
PEYTO Exploration & Development Corp. 21 6/11/2012
Slide 22: PEYTO
PEYTO Exploration & Development Corp. 22 6/11/2012
Slide 23: Peyto land, gas plants and pipelines
313 800 nett acres • 313,800 (825,000 net acres for all zones) • 5 operated gas plants ---(340 mmcf/d capacity) Cutbank • 900+ km pipelines • 750+ producing zones Kakwa • 42,000 42 000 b boe/d /d Processed by Peyto Chicken Leland 150 miles Pine Creek Greater Sundance Operated by Peyto Ansell Interes
Slide 24: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 2424 6/11/2012
Slide 25: Peyto is our people.
Peyto is our people people. PEYTO Exploration & Development Corp. 25 6/11/2012
Slide 26: The Peyto People
The Peyto y People p ________ 36 Full time 5 Consultants 54 Field Fi ld CContractors PEYTO Exploration & Development Corp. 26 6/11/2012
Slide 27: Gas to assets ratio per employee
Gas to Asss Ratiio 2.5 2.0 (Bcfe/employee) 1.5 1.0 0.5 ‐ CR PRQ CPG BNP NGL TOU PBN POU PMT ZAR PWT CLT TET VET FEL BIR PEYTO AAV ARX PGF ERF BTE *Based on company 2011 AIF filings of full time employees PEYTO Exploration & Development Corp. 27 6/11/2012
Slide 28: Production wedge and capital efficiency
2011 ‐ $17,500/boe/d $ / / 2010 ‐ $17,300/boe/d 2009 ‐ $17,300/boe/d $50,000 2008 ‐ $33,100/boe/d 2007 ‐ $26,500/boe/d 2006 ‐ $ $50,300/boe/d , / / oduction Wedge 2005 ‐ $42,100/boe/d 2004 ‐ $22,200/boe/d $40,000 2003 ‐ $25,300/boe/d Capittal Efficieency 2002 ‐ $22,400/boe/d 2001 ‐ $26,700/boe/d 200
Slide 29: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 29 6/11/2012
Slide 30: Peyto is about profits.
Peyto is about profits profits. PEYTO Exploration & Development Corp. 30 6/11/2012
Slide 31: 2011 net capital and growth
250 200 2011 150 Net Capital to PV5 100 50 0 Production/share g growth 250 2011 Capital Program 62 Net Wells 200 21,700 boe/d 150 2P Reserves/share growth 100 50 0 IRR Note: liquids are converted to molar equivalent gas volume for this analysis (1 bbl approximately equal to 1.13 mcfe) PEYTO Based on
Slide 32: Return on capital employed and return on equity
60% $10 50% $8 40% $6 30% 12 yr Average ROE $4 20% 14% 11% 10% $2 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $0 Return On Capital Employed (%) Return On Equity (%) Earnings/share Realized Gas Price ($/mcfe) 12 yr Average ROCE Return on Equity (ROE) is earnings for the period
Slide 33: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 33 6/11/2012
Slide 34: Peyto is enduring.
