Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (December 2022)
40 slides from Baytex Energy's investor presentation, December 2022
Slide 1: Investor Presentation December 2022
Investor Presentation December 2022
Slide 2: Advisory
Advisory In this presentation, w e refer to certain specified financial and capital management measures w hich 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 det
Slide 3: 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 ▪ Strong capital efficiencies across portfolio ▪ > 125 net prospective sections in one of the most profitable pl
Slide 4: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE (1) Average Daily Volume 7 million Shares Outstanding (2) 546 million (2) Market Capitalization / Enterprise Value $3.7 billion / $4.8 billion Operating Statistics Production (Gross W.I.) (3) 86,000 – 89,000 boe/d PEACE RIVER/ Production Mix (3
Slide 5: YTD 2022 Highlights
YTD 2022 Highlights Meaningful Free Cash Flow, Strong Clearwater Drilling and Share Buy-Back Program Initiated YTD 2022 Highlights Meaningful Free Cash Flow and ▪ Generated free cash flow(1) of $478 million in the first nine months of 2022 Debt Reduction ($0.85 per basic share) ▪ Reduced net debt(2)
Slide 6: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 52% reduction in GHG 25% reduction in total emissions intensity through recordable injury frequency in 2021, relative to 2018 5 years baseline; 65% target in place Gas Conservation Indigenous Relations > 95% routine gas Recent agreements with conservation
Slide 7: Maintaining Capital Discipline and Driving Meaningful Free Cash Flow
Maintaining Capital Discipline and Driving Meaningful Free Cash Flow ▪ Production guidance (at mid-point) of 2023 Guidance 87,500 boe/d represents: E&D Expenditures $575- 650 million ▪ 4% annual production growth Production 86,000 - 89,000 boe/d ▪ 8% production per share growth(1) Oil and NGLs 85% ▪
Slide 8: Committed to Maintaining Strong Financial Flexibility
Committed to Maintaining Strong Financial Flexibility Net Debt(1) (September 30, 2022) $ millions • Strong liquidity Credit facilities (2) $450 • Credit facilities extended to 2026 Long-term notes $648 and increased to US$850 million Long-term debt $1,098 • Redeemed US$200 million long- Working Capi
Slide 9: Shareholder Return Framework
Shareholder Return Framework Committed to Enhancing Direct Shareholder Returns Free Cash Flow Allocation Action Status Phase 1 • 100% of free cash flow to debt • Reduced net debt by $648 million • Achieved May 2022 repayment until reaching $1.2 billion from December 2020 to May 2022 ✓ net debt Share
Slide 10: 2023 Free Cash Flow Generation and Shareholder Return Potential
2023 Free Cash Flow Generation and Shareholder Return Potential 2023 Free Cash Flow ($ millions)(1)(4) Targeted Free Cash Flow(1)(2)(3) to Share Buybacks 29% $2,000 Yield 22% $1,800 Yield 15% $1,600 Yield $1,050 Buybacks 8% $1,400 Yield $800 Buybacks $565 $1,200 FCF $300 C$ millions Buybacks FCF $1,
Slide 11: 5-Year Plan Generates $3.1B Cumulative Free Cash Flow
5-Year Plan @ US$80/bbl Generates $3.1B Cumulative Free Cash Flow Free Cash Flow (1) Profile (after-tax) Highlights of 5-Year Plan $3,500 Cumulative Free Cash Flow ($ millions) $3,000 • $3.1 billion cumulative free cash flow(1) $2,500 • Exploration and development $2,000 expenditures represent ~ 50%
Slide 12: 5-Year Plan Free Cash Flow Sensitivity and Shareholder Return Potential
5-Year Plan – Free Cash Flow(1) Sensitivity(2) and Shareholder Return Potential US$70 WTI US$80 WTI Cumulative Free Cash $2.3B Cumulative Free Cash $3.1B Free Cash Flow to be Returned to Shareholders $1.1B Free Cash Flow to be Returned to Shareholders $1.7B $800 1.0x $800 1.0x 0.8x 0.8x $600 $600 40
