Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (February 2015)
39 slides from Baytex Energy's investor presentation, Feb 2, 2015
Slide 1: February Presentation
February 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: failure to realize the anticipated benefits of the acquisition of the Eagle Ford
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: 1,622,348 / US: 917,234 Shares Outstanding (Current) 168 million Market Capitalization / Enterprise Value $3.3 billion / $5.7 billion Total Monetary Debt (2) $2.4 billion Monthly Dividend / Dividend Yield (3
Slide 7: Three Key Resource Plays
Three Key Resource Plays Texas Eagle Ford 34% Peace River Texas - Q3/14 production ~ 34,000 34%- Q3/14 production ~26,000 boe/d boe/d Heavy Oil 51% - 14 net wells planned Light Oil for 2015 - 45-52 net wells planned for 22% 2015 - Developed via multi-lateral horizontal wells - Actively developing th
Slide 8: 2015 Capital Budget & Commentary
2015 Capital Budget & Commentary Capital Budget Amount Wells Drilled Operating Area ($ millions) (net) United States $450 - $500 45 – 52 Canada (1) $125 - $150 56 – 65 Total $575 - $650 101 - 117 Commentary - In response to the precipitous fall in WTI in recent months our 2015 capital budget reflect
Slide 9: Production Growth
Production Growth Production CAGR = 15% (per share CAGR = 6%) Production Breakdown 100,000 550 532 2015 Guidance 521 88,000 – 92,000 boe/d 80,000 500 NGLs 9% boe/d per thousand shares Gas Heavy Oil 462 18% 40% Heavy Oil 450 90,000 Light Oil 40% 60,000 450 33% NGLs 432 77,500 9% boe/d Natural Gas 18%
Slide 10: Reserves Growth / Contingent Resources
Reserves Growth / Contingent Resources Reserve CAGR = 17% (per share CAGR = 8%) 2P Reserve Breakdown (1) 500 3.0 Company Total = 432 MMboe 2.59 Gas NGLs 2.54 Heavy Oil 14% Gas 17% 2.40 2.5 53% 15% NGLs 400 NGLsLight17% 2.14 Oil 2.01 17%Gas16% Natural 2P Reserves (mmboe) 2.0 14% Heavy Oil Heavy Oil b
Slide 11: High Quality Investment Opportunities
High Quality Investment Opportunities Eagle Ford Peace River Lloydminster Well Cost ($ millions) US$8.0 $3.4 $1.0 Production (boe/d) IP30 1,000 – 1,200 300 - 500 70 - 80 % Liquids 60% - 70% 100% 100% Annual Capital Efficiencies (1) Break Even Oil Price (US$/bbl) (2) $47 $18,500 $16,000 $15,000 $41 $
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 $616 Unutilized Capacity, $448 $500 Long Term Debt, $1,381 $300 Bank Debt, $700 $0 $0 $9 $0 $0 $7 $0 2015 2016 2017 2018 2019 202
Slide 13: 2015 Funds from Operations Sensitivities
2015 Funds from Operations Sensitivities Estimated Effect on Estimated Effect on Annual Funds Flow Annual Funds Flow Sensitivities (including effect of hedging) ($ Millions) (Per Share) Change of US$1.00/bbl WTI crude oil $15.0 $0.09 Change of 1% WCS heavy oil differential $9.0 $0.05 Change of US$0.
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio H1 2015 H2 2015 2015 Fixed Hedges Volumes (bbl/d) 14,000 4,000 9,000 Hedge (%) (1) 29% 8% 18% Fixed Price ($US/bbl) $96.47 $95.98 $96.36 Floating Hedges Volumes (bbl/d) 5,822 1,656 3,739 Hedge (%) (1) 12% 3% 8% Floating Price ($US/bbl) (2) WTI + $11/bbl WTI + $10/bbl WTI +
Slide 15: The Eagle Ford
The Eagle Ford BANTEX
Slide 16: 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 17: 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 18: 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 19: Eagle Ford – Sub Play Economics
Eagle Ford – Sub Play Economics Sub-Play Analysis Type Well Breakeven Source: Wood Mackenzie. 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) Mave
Slide 20: Eagle Ford Development
Eagle Ford Development Development to date has targeted the Lower Eagle Ford - Originally developed at 80-acre spacing; current development is now 60-acre spacing (volatile oil) and 40-acre spacing (condensate gas) Extending Lower Eagle Ford / Austin Chalk success - YTD we are seeing an approximate
Slide 21: Eagle Ford Performance
Eagle Ford Performance Increasing Development Performance and Recovery - Continuous improvements in drilling and completion design have increased 30-day IP rates by approximately 97% since Q4/2011 with 180-day cumulative recovery increasing 57% over the same time period - Drilling times have decreas
Slide 22: Heavy Oil Overview
Heavy Oil Overview 22
