Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (April 2015)
35 slides from Baytex Energy's investor presentation, Apr 16, 2015
Slide 1: April Presentation
April Presentation BAYTEX
Slide 2: Advisory: Forward-Looking Statements
Advisory Forward-Looking Statements In the interest of providing Baytex's shareholders and potential investors with information regarding Baytex, including management's assessment of Baytex's future plans and operations, certain statements made by the presenter and contained in these presentation ma
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: declines in oil and natural gas prices; risks related to the accessibility, avail
Slide 4: Advisory (Cont.)
Advisory (Cont.) A range of contingent resources estimates (low, best and high) were prepared by Sproule and McDaniel. A low estimate (C1) is considered to be a conservative estimate of the quantity of the resources that will actually be recovered. It is likely that the actual remaining quantities r
Slide 5: Baytex Key Attributes
Baytex Key Attributes North American Oil Focused Producer Operating for Over 20 Years - Focus on per share growth in production, cash flow and reserves Exceptional - Production growth focused on crude oil and liquids Growth Platform - Significant inventory of development prospects - Sector leading e
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX / NYSE: BTE Average Daily Volume (1) CAN: 4,421,248 / US: 1,366,118 Shares Outstanding (Pro Forma Equity Issue) 205 million Market Capitalization / Enterprise Value $4.2 billion / $5.9 billion Total Monetary Debt (2) $1.7 billion Monthly Dividend /
Slide 7: Three Key Resource Plays
Three Key Resource Plays Texas Eagle Ford 34% Peace River Texas Q4/14 production of 34% Q4/14 production of ~38,050 boe/d ~25,700 boe/d Heavy Oil 51% Light Oil 39-45 net wells planned ~8 net wells planned for 22% for 2015 2015 Actively developing the Developed via multi-lateral Lower Eag
Slide 8: 2015 Capital Budget & Commentary
2015 Capital Budget & Commentary Capital Budget (February 2015) Amount Wells Drilled Operating Area ($ millions) (net) United States $400 - $450 39 – 45 Canada (1) $100 - $125 35 – 48 Total $500 - $575 74 - 93 (1) Includes 8 - 12 stratigraphic and service wells Commentary - In response to the precip
Slide 9: Production Growth
Production Growth Production Breakdown 5 Year Production CAGR = 14% 2015 Guidance 100,000 (per share CAGR = 2%) 84,000 – 88,000 boe/d NGLs Gas 9% 80,000 18% Light Oil Heavy OilOil Heavy 33% 40% 40% 86,000 60,000 Natural Gas NGLs 18% 9% boe/d 78,321 40,000 57,196 50,132 53,986 Production by Region 20
Slide 10: Reserves Growth / Contingent Resources
Reserves Growth / Contingent Resources 5 Year Reserve CAGR = 17% 2P Reserve Breakdown 500 (per share CAGR = 7%) Company Total = 432 MMboe Gas NGLs Heavy Oil 14% Gas 17% 53% 15% 400 NGLsNGLsNGLs Light Oil 22% 17% 17% 16% Natural Gas 2P Reserves (mmboe) 432 Natural Gas 16% HeavyHeavy Oil Oil 16% 48% 5
Slide 11: High Quality Investment Opportunities
High Quality Investment Opportunities Eagle Ford Peace River Lloydminster Well Costs ($ millions) US$6.9 $2.9 $0.8 Production (boe/d) IP30 1,000 – 1,200 300 - 500 70 - 80 % Liquids 60% - 70% 100% 100% Annual Capital Efficiencies (1) Break Even Oil Price (US$/bbl) (2) $47 $16,000 $41 $40 $13,500 $12,
Slide 12: Balance Sheet Strength
Balance Sheet Strength Debt Composition Long-Term Debt Maturity Schedule ($ millions) ($ millions) Credit Capacity $2.6 billion No material repayments required until 2021 $638 Unutilized $464 Capacity Long Term $1,170 Debt $1,400 $300 $0 $0 $0 $0 $0 $7 $0 Bank Debt $65 2015 2016 2017 2018 2019 2020