Slide 13: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Full-Year Q4/2022 H1/2023 H2/2023 2023 WTI Fixed Volumes (bbl/d) 10,000 --- --- --- Fixed Price (US$/bbl) $53.50 --- --- --- WTI 3-Way (1) Volumes (bbl/d) 10,500 9,500 9,500 9,500 Average Sold Put / Put / Sold Call (US$/bbl) $48/$58/68 $62/$78/$96 $62/$78/$96 $62/$78/$96 To
Slide 14: 2023E Adjusted Funds Flow Sensitivities
2023E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $28 $26 Change of US$1.00/bbl WCS heavy oil differential $13 $13 Change of US$1.00/bbl MSW light oil differential $7 $7
Slide 15: Asset Overview
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Slide 16: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 27,700 boe/d 16,800 boe/d 30,000 boe/d 2,400 boe/d (Gross; 9 Months 2022) Oil and NGLs 81% 88% 93% 83% (Gross; 9 Months 2022) 2P R
Slide 17: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with an average 25% W.I. Karnes • Produced 27,700 boe/d LONGHORN (81% liquids) YTD 2022 Atascosa • 9 Months 2022 - 56 gross (12.7 n
Slide 18: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Free Cash Flow (1) (C$ millions) 250 207 net $1.4 billion cumulative asset level locations 200 free cash flow since 2016 150 100 ~ 15 $318 net wells 50 on- stream 0 $332 2023 Program Remaining Undrilled In
Slide 19: Viking Light Oil: Highly Prospective Sections
Viking Light Oil: 460 Highly Prospective Sections • Shallow (700 m), light oil (36° API) resource play • Produced 16,800 boe/d (88% oil) YTD 2022 • Strong operating netback(1) ~ $66/boe at US$80 WTI Kerrobert Plenty • $250 million of asset Esther/Hoosier Greater Gleneath level free cash flow(1) Luck
Slide 20: Viking: High Netback Light Oil
Viking: High Netback Light Oil High Operating Netback (1) Light Oil ($/boe) 10 year drilling inventory (3) Strong price realizations, low cost structure and high free cash flow (1) ~ 1,500 net 1,600 locations 1,400 1,200 1,000 $120.00 800 $250MM 600 ~ 144 $185MM 400 net wells $100.00 200 on- stream
Slide 21: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development • Produced 12,700 boe/d YTD 2022 (84% oil) • Dominant 500 net sections • 10 net Bluesky multi-lateral wells planned for 2023 • Long life polymer flood at Seal Clearwater Seal • Strategic agreements with Harmon Valley Peavine Métis Settlement cover 80
Slide 22: Clearwater: Superior Well Performance and Economics
Clearwater: Superior Well Performance and Economics Clearwater Lands Top 15 Clearwater Wells (1) • > 500 net sections in the NW Clearwater fairway with > 125 prospective for Spirit Peak Calendar Rate No. UWI Current Operator (bbl/day) River (Clearwater equivalent) 1 100/01-30-078-15W5 BAYTEX 1,201 •
Slide 23: Clearwater: H1/2022 Program Accelerates Development
Clearwater: H1/2022 Program Accelerates Development Peavine 5-33 Pad 14-36 Pad 13-25 Pad 5-33 Pad • Q1/2022 – 4 wells onstream in March/April, with IP30’s of 300-450 bbl/d per well 4-25 Pad • September production ~ 1,600 bbl/d 4-25 Pad • 10 ERH wells drilled in 2022 14-36 Pad 13-25 Pad • 5 wells gen
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory • Produced 11,100 boe/d YTD 2022 (97% oil) • Strong capital efficiencies Ardmore/Cold Lake • Applying multi-lateral horizontal drilling and production techniques Lindbergh • Long-life water and polymer Tanglef lags Lloy dminster floods a
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Peace River Lloydminster Multi-Lateral Horizontal Horizontal Well Economics (1) WTI Oil Price US$70/bbl US$80/bbl US$90/bbl WTI Oil Price US$70/bbl US$80/bbl US$90/bbl Payout: 16 months 12 months 9 months Payout: 13 months 10 months 8 months IRR: 75% 121% 181% IRR: 113% 177% 259
Slide 26: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • Continue to advance the delineation of the Pembina Duvernay Shale • ~ 200 sections of 100% WI lands • 14 wells drilled to date have delineated a minimum of 100- 125 sections Black Oil • Produced 2,400 boe/d (83% liquids) YTD
