Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (April 2024)
46 slides from Baytex Energy's investor presentation, Apr 15, 2024
Slide 1: Eagle Ford Presentation
EAGLE FORD PRESENTATION CREATING ENERGY | CREATING VALUE April 15, 2024
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: Agenda
AGENDA 1. Introduction 2. Geology 3. Operations 4. Market Access 5. Closing Remarks 6. Q&A BAYT EX ENERGY / NYSE / T SX BT E 3
Slide 4: Our Team
OUR TEAM Julia Gwaltney Charlie Bilberry SVP and General Manager, Eagle Ford Operations Director, Midstream and Marketing Over 30 years of O&G experience Over 16 years of O&G experience Bachelor of Science in Petroleum Engineering, Bachelor of Business Administration, Colorado School of Mines Univer
Slide 5: 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: 8.6 million | US: 9.4 million Shares Outstanding 821 million Market Capitalization / Enterprise Value (2) $4.3 billion / $6.8 billion Annual Dividend per Share | Dividend Yield (3)
Slide 6: Demonstrating the strength of our Eagle Ford Operations
KEY TAKEAWAYS Demonstrating the strength of our Eagle Ford Operations Houston team has decades of direct experience in the Eagle Ford Technical Expertise Strong sub-surface understanding and reservoir characterization Downstream marketing provides barrel differentiation Focused on maximizing efficie
Slide 7: Eagle Ford Overview
EAGLE FORD OVERVIEW 60% of production (1) 65% of asset level free cash flow (4) 12 to 15 years drilling inventory LEE Strong drilling economics BASTROP Upper Eagle Ford / Marl, Austin Chalk and refrac opportunities FAYETTE CALDWELL Operational Metrics 92,000 boe/d (60% oil, 80% liquids) (1) GUADALUP
Slide 8: Geology
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Slide 9: Regional Subsurface Overview
REGIONAL SUBSURFACE OVERVIEW Located within the black & volatile oil and Highly consistent geology: condensate phase windows Thickness: 90-150’ Lower Eagle Ford Consistent geological characteristics and reservoir continuity Depth: 9,000’ to 12,500’ Primary Lower Eagle Ford development at varying API
Slide 10: Well-Understood Subsurface
WELL-UNDERSTOOD SUBSURFACE Seismic Coverage Lower Eagle Ford Structure Map Modern pilots Vintage vertical wells Horizontal wells 3D seismic outline Excellent data acquisition & sampling with over 30 Eagle Ford pilots, 90 vintage vertical wells & 9 cores Robust petrophysical analysis supported by 80
Slide 11: Pressure and Fluid Phase
PRESSURE AND FLUID PHASE Pressure gradients & GOR dominantly controlled by depth Abnormally pressured reservoir with gradients from 4500-9500 psi (0.5-0.8 psi/ft) across acreage GOR ranges from 400 scf/bo in updip to ~9,000 in downdip. Sharp increase in southeast Lower Eagle Ford Reservoir Pressure
Slide 12: Operations
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Slide 13: Well Design Evolution
WELL DESIGN EVOLUTION Gross Operated Wells Online 181 Majority of online wells completed with older 127 generation completions, which leaves 93 108 74 70 abundant recoverable resource available for 50 40 32 55 49 54 18 refrac program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 O
Slide 14: Drilling Performance
DRILLING PERFORMANCE H&P high spec rig fleet delivers top 2-string designs are used in the shallower portions of tier performance the Lower Eagle Ford that require lower mud weight Detailed engineering and offset analysis is done on every pad to minimize operational issues 3-string designs are utili
Slide 15: Completion Performance
COMPLETION PERFORMANCE Utilizing the same Liberty frac fleet since late 2021 • Performance metrics based on standard design of 2,250 lbs/ft proppant loading Q1 2024 Completion Performance: • Consistent, modern completion designs Record for total pumping hours in a 24-hour day achieved utilized acros
Slide 16: Capital Efficiency Improvements