Slide 13: 2015 Funds from Operations Sensitivities
2015 Funds from Operations Sensitivities Estimated Effect on Estimated Effect on Annual Funds Flow Annual Funds Flow Sensitivities (excluding effect of hedging) ($ Millions) (Per Share) Change of US$1.00/bbl WTI crude oil $20.0 $0.10 Change of US$1.00/bbl WCS heavy oil differential $11.0 $0.06 Chang
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Q1/2015 Q2/2015 Q3/2015 Q4/2015 2015 Fixed Hedges Volumes (bbl/d) 20,464 12,059 4,000 4,000 10,131 Hedge (%) (1) 43% 26% 9% 9% 22% Fixed Price ($US/bbl) $93.19 $90.56 $95.98 $95.98 $92.96 Floating Hedges Volumes (bbl/d) 3,697 3,261 3,312 -- 2,567 Hedge (%) (1) 8% 7% 7% -- 5
Slide 15: Pricing Exposure
Pricing Exposure At US$50/bbl WTI, the Eagle Ford Enhances Our Operating Netback by Approximately 60% - Our light oil and condensate production in the Q4/2014 Operating Netback Eagle Ford is priced primarily off a Louisiana Light Sweet (LLS) benchmark, which typically Eagle trades at a premium to WT
Slide 16: The Eagle Ford
The Eagle Ford BANTEX
Slide 17: Eagle Ford Acreage Position
Eagle Ford Acreage Position The Eagle Ford Provides Baytex With Exposure to a World Class Oil Resource Play Overview of Acreage - 23,000 net contiguous acres in the Sugarkane Field in the core of the liquids-rich Eagle Ford shale. - The Sugarkane Field has been largely delineated which is expected t
Slide 18: Eagle Ford – Gas/Liquids Window Map
Eagle Ford – Gas/Liquids Window Map Nine Eagle Ford Sub-Play Areas Eagle Ford Play Eagle Ford Play • Study based on production information received from the Texas Railroad Commission as of April 2014 • Over 8,500 wells included in the analysis • Excludes Austin Chalk, Olmos, Pearsall etc. Wood Macke
Slide 19: Eagle Ford - Wells Completed 2009 to 2014
Eagle Ford - Wells Completed 2009 to 2014 Wood Mackenzie breaks the Eagle Ford into nine distinct sub-play areas: (1) Northeast Oil, (2) Black Oil, (3) Karnes Trough Condensate, (4) Edwards Condensate, (5) Southeast Gas, (6) Southwest Gas, (7) Maverick Condensate, (8) Maverick Oil and (9) Hawkville
Slide 20: Eagle Ford – Sub Play Economics
Eagle Ford – Sub Play Economics Sub-Play Analysis Type Well Breakeven Source: Wood Mackenzie Notes Wood Mackenzie breaks the Eagle Ford into nine distinct sub-play areas: (1) Northeast Oil, (2) Black Oil, (3) Karnes Trough Condensate, (4) Edwards Condensate, (5) Southeast Gas, (6) Southwest Gas, (7)
Slide 21: Eagle Ford Development
Eagle Ford Development Development to date has targeted the Lower Eagle Ford - Development occurring at 40-acre and 60- acre spacing - We are seeing an approximate 22% improvement in 30-day IP rates since acquisition Extending Lower Eagle Ford Success - Austin Chalk now delineated on over 50% of our
Slide 22: Eagle Ford Performance
Eagle Ford Performance Increasing Performance and Efficiency - Continuous improvements in drilling and completion design have increased 30-day IP rates by approximately 68% since Q4/2011 with 180-day cumulative recovery increasing 52% over the same time period - Drilling times have decreased by 55%
Slide 23: Completion Improvements
Completion Improvements Increasing Lateral Length, Frac Stages and Proppant - Since 2011, the average lateral length per well has increased 16% to approximately 5,600 feet, the number of frac stages per well has increased 44% to 23 stages and the amount of total proppant per well has increased 48% t
