Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (June 2024)
36 slides from Baytex Energy's investor presentation, June 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION CREATING ENERGY | CREATING VALUE June 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: 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: 10.4 million | US: 9.2 million Shares Outstanding (2) 811 million Market Capitalization / Enterprise Value (3) $4.1 billion / $6.7 billion Annual Dividend per Share | Dividend Yiel
Slide 4: Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns
INVESTMENT HIGHLIGHTS 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 organi
Slide 5: Q1/2024 Highlights
Q1/2024 HIGHLIGHTS Expect to deliver substantial free cash flow(1) and shareholder returns over the next three quarters Production and E&D expenditures consistent with full-year plan Strong Execution Executed $413 million E&D expenditures program, largest in company history, which at its peak, had 1
Slide 6: Creating Shareholder Value
CREATING SHAREHOLDER VALUE Delivering production per share growth while improving financial leverage Production (boe/d) per thousand shares Total debt(1) to Bank EBITDA(1)(2) 0.20 4.5x 0.19 4.0x 0.18 15% increase from Q1/2023 3.5x 0.17 45% increase from Q4/2020 Committed to further de-leveraging 3.0
Slide 7: 2024 Outlook
2024 OUTLOOK Disciplined 153,000 boe/d 2024 mid-point production Reinvestment and Capital Allocation 2024 Guidance E&D Expenditures $1.2 - $1.3 billion Execute an exploration and development Production 150,000 - 156,000 boe/d program of $1.2 to $1.3 billion Oil and NGLs 84% 2024 priorities: Deliver
Slide 8: 2024 Return of Capital
2024 RETURN OF CAPITAL Return 50% of free cash flow(1) to shareholders Free Cash Flow Priorities Return of Capital(1) and Strengthening Balance Sheet 2024 Free Cash Flow(1) Sensitivity(2) $1,400 Share Buybacks $1,200 (3) Share count reduced by 5.5% since June 2023 $1,000 $800 $MM $600 Base Dividend
Slide 9: 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 development Annual E&D expenditures of $1.2 to $1.4 economics and > 10 years of drilling inventory billion drives mean
Slide 10: Five-Year Outlook: Shareholder Returns
FIVE-YEAR OUTLOOK: 2024 - 2028 Shareholder Returns(1) Compelling Returns Profile Underpinned by disciplined reinvestment and capital allocation Return of Capital(2) to Shareholders over Five-Year Free Cash Flow(1)(2) over Five-Year Outlook ($ millions) Outlook(1) ($ millions) $7,000 $4,500 $4,000 $6
Slide 11: Highly Economic Portfolio
HIGHLY ECONOMIC PORTFOLIO Strong drilling economics across portfolio Portfolio at US$75 WTI (1)(2) CROCI (3) > 1.75x Payouts < 18 Months IRRs > 65% Eagle Ford Duvernay Viking Clearwater > 500% Heavy Oil 0.0x 2.0x 4.0x 0 10 20 0% 50% 100% 150% (1) Individual well economics based on constant pricing a
Slide 12: Crude Oil Hedge Portfolio
CRUDE OIL HEDGE PORTFOLIO Balanced Approach to Risk Management Target 40% of 50,000 Hedged Volumes (bbl/d) 40,000 ~ 40% ~ 40% ~ 40% Net Crude Oil 30,000 ~ 30% Volumes(1) 20,000 ~ 15% 10,000 0 Disciplined hedge program to help mitigate Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 volatility in revenue due
Slide 13: Maintaining Financial Strength
MAINTAINING FINANCIAL STRENGTH Commitment to a Strong Balance Sheet Pro Forma Total Debt (1)(2) (April 1, 2024) C$ millions Term maturity of long-term Credit facilities (3) $671 notes extended at lower Long-term notes coupon 8.500% notes due April 1, 2030 $1,087 Strong liquidity with ~55% unutilized
Slide 14: Adjusted Funds Flow Sensitivities
ADJUSTED FUNDS FLOW SENSITIVITIES Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Change of US$5.00/bbl WTI crude oil $215 Change of US$1.00/bbl WCS heavy oil differential $15 Change of US$0.50/MMbtu NYMEX natural gas $19 Change of $0.01 in the C$/US$ exchange rate $18 (1) Capi
Slide 15: Asset Overview
——————_—. erase 71a SL nl Se a °o ae od} oO 4 a is a x a 5 Ke a ASSET OVERVIEW
Slide 16: Business Unit Highlights
BUSINESS UNIT HIGHLIGHTS w Light Oil – USA Light Oil – Canada Heavy Oil – Canada (Eagle Ford) (Viking/Duvernay) (Peace River/Peavine/ Lloydminster) Production (2024E) ~ 92,000 boe/d ~ 17,000 boe/d ~ 40,000 boe/d % Liquids 81% 84% 95% Land (net acres) 182,000 311,000 710,000 2P Reserves (Gross) (1) 4
Slide 17: U.S. Light Oil: Eagle Ford
U.S. LIGHT OIL: EAGLE FORD Strong Operating Capability Increased Scale in a Premier Basin with Strong Market Access LEE BASTROP FAYETTE CALDWELL 92,000 boe/d Tigers Eye / McRib Pads 2024E production 4 LEF W ells Average 30-day IP: GUADALUPE 1,500 Boe/d 87% oil and NGLs Eagle Ford OPERATED GONZALES L