Slide 23: Peace River Oil Sands
Peace River Oil Sands Multi-Lateral Drilling Drives Strong Capital Efficiencies Area Statistics Land Holdings 308 net sections Production (Q3/2014) 26,000 bbl/d 2P Reserves (YE13) (1) 114 mmbbls Drilling Inventory (2) ~ 5 years (1) 2P Reserve breakdown = 67 million barrels (primary) and 47 million
Slide 24: 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$65/bbl (1) Well Design ~ 12 laterals Comple
Slide 25: Lloydminster Heavy Oil
Lloydminster Lloydminster Heavy Oil Heavy Oil Shift to Horizontal Drilling Expands Inventory Area Statistics Land Position 730 net sections Production (Q3/2014) 20,000 boe/d 2P Reserves (YE13) (1) 114 mmbbls Drilling Inventory (2) ~ 6.5 years (1) Includes SAGD projects at Gemini (44 million barrel
Slide 26: Lloydminster Development
Lloydminster Development Reservoir Characteristics (1) Formation Mannville Group Depth 350 – 800 metres Completion Horizontal Slotted Liner / Vertical Stacked Pays Oil Quality 11 – 18 °API Average Porosity 30% Permeability 0.5 – 5.0 darcies Oil Saturation 70% Horizontal Well Economics at US$65/bbl
Slide 27: 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 28: Appendix: Crude Oil Marketing
Appendix: Crude Oil Marketing
Slide 29: WCS Heavy Oil Differentials
WCS Heavy Oil Differentials - Forward market for 2015 suggests a WCS differential ~ US$15.25/bbl - Positive catalysts in 2014 have contributed to lower differentials and stronger heavy oil pricing - BP Whiting repositioning adds ~ 250,000 bbl/d of heavy oil demand - Enbridge Flanagan South pipeline;
Slide 30: Heavy Oil Differential – WCS and Maya
Heavy Oil Differential – WCS and Maya 30
Slide 31: Crude by Rail in Western Canada
Crude by Rail in Western Canada Industry Outlook Major Loading Terminals - Rail is playing a meaningful role in the transportation of crude oil in Western Canada as major pipeline expansions are unlikely to be in place for many years. - Significant infrastructure investment suggests growth in rail c
Slide 32: Marketing - Crude by Rail
Marketing - Crude by Rail Rail a Key Component of Market Access - Trucking flexibility helps optimize value of production - Rail has become an effective vehicle for management of heavy oil differentials - Undiluted heavy oil sales provide Baytex with a sustainable competitive advantage Baytex Heavy
Slide 33: Midstream Heavy Oil Fundamentals – Infrastructure Development
Midstream Heavy Oil Fundamentals – Infrastructure Development Longer-Term Pipeline Initiatives Capacity Targeted In- Pipeline (mbbl/d) Service Date Enbridge AB Clipper Expansion 350 Q3/15 Trans Mountain Expansion 590 Q4/17 TransCanada Keystone XL 830 2017 Enbridge Northern Gateway 525 Q3/18 TransCan
Slide 34: U.S. Gulf Coast Heavy Oil Demand
U.S. Gulf Coast HeavyUS OilGulf Coast Heavy Oil Demand Demand • U.S. imports of Canadian heavy oil rose • Total U.S. heavy oil imports averaged to 1.93 mb/d in July 2014, and has 3.94 million bbl/d over 2014 YTD, 43% averaged 1.71 mb/d over 2014 YTD originated from Canada • Market penetration to U.S
Slide 35: Supplementary Information - Financial
Supplementary Information - Financial 35
Slide 36: Other Commodities / FOREX Hedge Coverage
Other Commodities / FOREX Hedge Coverage Q4/2014 Q1/2014 FY 2015 Natural Gas % of Volumes Hedged at Fixed Price (1) 42% 32% 12% Average Fixed Price (US$/mmBtu) 4.15 4.19 4.19 % of Volumes Hedged Using Collars (1) 12% 0% 0% Average Collar Floor/Ceiling 3.90/4.50 - - Foreign Exchange % of Foreign Exch
Slide 37: Share Ownership Breakdown
Share Ownership Breakdown Institutional - Retail - U.S. Institutional - Ownership Breakdown Europe / Asia 7% U.S. 4% 11% Institutional 57% Insiders 2% Retail 41% Insiders 2% 100% Retail - Institutional - Canada 76% Canada Canada 34% 42% U.S. 18% Europe/Asia 4% Insiders 2% 100% Baytex shareholder bas
Slide 38: Capital Program Efficiency
Capital Program Efficiency 3-Year 2011 2012 2013 Average 2011-13 Capital Expenditures ($millions) Exploration and development 367.9 418.6 550.9 1,337.4 Acquisitions (net of dispositions) 148.8 (170.9) (39.1) (61.2) Total 516.6 247.7 511.8 1,276.1 Proved plus Probable Reserve Additions (mboe) Explora
Slide 39: 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
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