Slide 24: Heavy Oil Overview
Heavy Oil Overview 24
Slide 25: Peace River Oil Sands
Peace River Oil Sands Multi-Lateral Drilling Drives Strong Capital Efficiencies Area Statistics Land Holdings 310 net sections Production (Q4/2014) 25,700 boe/d 2P Reserves (YE14) (1) 72.6 mmboe Drilling Inventory (2) 6.5 years (1) In addition, we have 38 mmbbl of bitumen reserves related to our t
Slide 26: Multi-Lateral Cold Horizontal Wells
Multi-Lateral Cold Horizontal Wells Reservoir Characteristics (1) Formation Bluesky Depth ~ 600 metres Completion Open Hole Oil Quality 11 °API Average Porosity 28% Permeability 1 - 5 darcies Oil Saturation 70% Recovery Factor 5 - 7% Well Economics at US$50/bbl (1) Well Design ~ 12 laterals Comple
Slide 27: Lloydminster Heavy Oil
Lloydminster Lloydminster Heavy Oil Heavy Oil Shift to Horizontal Drilling Expands Inventory Area Statistics Land Position 652 net sections Production (Q4/2014) 18,500 boe/d 2P Reserves (YE14) (1) 49.5 mmboe Drilling Inventory (2) ~ 6.5 years (1) In addition, we have 43.4 mmbbl of bitumen reserves
Slide 28: Lloydminster Development
Lloydminster Development Reservoir Characteristics (1) Formation Mannville Group Depth 350 – 800 metres Completion Horizontal Slotted Liner / Vertical Stacked Pays Oil Quality 10 – 16 °API Average Porosity 30% Permeability 0.5 – 5.0 darcies Oil Saturation 70% Horizontal Well Economics at US$50/bbl
Slide 29: Why Invest in Baytex?
Why Invest in Baytex? Superior Asset Base Total Return Focus Proven Track Record Significant inventory of high Value creation via Long-term track record of quality, low risk, oil- profitable growth and value creation and focused development income business model operational excellence location
Slide 30: Supplementary Information
Supplementary Information 30
Slide 31: Natural Gas / FOREX Hedge Coverage
Natural Gas / FOREX Hedge Coverage Q1/2015 Q2/2015 Q3/2015 Q4/2015 2015 Natural Gas AECO Volumes Hedged (mmbtu/day) 20,836 4,735 4,735 4,735 8,761 % of Volumes Hedged at Fixed Price (1) 28% 6% 6% 6% 12% Average AECO Swap Price (C$/GJ) $4.00 $2.80 $2.80 $2.80 $3.51 NYMEX Volumes Hedged (mmbtu/day) 22
Slide 32: Marketing - Crude by Rail
Marketing - Crude by Rail Rail a Key Component of Market Access - Trucking flexibility helps optimize value of production - Rail has become an effective vehicle for management of heavy oil differentials - Undiluted heavy oil sales provide Baytex with a sustainable competitive advantage Baytex Heavy
Slide 33: Share Ownership Breakdown
Share Ownership Breakdown Ownership Breakdown Institutional - Europe / Asia Institutional 62% Institutional - 3% U.S. 13% Retail 38% Retail - Canada 32% 100% Institutional - Canada 78% Retail - U.S. Canada 6% 46% U.S. 19% Europe/Asia 3% 100% Baytex shareholder base, estimated as at December 31, 2014
Slide 34: Capital Program Efficiency
Capital Program Efficiency 3-Year 2012 2013 2014 Average 2012-14 Capital Expenditures ($millions) Exploration and development 418.6 550.9 766.1 1,735.6 Acquisitions (net of dispositions) (170.9) (39.1) 2,545.1 2,335.1 Total 247.7 511.8 3,311.2 4,070.7 Proved plus Probable Reserve Additions (mboe) Ex
Slide 35: Contact Information
Contact Information Suite 2800, Centennial Place James L. Bowzer 520 – 3rd Avenue S.W. President & Chief Executive Officer Calgary, Alberta T2P 0R3 (587) 952-3000 T: (587) 952-3000 1-800-524-5521 Rodney D. Gray www.baytexenergy.com Chief Financial Officer (587) 952-3160 Brian G. Ector Senior Vice Pr