Slide 18: U.S. Light Oil: Operated Eagle Ford
U.S. LIGHT OIL: OPERATED EAGLE FORD Low er Eagle Ford Wells Onstream – Last 9 Months Wells 30-day Peak Rate % Crude Oil and Well Onstream 3-Phase (boe/d) NGLs Q3 2023 13 1,500 78% Strong results across thermal Q4 2023 9 1,600 80% maturity windows Q1 2024 10 1,300 85% black & volatile oil and condens
Slide 19: Canada Light Oil: Pembina Duvernay / Viking
CANADA LIGHT OIL: PEMBINA DUVERNAY / VIKING High netback light oil with strong asset level free cash flow(1) Pembina Duvernay Shale is a potential growth asset in the Canadian portfolio Pembina Duvernay Viking 142 net sections 344 net sections Demonstration-stage light oil resource play Stable produ
Slide 20: Canada Heavy Oil: Peace River / Peavine / Lloydminster
CANADA HEAVY OIL: PEACE RIVER / PEAVINE / LLOYDMINSTER Innovative Multi-Lateral Drilling and Top-Tier Efficiencies Clearwater at Peavine Delivers Exceptional Well Performance and Economics Peace River (Bluesky) PEACE RIVER 514 net sections Produced 11,200 boe/d in Q1/2024 (85% oil) Expect to bring 9
Slide 21: Canada Heavy Oil: Land Extensions
CANADA HEAVY OIL: LAND EXTENSIONS Leveraging heavy oil expertise and recent exploration success Peace River (Clearwater + Bluesky) Lloydminster (Mannville) 10-section agreement with the Peavine Métis Settlement Farm-in agreement on 17.75 sections of land near Cold Lake brings total land position to
Slide 22: Environment, Social and Governance (ESG)
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
Slide 23: ESG Highlights
ESG HIGHLIGHTS Our vision is to be a leader in the responsible production of energy the world needs for the future GHG Emission Reduction Safety 65% reduction in GHG emissions 17% reduction in total recordable intensity through 2023, relative to injury frequency in 5 years 2018 baseline Abandonment
Slide 24: Our ESG Scorecard
OUR ESG SCORECARD (1) Continuous improvement is an important element of our culture. We set short and long-term targets to address our impacts on air, water, land, and people (1) 2023 ESG and TCFD reports expected to be released in July 2024. B AYT EX EN ERGY / N YSE / T SX B TE 24
Slide 25: Supplementary Information
SUPPLEMENTARY INFORMATION BAYTEXENERGY.COM
Slide 26: Board of Directors
BOARD OF DIRECTORS Efficient and Independent Board Complementary Skills Suited to Govern the Combined Business Eric T. Greager Mark R. Bly President and Chair of the CEO Board Tiffany (“T.J.”) Trudy M. Don G. Angela Jennifer A. Dav e L. Stev e D.L. Jeffrey E. Cepak Curran Hrap Lekatsas Maki Pearce R
Slide 27: Free Cash Flow Allocation Policy
FREE CASH FLOW ALLOCATION POLICY Direct shareholder returns at 50% of free cash flow(1) Total Debt(2) Above $1.5 billion Total Debt(2) Below $1.5 billion Adjusted Funds Flow(3) Less: Exploration and Development Expenditures Less: Abandonment and Reclamation / Leasing Expenditures Shareholder returns
Slide 28: Summary of Operating and Financial Metrics
SUMMARY OF OPERATING AND FINANCIAL METRICS Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Benchmark Prices WTI crude oil (US$/bbl) $94.29 $108.41 $91.56 $82.64 $94.23 $76.13 $73.78 $82.26 $78.32 $77.62 $76.96 NY MEX natural gas (US$/MMbtu) $4.95 $7.17 $8.20 $6.26 $
Slide 29: 2024 Guidance and Cost Assumptions
2024 GUIDANCE AND COST ASSUMPTIONS Exploration and development expenditures ($ billions) $1.2 - $1.3 Production (boe/d) 150,000 - 156,000 Expenses: Average royalty rate (%) (1) ~ 23% Operating ($/boe) (2) $11.25 - $12.00 Transportation ($/boe) (2) $2.35 - $2.55 General and administrative ($ millions
Slide 30: 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 asse ssment of future plans and operations, certain statements in this presentation are "forward-looking statements" within th
Slide 31: 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 32: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) Financial Outlook Adv isory 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 dev
Slide 33: 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 34: 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 35: 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
Slide 36: Contact Information
CONTACT INFORMATION BAYTEX ENERGY CORP. Suite 2800, Centennial Place 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 TF 1.800.524.5521 Eric T. Greager President and Chief Executive Officer Chad L. Kalm akoff Chief Financial Officer Chad E. Lundberg Chief Operating Officer Brian G. Ector Senior Vice P