Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (September 2016)
32 slides from Baytex Energy's investor presentation, September 2016
Slide 1: September Presentation
September 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: the volatility of natural gas prices; further declines or an extended period of t
Slide 4: Advisory (Cont.): Non-GAAP Financial Measures
Advisory (Cont.) Non-GAAP Financial Measures This presentation refers to funds from operations, net debt, operating netback and Bank EBITDA, which do not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP"). We define funds from operations ("FFO") a
Slide 5: Baytex Key Attributes
Baytex Key Attributes Making the Right Choices In a Low Oil Price Environment Pro-actively worked with our bank lending Cost reduction focus syndicate to provide across all facets of our increased financial organization while flexibility; targeting capital maintaining efficiency in expenditures to M
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX / NYSE: BTE Average Daily Volume (1) CAN: 9,500,000 / US: 2,400,000 Shares Outstanding 211.5 million Market Capitalization / Enterprise Value $1.3 billion / $3.2 billion Net Debt (2) $1.9 billion Corporate Summary Production (3) 67,000 – 69,000 boe/
Slide 7: Three Key Resource Plays
Three Key Resource Plays Texas 34% Eagle Ford Texas 34% Peace River Heavy Oil Q2/16 production of 13,100 Q2/16 production of boe/d Light Oil 51% 38,300 boe/d 22% Developed via multi-lateral Expect to bring ~ 30 net horizontal wells with strong wells on production in capital efficiencies 2016
Slide 8: H1 2016 Highlights
H1 2016 Highlights Generated production of 72,902 boe/d (78% oil and NGL) Curtailed capital spending, focusing all development activity in the Eagle Ford, our highest rate of return and highest netback asset Reinitiated production from heavy oil wells shut-in during the first quarter of 2016 d
Slide 9: Balance Sheet / Debt Composition
Balance Sheet / Debt Composition At June 30, 2016, long-term debt (bank loan and long-term notes) totaled $1.9 billion and we were 46% drawn on our credit facilities. Credit Capacity $2.3 Billion Long-Term Notes Maturity Schedule ($ Millions) Debt composition as at June 30, 2016. We have secured r
Slide 10: Financial Covenant Flexibility
Financial Covenant Flexibility Baytex Position as at June 30, 2016 Senior Secured Debt (1) to Bank EBITDA (2) 0.86 : 1.00 Interest Coverage (3) 4.05 : 1.00 Ratio for the Quarter(s) ending: March 31, 2016 to June 30, 2018 to December 31, 2018 Thereafter March 31, 2018 September 30, 2018 Senior Secure
Slide 11: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Q3/2016 Q4/2016 H2 2016 2017 2018 WTI Fixed Hedges Volumes (bbl/d) 5,000 5,000 5,000 --- --- Fixed Price (US$/bbl) $63.79 $63.79 $63.79 --- --- WTI 3-Way Option Volumes (bbl/d) 10,000 10,000 10,000 10,000 --- Average Ceiling/Floor/Sold Floor $60/$50/$40 $60/$50/$40 $60/$50/
Slide 12: Natural Gas Hedge Portfolio
Natural Gas Hedge Portfolio Full-Year Full-Year Q3/2016 Q4/2016 H2 2016 2017 2018 AECO Fixed Hedges Volumes (GJ/day) 32,500 32,500 32,500 12,500 5,000 Price (C$/GJ) $2.39 $2.39 $2.39 $2.65 $2.17 NYMEX Fixed Hedges Volumes (mmbtu/d) 15,000 15,000 15,000 17,500 7,500 Price (US$/mmbtu) $2.98 $2.98 $2.9
Slide 13: Strong Capital Efficiencies – Driving Down Costs
Strong Capital Efficiencies – Driving Down Costs Costs in the Eagle Ford have continued to decrease with wells now being drilled, completed and equipped for approximately US$5.4 million, as compared to US$8.2 million in late 2014 Despite achieving cost reductions of approximately 20% in Canada,
Slide 14: Attractive Rates of Return
Attractive Rates of Return 175% 150% Eagle Ford - US$5.4M/well Rate of Return (1) (2) (3) Peace River - C$2.8M/well 125% Lloydminster - C$750K/well Break-Even WTI (4) 100% 75% 50% 25% 0% $45 $50 $55 $60 $65 $70 WTI (US$/bbl) (1) Individual well economics are based on constant pricing and costs. Pric
Slide 15: High Quality Investment Opportunities
