Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (June 2023)
36 slides from Baytex Energy's investor presentation, Jun 20, 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION CREATING ENERGY | CREATING VALUE JUNE 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: 8 million | US: 4 million Shares Outstanding 862 million Market Capitalization / Enterprise Value (2) $3.8 billion / $6.5 billion Annual Dividend per Share | Dividend Yield (3) $0.
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 10 or more years drilling inventory across each of our core assets Disciplined Track record of new discoveries Reinvestment and Targeting
Slide 5: Ranger Acquisition Adds Quality Eagle Ford Scale
RANGER ACQUISITION ADDS QUALITY EAGLE FORD SCALE Reinforces a resilient and sustainable business Attractive purchase price (US$2.2B / C$2.9B), including assumed net debt(1) Transaction Overview Ranger shareholders received 7.49 Baytex shares plus US$13.31 cash Acquisition closed June 20, 2023 162K c
Slide 6: H2/2023 Outlook
H2/2023 OUTLOOK Return 50% of 155,000 boe/d Mid-point production Free Cash Flow (1) Share buybacks + dividend Execute an exploration and development program of H2 / 2023 Guidance $595 to $635 million E&D Expenditures $595 - $635 million Onstream 34 net wells in the Eagle Ford and 90 net Production 1
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: Maintaining Financial Strength
MAINTAINING FINANCIAL STRENGTH Commitment to a Strong Balance Sheet Net Debt (1) (Estimated June 30, 2023) $ millions $1.5 billion Credit facilities (4) Term Loan (5) $662 $203 total debt(1) Long-term notes Total debt $1,635 $2,500 target Working Capital Net Debt $200 $2,700 Represents 1x total debt
Slide 9: Free Cash Flow Allocation Policy
FREE CASH FLOW ALLOCATION POLICY Direct shareholder returns increase to 50% of free cash flow(1) Total Debt(2) Above $1.5 billion Total Debt Below $1.5 billion Adjusted Funds Flow (2) Adjusted Funds Flow Less: Exploration and Development Expenditures Less: Exploration and Development Expenditures Le
Slide 10: Free Cash Flow Profile and Shareholder Return Potential
FREE CASH FLOW PROFILE AND SHAREHOLDER RETURN POTENTIAL Attractive Free Cash Flow Yield(1)(2) Annual Free Cash Flow(1) Sensitivity Cumulative Free Cash Flow H2/2023 - 2026 ($ millions)(2)(3)(4) ($ billions)(3)(4) $2,000 ~ 43% $6.0 Yield $1,500 ~ 31% $5.0 Yield $4.0 ~ 19% $3.0 $1,000 Yield $2.0 $500
Slide 11: Crude Oil Hedge Portfolio
CRUDE OIL HEDGE PORTFOLIO Balanced Approach to Risk Management Target 40% of 50,000 ~ 40% Hedged Volumes (bbl/d) ~ 35% Net Crude Oil 40,000 30,000 Volumes(1) 20,000 10,000 ~ 10% ~ 2% 0 Disciplined hedge program to help mitigate Q3 2023 Q4 2023 Q1 2024 Q2 2024 volatility in revenue due to changes in
Slide 12: Adjusted Funds Flow Sensitivities
ADJUSTED FUNDS FLOW SENSITIVITIES Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Change of US$5.00/bbl WTI crude oil $218 Change of US$1.00/bbl WCS heavy oil differential $17 Change of US$0.50/MMbtu NYMEX natural gas $15 Change of $0.01 in the C$/US$ exchange rate $22 (1) Capi
Slide 13: Asset Overview
ASSET OVERVIEW w ro = BAYTEXENERGY.COM ,
Slide 14: 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 (H2/2023) ~ 92,000 boe/d ~ 21,000 boe/d ~ 37,000 boe/d % Liquids 82% 87% 95% Land (net acres) 182,000 440,000 710,000 2P Reserves (Gross) (1)
Slide 15: U.S. Light Oil: Eagle Ford
U.S. LIGHT OIL: EAGLE FORD Building a Strong Operating Platform Materially Increased Scale in a Premier Basin CALDWELL FAYETTE OPERATED 92,000 boe/d GUADALUPE Pro Forma production GONZALES LAVACA Eagle Ford Pro Forma 267,112 gross acres, 68% average working interest 92,000 boe/d of production (82% l
Slide 16: U.S. Light Oil: Operated Eagle Ford
U.S. LIGHT OIL: OPERATED EAGLE FORD Consistent Performance Improvement Strength Relative to Local Peers Cumulative Well Production by Year(2) Competitive 250,000 2020 2019 Performance 2018 Cumulative 2 Phase Production (boe) 2021 200,000 2017 Across the Oil Window 2016 since 2020 150,000 2023 2022 R
Slide 17: 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 18: 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) 514 net sections PEACE RIVER Produced 12,700 boe/d in Q1/2023 (85% oil) 7 net multi-later
Slide 19: 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 615 (88%) 705 (86%) $12.5 80% 16 Karnes Trough Eagle Ford 590 (76%) 630 (74%) $8.2 89% 13
Slide 20: Environment, Social and Governance (ESG)
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
Slide 21: ESG at Baytex
ESG AT BAYTEX As a responsible energy company, we take a sustainable approach to managing, developing and improving our business into the future. We aspire to create an organization and business that our teams are proud to be a part of, and future generations will appreciate. BAYT E X ENERG Y / NYSE
Slide 22: ESG Highlights
ESG HIGHLIGHTS Our vision is to be a leader in the responsible production of energy the world needs for the future GHG Emission Reduction Safety 59% reduction in GHG emissions 17% reduction in total recordable intensity through 2022, relative to injury frequency in 5 years 2018 baseline; 65% target
Slide 23: Supplementary Information
SUPPLEMENTARY INFORMATION BAYTEXENERGY.COM
Slide 24: Board of Directors
BOARD OF DIRECTORS Efficient and Independent Board Complementary Skills Suited to Govern the Combined Business Eric T. Greager Mark R. Bly President and Chair of the CEO Board Tiffany (“T.J.”) Trudy M. Don G. Angela Jennifer A. Dave L. Steve D.L. Jeffrey E, Cepak Curran Hrap Lekatsas Maki Pearce Rey
Slide 25: Summary of Operating and Financial Metrics
SUMMARY OF OPERATING AND FINANCIAL METRICS Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Benchmark Prices WTI crude oil (US$/bbl) $57.84 $66.07 $70.56 $77.19 $67.92 $94.29 $108.41 $91.56 $82.64 $94.23 $76.13 NYMEX natural gas (US$/mmbtu) $2.69 $2.83 $4.01 $5.83 $3
Slide 26: 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 27: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) These forward-looking statements are based on certain key assumptions regarding, among other things: our ability to successfully integrate the acquired business into our existing operations; the ability of the combined business to realize the anticipated b
Slide 28: 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 29: 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 30: Capital Management Measures Advisory
CAPITAL MANAGEMENT MEASURES ADVISORY This presentation contains the terms “total debt”, "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 evalua
Slide 31: 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 32: 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 33: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 33
Slide 34: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 34
Slide 35: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 35
Slide 36: 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