CAPITAL EFFICIENCY IMPROVEMENTS Targeting an 8% improvement in our operated drilling and completion costs per completed lateral foot over 2023 Average Well Cost (Operated) Average Well Cost (Operated) (US$ millions) (US$ per completed lateral length) 9,800 9,700 $11.5 MM $1,200 ~ $10.5 MM $1,100 202
Slide 17: 2024 Operated Activity
2024 OPERATED ACTIVITY LaSalle Fayette DeWitt Gonzales Lavaca Karnes Net Wells to Sales 49 Completed Lateral Length (CLL) 9,800’ Well Cost (DCET - US$MM) $10.5 Well Cost (US$/CLL) $1,100 Wilson IP 365 (boe/d) 640 DeWitt Oil and NGLs 85% EUR (Mboe) 750 Capital Efficiency (US$/boe/d) $16,000 Karnes BA
Slide 18: Strong Well Performance
STRONG WELL PERFORMANCE Well performance continues to increase year-over-year Identifying and executing on best locations Maximizing completable lateral length Deploying advanced modern completions Advancements in completions design evidenced by dramatic step change in performance post-2017 Well Per
Slide 19: Strong Well Performance
STRONG WELL PERFORMANCE Absolute well performance continues to increase year-over-year Normalized well performance consistent through time Absolute Well Performance – 2 Phase (boe) Normalized Well Performance – 2 Phase (boe) Source: Enverus BAYT EX ENERGY / NYSE / T SX BT E 19
Slide 20: Top Quartile Performance in H2/2023
TOP QUARTILE PERFORMANCE IN H2/2023 22 operated wells onstream Strong results across thermal H2 2023 Wells Onstream maturity window Wells 30-day Peak % Crude Oil and Well black & volatile oil and condensate Onstream Rate (boe/d) NGLs Q3 2023 13 1,500 78% Q4 2023 9 1,600 80% Top quartile performance
Slide 21: Upper Eagle Ford Development
UPPER EAGLE FORD DEVELOPMENT Upper Eagle Ford development horizon in high-graded areas 2024 program: ~4 net wells Dual Lower-Upper EF play in east due to thickness increase and clay-rich barrier in Lower EF Thicker clay member in downdip provides baffle between LEF and UEF providing two development
Slide 22: Eagle Ford Refracs
EAGLE FORD REFRACS Significant opportunity for refracs and improved recoveries given understimulated early development > 300 refracs completed basin wide in the Eagle Ford to-date ~85% in similar reservoir in Karnes, DeWitt, and Lavaca counties Devon, Conoco and Marathon most active Consistent impro
Slide 23: Medina 2024 Refrac
MEDINA 2024 REFRAC Medina Production Performance Baytex completed its first refrac in 2024 Medina well expected to generate > 100% IRR 1000 2024 Medina Refrac 2014 Original Completion 100 BOPD On-Line Date: February 2024 On-Line Date: November 2014 4” liner; CLL = 4,880’ 5.5” casing 10 Slickwater: 2
Slide 24: Base Production Optimization – Focussed on Declines
BASE PRODUCTION OPTIMIZATION – FOCUSSED ON DECLINES Lowering gas line pressure: adding compression, line looping, equipment runtime Artificial lift optimization: primary lift methods are gas lift, rod pump and jet pump Workovers: downhole repairs, lateral clean outs Data automation: putting real tim
Slide 25: Development Inventory and Economics
DEVELOPMENT INVENTORY AND ECONOMICS > 800 net drilling locations and 12 to 15 years of development Net Drilling Locations(1) Net Drilling Locations by Zone(1) Individual Well Economics(1)(2) 900 800 700 IP365 600 boe/d Unbooked Upper EUR 680 Mboe 600 Risked Eagle Ford % Oil and NGLs 82% 500 Probable
Slide 26: Gulf Coast Market Access and Pricing
Gulf Coast Market Access and Pricing
Slide 27: Ironwood System Map
IRONWOOD SYSTEM MAP Ironwood partnership provides strategic blending, storage, batch sales and barrel differentiation ~ 67% of BTE operated barrels flow through the Ironwood facility 80% arrive via pipeline, 20% via truck BAYT EX ENERGY / NYSE / T SX BT E 27
Slide 28: Strong Market Access
STRONG MARKET ACCESS The Kinder Morgan Crude & Condensate Pipeline ("KMCC") originates in the Eagle Ford and delivers crude/condensate to multiple terminals with access to refineries, petrochemical plants and docks on the Texas Gulf Coast, providing Baytex with access to several key crude markets BA