Peyto is enduring. enduring PEYTO Exploration & Development Corp. 34 6/11/2012
Slide 35: Reserve Life Index
25 Assets Peyto’s Longest Reserve Life 20 75% More Reseerve Life Index (yyrs) Producingg 15 Reserves than Industry 10 5 0 PDP TP 2P Industry Peyto *Includes: Includes: AAV,ARX,BIR,BNP,BTE,CLT,CPG,CR,ERF,FEL,NAE,NGL,PGF,PMT,POU,PRQ,PWT,TET,TOU,VET,ZAR AAV ARX BIR BNP BTE CLT CPG CR ERF FEL NAE NGL PG
Slide 36: Peyto Wells Drilled
Peyto Wells Drilled 1000 500 0 PEYTO Exploration & Development Corp. 36 6/11/2012
Slide 37: Wells done and locations to do
Done To Do Total Total Total Total V i l Vertical H Hz H Hz Hz Wells Wells Locations Locations Booked* Unbooked 432 40 0 206 06 103 03 5 1 6 10 1 2 12 90 29 44 25 7 11 34 148 14 53 83 99 4 2 14 6 12 87 1 21 124 652 137 410 527 PEYTO Exploration & Development Corp. *As recognized in the IPC (formerly
Slide 38: Variable Price Economics
Variable Price Economics NPV (millions of CDN dollars) Category 0% 5% 8% 10% Proven Producing $ 4,809 $ 2,624 $2,049 $ 1,792 Proven Non-Producing $ 97 $ 43 $ 29 $ 23 Proven Undeveloped $ 2,796 $ 1,306 $ 878 $ 681 Total Proven $ 7,702 $ 3,972 $ 2,956 $ 2,496 Probable Additional $ 3,554 3 554 $1,511 1
Slide 39: Ratio PV0 to PV10
2.8 2.6 2.4 2.2 2.0 1.8 18 1.6 1.4 1.2 10 1.0 AAV ERF NAE ARX ONR ZAR CR PWT BNP TET CLT VET PMT PGF FEL NGL BTE PEYTO PRQ TOU CPG POU BIR PBN Ratio PV0 to PV10 2011 PDP BT NPV PEYTO Exploration & Development Corp. 39 6/11/2012
Slide 40: Peyto is different.
Peyto is different. different PEYTO Exploration & Development Corp. 40 6/11/2012
Slide 41: A Stacked Hand
A Stacked St k d Hand H d PEYTO Exploration & Development Corp. 41 6/11/2012
Slide 42: Peyto Reality
Peyto Reality Peyto Energy Trust Peyto Peyto Exploration & Energy Development ??? Corp. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 PEYTO Exploration & Development Corp. 42 6/11/2012
Slide 43: The Peyto Difference
The Peyto Difference PEYTO Exploration & Development Corp. 43 6/11/2012
Slide 44: Natural Gas Discussion
Natural Gas Discussion PEYTO Exploration & Development Corp. 44 6/11/2012
Slide 45: Push and Pull on gas prices
• Coal to Gas • Warm Winter/ Switching Excess Storage • Transportation • Shale Gas Fuel • Hz H MSF Push • Steep Declines Pull Technology • Potential LNG • No LNG Exports Exports P • Cool C l Summer? S ? • Hot Summer? PEYTO Exploration & Development Corp. 45 6/11/2012
Slide 46: Avg Price $3.50/GJ??
Avg Price $3.50/GJ?? www.gasalberta.com lb PEYTO Exploration & Development Corp. 46 6/11/2012
Slide 47: $3.50/GJ price scenario per mcfe
PEY 2011 PDP FD&A $/mcfe $/ f ($2.12) $3.50 $3 50/GJ / Cash Costs $/mcfe ($1 35) X 165%* ($1.35) Sales Price $/mcfe $5 47 $5.78 $5.47 $5 78/mcfe 37% profit fi $2.00 $2 00 * Q1 2012 uplift from unhedged natural gas price in $/GJ to realized effective price $/mcfe PEYTO Exploration & Development Corp.
Slide 48: Liquid conversion and realized prices
$6.50/bbl $6 50/bbl = 3:1 Methane CH4 Ethane C2H6 $12/bbl = 5:1 Propane C3H8 $32/bbl = 13:1 $69/bbl = 28:1 Butane C4H10 Liquid Conversion Condensate & $101/bbl = 41:1 Existing Refrig. Cheap Cut Pentanes C5+ (-35°C) (-80°C) 30% C3 90%C3 50% C4 99% C4 97% C5+ 99% C5+ * Q1 2012 realized prices PEYTO Ex
Slide 49: Peyto's Future Story?
Peyto Peyto’ss Future Story? 70,000 60,000 50,000 ED 40 000 40,000 BOE 30,000 20,000 10,000 0 PEYTO Exploration & Development Corp. 49 6/11/2012
Slide 50: PEYTO
PEYTO Exploration & Development Corp. 50 6/11/2012
Peyto Exploration & Development — Shareholder Meeting (June 2012) on 6ix