Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (December 2021)
36 slides from Baytex Energy's investor presentation, December 2021
Slide 1: Investor Presentation December 2021
Investor Presentation December 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 ~ 10 or more years of projected drilling inventory in each of our High Quality and core areas (Viking, Eagle Ford and Canadian heavy oil) Diversified Oil Portfolio Scaling up Clearwater development following recent exploration Across Multiple Plays success Capital spendin
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE Average Daily Volume (1) 11.6 million Shares Outstanding (2) 564 million Market Capitalization / Enterprise Value (2) $2.1 billion / $3.6 billion Operating Statistics Production (Gross W.I.) (3) 80,000 – 83,000 boe/d PEACE RIVER Production Mix
Slide 7: YTD 2021 Highlights
YTD 2021 Highlights (1) Operational Execution • Production of 79,900 boe/d, toward high end of guidance range • E&D capital of $239 million, consistent with full-year plan • Continue to advance our Peace River Clearwater play with 5 wells on production Free Cash Flow Generation • Adjusted funds flow
Slide 8: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 46% reduction in GHG 25% reduction in total emissions intensity through recordable injury frequency in 2020, relative to 2018 5 years baseline; 65% target in place Gas Conservation Indigenous Relations 97% routine gas conservation Recent agreements with i
Slide 9: 2022 Capital Program
2022 Capital Program • Cash neutrality (capital program fully 2022 Guidance (1) funded) at ~ US$45/bbl WTI E&D CapEx $400 – 450 million Production 80,000 - 83,000 boe/d • Capital efficiencies of approximately $15,000 per boe/d across the Oil and NGLs 83% portfolio Net Wells • 60% directed to our hig
Slide 10: 2022 Uses of Free Cash Flow
2022 Uses of Free Cash Flow Strengthen Balance Sheet Enhance Shareholder Return • 100% of free cash flow currently being • Upon reaching our initial debt target, we used to reduce net debt anticipate announcing a plan with respect to direct shareholder returns • Expect to hit our initial net debt ta
Slide 11: 5-Year Outlook (2021 to 2025) at US$65 WTI
5-Year Outlook (2021 to 2025) at US$65 WTI Free Cash Flow Profile Highlights of 5-Year Outlook $2,500 Cumulative Free Cash Flow ($ millions) $2,000 • $2.1 billion cumulative free cash flow $1,500 • Target capital spending at ~ 50% of adjusted funds flow $1,000 $500 • 2-4% annual production growth $0
Slide 12: 5-Year Outlook – Free Cash Flow Profile
5-Year Outlook – Free Cash Flow Profile US$65 WTI US$75 WTI ~ $2.1 Billion Cumulative FCF ~ $2.8 Billion Cumulative FCF $1,000 1.8x $900 1.6x $800 1.4x Net Debt to Bank EBITDA ratio Free Cash Flow ($ millions) $700 1.2x $600 1.0x $500 0.8x $400 0.6x $300 0.4x $200 $100 0.2x $0 0.0x 2021 2022 2023 20
Slide 13: Financial Liquidity
Financial Liquidity • Credit Facilities ~ 50% Balance Sheet (1) $ millions Undrawn Credit facilities $547 • $471 million of undrawn credit Long-term notes $1,000 capacity and liquidity, net of Long-term debt $1,547 working capital, of $454 million Working Capital deficiency $18 Net Debt $1,565 • Fir
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Q4/2021 2022 2023 WTI Fixed Hedges (1) Volumes (bbl/d) 4,000 10,000 --- Fixed Price (US$/bbl) $45.00 $53.50 --- WTI 3-Way Option (2) Volumes (bbl/d) 17,500 10,500 2,000 Average Sold Put / Put / Sold Call (US$/bbl) $35/$45/$52 $48/$58/$68 $55/$66/$84 Total Hedge Volumes (bbl
Slide 15: 2022E Adjusted Funds Flow Sensitivities
2022E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $24.1 $15.1 Change of US$1.00/bbl WCS heavy oil differential $8.4 $3.3 Change of US$1.00/bbl MSW light oil differential $7.