Slide 29: Premium Price Realizations
PREMIUM PRICE REALIZATIONS MEH – WTI Differential (US$/bbl) Light oil and condensate ~ 60% of production $6 $5 Baytex crude quality ~ 45° API (range 38 to 54°) $4 Light oil steam priced in reference to the Magellan $3 $2 East (“MEH”) benchmark at Houston, Texas $1 MEH typically trades greater than U
Slide 30: Wrap-Up
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Slide 31: Five-Year Outlook (2024 – 2028) at US$70/bbl WTI
FIVE-YEAR OUTLOOK (2024 – 2028) at US$70/bbl WTI Sustainable plan(1) delivers significant value 1-4% annual ~ 60% annual production growth reinvestment rate(3) Underpinned by strong drilling economics Annual E&D expenditures of $1.2 to $1.4 and > 10 years drilling inventory billion drives meaningful
Slide 32: Shareholder Returns
FIVE-YEAR OUTLOOK: 2024 - 2028 Shareholder Returns(1) Compelling Returns Profile Underpinned by disciplined reinvestment and capital allocation Free Cash Flow(1)(2) over Five-Year Outlook ($ millions) Return of Capital(2) over Five-Year Outlook(1) ($ millions) $7,000 $4,500 $4,000 $6,000 $3,500 Incl
Slide 33: Focus on Operational Excellence to Deliver Long-Term Value
SUMMARY Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns High-quality and diversified oil portfolio with more than 10 years of drilling inventory Disciplined Track record of new discoveries Reinvestment and Targeting modest single-digit organic growth with
Slide 34: Appendix
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Slide 35: Committed to Safety and ESG Leadership
COMMITTED TO SAFETY AND ESG LEADERSHIP Operational Best Practices Leading indicators Minimizing Flaring and Emissions Focused on being proactive Reduce flaring by connecting wells to pipelines Daily Job Site Analysis (JSAs) prior to production Hazard identification and tracking Transport majority of
Slide 36: Standard Gas Lift Production Pad Facility
STANDARD GAS LIFT PRODUCTION PAD FACILITY Oil Tank Oil Tank Water 500 BBL 500 BBL 500 BBL Sales Vapor Recovery Treater Treater Tower Oil Tank Oil Tank Oil Tank 500 BBL 500 BBL 500 BBL Low Pressure Flare Oil, Gas, Water High Oil Pressure Gas Gas Lift Well #1 Well #2 Water BAYT EX ENERGY / NYSE / T SX
Slide 37: History and Transformation of Asset Base
HISTORY AND TRANSFORMATION OF ASSET BASE 2019 – 2020 October 2021 June 2023 September 2016 January 2021 New Corporate Officers Rebranded to Baytex acquires Company exits Juniper Capital provides Appointed Ranger Oil Ranger Oil through Corporate bankruptcy investment and merger Highlights becomes maj
Slide 38: Regional Activity by Top Operators
REGIONAL ACTIVITY BY TOP OPERATORS BAYT EX ENERGY / NYSE / T SX BT E 38
Slide 39: U.S. Business Unit – Operating and Financial Results
U.S. BUSINESS UNIT – OPERATING AND FINANCIAL RESULTS Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Benchmark Prices w WTI crude oil (US$/bbl) $76.13 $73.78 $82.26 $78.32 $77.62 NYMEX natural gas (US$/MMbtu) $3.42 $2.10 $2.55 $2.88 $2.74 Production Light oil and condensate (bbl/d) 15,280 20,710 58,122 55,981
Slide 40: Advisories
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Slide 41: 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 42: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) These forward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and differentials between light, medium and heavy oil prices; well production rates and reserve volumes; success obtained
Slide 43: 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 44: 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 45: Capital Management Measures Advisory
CAPITAL MANAGEMENT MEASURES ADVISORY This presentation contains the terms "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 evaluating the finan
Slide 46: 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