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River Lloydminster Pembina Duvernay Formation Low er Eagle Ford Viking Bluesky Mannville Group Duvernay Upper Eagle Ford Clearw ater Austin Chalk 550-800 (Bluesky) Depth (metres) 3,300-3,900 700 500-600 (Clearw ater) 350-800 2,200-2,400 Oil API Oi
Slide 28: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG)
Slide 29: ESG at Baytex
ESG at Baytex As a responsible energy company, we take a sustainable approach to managing and developing our business into the future. We aspire to create an organization that future generations will be proud to be a part of. 29
Slide 30: How Focusing on ESG Creates Value
How Focusing on ESG Creates Value By incorporating environmental, social and governance factors into our business and reporting on our performance, we create value for shareholders and remain focused on advancing a responsible energy future. 30
Slide 31: Our ESG Scorecard
Our ESG Scorecard Continual improvement is an important element of our culture. We set short and long- term targets to address our impact on air, water, land and people. Each year, we report on our progress towards those targets. 31
Slide 32: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP. TSX
Slide 33: 2023 Guidance and Cost Assumptions
2023 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $575 - $650 Production (boe/d) 86,000 - 89,000 Expenses: Average royalty rate (%) (1) 20.0% - 22.0% Operating ($/boe) (2) $14.00 - $14.75 Transportation ($/boe) (2) $1.90 - $2.10 General and administrative ($ mi
Slide 34: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Benchm ark Prices WTI crude oil (US$/bbl) $57.84 $66.07 $70.56 $77.19 $67.92 $94.29 $108.41 $91.56 NYMEX natural gas (US$/mcf) $2.69 $2.83 $4.01 $5.83 $3.84 $4.95 $7.17 $8.20 Production Crude oil
Slide 35: Forward Looking Statements Advisory
Forward Looking Statements Advisory Any “f inancial outlook” or “f uture oriented f inancial inf ormation” in this presentation as def ined by applicable securities laws, has been approv ed by management of Baytex. Such financial outlook or f uture oriented f inancial inf ormation is prov ided f or
Slide 36: Forward Looking Statements Advisory (Cont.)
Forward Looking Statements Advisory (Cont.) These f orward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and diff erentials between light, medium and heavy oil prices; well production rates and reserv e v olumes; the ability t
Slide 37: Specified Financial Measures Advisory
Specified Financial Measures Advisory In this presentation, we ref er to certain specified f inancial measures (such as f ree cash flow, operating netback, total sales, net of blending and other expense, heav y oil sales, net of blending and other expense, and av erage roy alty rate) which do not ha
Slide 38: Capital Management Measures Advisory
Capital Management Measures Advisory This presentation contains the terms "adjusted funds flow", "net debt“, "net debt to adjusted f unds f low ratio" and “net debt to EBITDA” which are capital management measures. We believ e that inclusion of these specif ied f inancial measures prov ides usef ul
Slide 39: Advisory Regarding Oil and Gas Information
Advisory Regarding Oil and Gas Information The reserv es inf ormation contained in this presentation has been prepared in accordance with National Instrument 51-101 -Standards of Disclosure f or Oil and Gas Activities of the Canadian Securities Administrators ("NI 51-101"). The determination of oil
Slide 40: Contact Information
Contact Information Baytex Energy Corp. Eric T. Greager President and Chief Executive Officer Suite 2800, Centennial Place 587.952.3000 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 Chad L. Kalmakoff Toll Free 1.800.524.5521 Chief Financial Officer 587.952.3120 www.baytexenergy.com Brian G. Ector V
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