High Quality Investment Opportunities Single Well Economics Eagle Ford Peace River Lloydminster Well Costs – DC&E (1) ($ millions) US$5.4 $2.8 $0.75 Production (boe/d) IP30 1,000 - 1,200 300 - 500 70 - 80 % Liquids 60% - 70% 100% 100% EUR (2) (mboe) 800 300 70 Single Well Economics @ US$50/bbl (cons
Slide 16: The Eagle Ford
The Eagle Ford BANTEX
Slide 17: Baytex Acreage Position
Baytex Acreage Position The Eagle Ford Provides Baytex With Exposure to a World Class Oil Resource Play Overview of Acreage 20,200 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 to fac
Slide 18: Eagle Ford Development
Eagle Ford Development Significant advancements have been made to delineate the multi-zone development potential of our Sugarkane acreage Commenced production from 20 wells in Q2/2016 (10% Upper Eagle Ford, 50% Lower Eagle Ford, 40% Austin Chalk) A total of 20 wells established 30-day IP rates
Slide 19: Eagle Ford “Stack and Frac” Highlights
Eagle Ford “Stack and Frac” Highlights Chapman Rogers - Q4 2015 Sienkiewicz - Q2 2015 5 well pad 5 well pad Avg 30 day IPs Avg 30 day IPs ~1,164 boepd ~1,575 boepd 13 Multi-Zone Projects in Various Stages of Execution and Development Foster – Q1 2016 5 well pad Urrutia - Q2 2015 Avg 30 day IPs 3 wel
Slide 20: Eagle Ford Performance
Eagle Ford Performance Increasing Performance and Efficiency Improvements in drilling and completion design have increased 30-day IP rates by approximately 100% since Q4/2011 with 180-day cumulative recovery increasing 74% over the same time period Drilling times have decreased by 63% since Q4/2
Slide 21: Completion Improvements
Completion Improvements Increasing Lateral Length, Frac Stages and Proppant Lateral Length and Total Depth Per Well Frac Stages and Proppant Per Well 21
Slide 22: Pricing Exposure
Pricing Exposure The Eagle Ford Significantly Enhances Our Operating Netback Our light oil and condensate production in the Eagle Ford is priced primarily off a Louisiana Light Sweet (LLS) benchmark, which typically trades at a premium to WTI. Strong waterborne pricing, combined with low cash co
Slide 23: Heavy Oil Overview
Heavy Oil Overview 23
Slide 24: Peace River Oil Sands
Peace River Oil Sands Multi-Lateral Drilling Drives Strong Capital Efficiencies Area Statistics Land Holdings 338 net sections Production (Q2/2016) 13,100 boe/d 2P Reserves (YE15) (1) 73.6 mmboe Drilling Inventory (2) 7.5 years (1) In addition, we have 18.2 mmbbl of bitumen reserves related to our
Slide 25: 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 (1) Well Design ~ 12 laterals Completed Well Cost
Slide 26: Lloydminster Heavy Oil
Lloydminster Lloydminster Heavy Oil Heavy Oil Shift to Horizontal Drilling Expands Inventory Area Statistics Land Position 652 net sections Production (Q2/2016) 10,200 boe/d 2P Reserves (YE15) (1) 33.2 mmboe Drilling Inventory (2) ~ 7.5 years (1) In addition, we have 43.4 mmbbl of bitumen reserves
Slide 27: 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 (1) Complete
Slide 28: Summary
Summary We are well positioned to benefit from an oil price recovery Retain significant leverage to a rising crude oil price environment Exceptional asset base focused on crude oil & liquids Significant inventory of development projects Advancing multi-zone potential of Eagle Ford acreage
Slide 29: Supplementary Information
Supplementary Information 29
Slide 30: 2016 Funds from Operations Sensitivities
2016 Funds from Operations Sensitivities Estimated Effect on Annual Funds from Operations ($ Millions) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $17.8 $15.1 Change of US$1.00/bbl WCS heavy oil differential $9.7 $7.4 Change of US$0.25/mcf NYMEX natural gas $7
Slide 31: Capital Program Efficiency
Capital Program Efficiency 3-Year 2013 2014 2015 Total / Average 2013-15 Capital Expenditures ($millions) Exploration and development 550.9 766.1 521.0 1,838.0 Acquisitions (net of dispositions) (39.1) 2,545.1 1.6 2,507.7 Total 511.8 3,311.2 522.7 4,345.7 Proved plus Probable Reserve Additions (mboe
Slide 32: Contact Information
Contact Information Suite 2800, Centennial Place James L. Bowzer 520 – 3rd Avenue S.W. 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 President, Cap
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