Slide 16: Asset Overview
Asset Overview BIE
Slide 17: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 30,800 boe/d 17,600 boe/d 23,900 boe/d 1,800 boe/d (Gross; 9 Months 2021) Oil and NGLs 79% 90% 91% 82% (Gross; 9 Months 2021) 2P R
Slide 18: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • YTD 2021 production of LONGHORN 30,800 boe/d (79% liquids) Atascosa • YTD 2021 - 79 gross (20.6 SUGA
Slide 19: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Asset Level Free Cash Flow (1) (C$ millions) ~ 225 net 250 locations $1.0 billion cumulative asset level free cash flow since 2016 200 150 100 ~ 14 net wells $222 50 on- stream 0 $96 2022 Program Remaining
Slide 20: Viking Light Oil: Highly Prospective Sections
Viking Light Oil: 460 Highly Prospective Sections • Shallow (700 m), light oil (36° API) resource play • Produced 17,600 boe/d (90% oil) in first nine months of 2021 • Strong netbacks ~ $48/boe at US$65 WTI Kerrobert Plenty • YTD 2021 - $151 million Esther/Hoosier Greater Gleneath of asset level fre
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 90% 350 80 80% 300 70 70% 250 60% 60 200 50% Oil Rate (bbl/d) 50 40% 150 40 30% 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 • Produced 13,100 boe/d in first nine months of 2021 (85% oil) • Dominant 560 net sections • Nine net Bluesky multi-lateral Golden wells planned for 2022 Clearwater Lands Seal Harmon Valley • Strategic agreements with Peavine Métis Settlement cover 8
Slide 23: Northwest Clearwater: Extending the Trend
Northwest Clearwater: Extending the Trend Peavine 8 14-36 Pad 5-33 Pad 7 5 4 6 1 2 3 • > 500 net sections in the NW Clearwater fairway with > 120 prospective for Spirit River (Clearwater equivalent) • Executed second strategic land agreement with the Peavine Métis Settlement; increased land position
Slide 24: Northwest Clearwater – Promising Early Results with Strong Economics
Northwest Clearwater – Promising Early Results with Strong Economics Operations Update Top 10 Clearwater Wells (1) • Five producing wells Peak Calendar Rate No. UWI Current Operator • Production increased from zero at the (bbl/day) beginning of the year to > 2,300 bbl/d at its 1 102/11-31-078-15W5/0
Slide 25: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory • Produced 10,300 boe/d in first nine months of 2021 (98% oil) • Strong capital efficiencies Ardmore/Cold Lake • Applying multi-lateral horizontal drilling and production techniques Lindbergh Tangleflags Lloydminster • Long-life polymer
Slide 26: Heavy Oil Innovation
Heavy Oil Innovation Peace River Lloydminster Multi-Lateral Horizontal Horizontal Well Economics (1) WTI Oil Price $65/bbl $75/bbl WTI Oil Price $65/bbl $75/bbl Payout: 1.0 year 8 months Payout: 8 months 6 months IRR: 120% 223% IRR: 296% > 500% Recycle Ratio: 3.2x 3.9x Recycle Ratio: 2.8x 3.5x (1) I
Slide 27: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • ~ 200 sections of 100% WI lands • Eleven wells drilled to date have delineated a minimum of 100-125 sections • Produced 1,800 boe/d (82% liquids) in first nine months of 2021 Black Oil • Two wells onstream Q4/2021: 6-8 genera
Slide 28: 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 29: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG)
Slide 30: 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. 30
Slide 31: 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. 31
Slide 32: Our ESG Targets
Our ESG Targets Our Past Targets OUR TARGETS Our New Targets ‘Our new targets focus on our environmental and social challenges: WHAT WE ACHIEVED GHG EMISSIONS 30% reduction of our corporate GHG emission intensity (tonnes of CO,e per boe) by 2021 from our 2018 baseline.* ‘incorporating full year emis
Slide 33: Supplementary Information
Supplementary Information
Slide 34: 2022 Guidance and Cost Assumptions
2022 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $400 - $450 Production (boe/d) 80,000 – 83,000 Expenses: Royalty rate (%) 18.5% - 19.0% Operating ($/boe) $12.25 - $13.00 Transportation ($/boe) $1.20 - $1.30 General and administrative ($ millions) $43 ($1.45/b
Slide 35: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 Q2 2021 Q3 2021 Benchmark Prices WTI crude oil (US$/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 $70.56 NYMEX natural gas (US$/mcf)
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
Baytex Energy — Investor Presentation (December 2021) on 6ix