Baytex Energy Corp. · TSX:BTE

Baytex Energy — Bank of America Merrill Lynch 2016 Energy Credit Conference

25 slides from Baytex Energy's conference presentation, Jun 8, 2016

  1. Slide 1: Bank of America Merrill Lynch 2016 Energy Credit Conference

    Bank of America Merrill Lynch 2016 Energy Credit Conference New York, New York, June 8, 2016 Rod Gray Chief Financial Officer

  2. 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

  3. 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

  4. 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

  5. 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

  6. Slide 6: Corporate Profile

    Corporate Profile Market Summary Ticker Symbol TSX / NYSE: BTE Average Daily Volume (1) CAN: 10,200,000 / US: 2,800,000 Shares Outstanding 210.7 million Market Capitalization / Enterprise Value $1.3 billion / $3.3 billion Net Debt (2) $2.0 billion Corporate Summary Production (3) 68,000 – 72,000 boe

  7. Slide 7: Three Key Resource Plays

    Three Key Resource Plays Eagle FordTexas 34% Peace River  Q1/16 production of Texas 34%  Q1/16 production of 14,200 41,100 boe/d boe/d Heavy Oil 51%  Expect to bring ~ 30 net  Developed Light Oil 22% via multi-lateral wells on production in horizontal wells 2016  2016 development deferred  Act

  8. Slide 8: 2016 Capital Budget

    2016 Capital Budget Summary of 2016 Expectations Exploration and Development Capital $225-$265 million Production 68,000 – 72,000 boe/d  We are targeting capital expenditures to approximate funds from operations in order to minimize additional bank borrowings.  Approximately 95% of planned expendi

  9. Slide 9: Balance Sheet / Debt Composition

    Balance Sheet / Debt Composition  At March 31, 2016, long-term debt (bank loan and long-term notes) totaled $1.8 billion and we were 39% drawn on our credit facilities. Credit Capacity $2.3 Billion Long-Term Notes Maturity Schedule ($ Millions) Debt composition as at March 31, 2016. We have secured

  10. Slide 10: Financial Covenant Flexibility

    Financial Covenant Flexibility Baytex Position as at March 31, 2016 Senior Secured Debt (1) to Bank EBITDA (2) 0.61 : 1.00 Interest Coverage (3) 4.82 : 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 Secur

  11. Slide 11: Crude Oil Hedge Portfolio

    Crude Oil Hedge Portfolio Q2/2016 Q3/2016 Q4/2016 Balance of Full-Year 2016 2017 WTI Fixed Hedges Volumes (bbl/d) 8,000 5,000 5,000 6,000 --- Fixed Price (US$/bbl) $59.84 $63.79 $63.79 $62.03 --- WTI 3-Way Option Volumes (bbl/d) 9,500 10,000 10,000 9,833 10,000 Average Ceiling/Floor/Sold Floor $60/$

  12. Slide 12: Cost Reduction Focus

    Cost Reduction Focus Baytex continues to take active measures to reduce costs where possible while maintaining efficiency in our operations and the safety of our employees and contractors.  Drilling costs reduced 27% in the Eagle Ford Realized Over $150 Million in  Operating expenses reduced 18% f

  13. Slide 13: Attractive Rates of Return

    Attractive Rates of Return 175% 150% Eagle Ford - US$5.6M/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

  14. Slide 14: Q1 2016 Highlights

    Q1 2016 Highlights  Generated production of 75,800 boe/d (78% oil and NGL)  Continued to Meet the Challenges of Low Oil Prices  Directed 96% of exploration and development spending to the Eagle Ford which generates the highest rates of return and highest netbacks in our portfolio  Pro-actively s

  15. Slide 15: 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

  16. Slide 16: The Eagle Ford

    The Eagle Ford BANTEX

  17. 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  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 to fac

  18. 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 34 wells in Q1/2016 (47% Upper Eagle Ford, 35% Lower Eagle Ford, 18% Austin Chalk)  A total of 19 wells established 30-day IP rates

  19. Slide 19: Eagle Ford Performance

    Eagle Ford Performance Increasing Performance and Efficiency  Improvements in drilling and completion design have increased 30-day IP rates by approximately 106% since Q4/2011 with 180-day cumulative recovery increasing 74% over the same time period  Drilling times have decreased by 60% since Q4/2

  20. Slide 20: Completion Improvements

    Completion Improvements Increasing Lateral Length, Frac Stages and Proppant Lateral Length and Total Depth Per Well Frac Stages and Proppant Per Well 20

  21. Slide 21: Heavy Oil Overview

    Heavy Oil Overview 21

  22. Slide 22: Peace River Oil Sands

     Peace River Oil Sands Multi-Lateral Drilling Drives Strong Capital Efficiencies Area Statistics Land Holdings 338 net sections Production (Q1/2016) 14,200 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

  23. Slide 23: Lloydminster Heavy Oil

    Lloydminster Lloydminster Heavy Oil Heavy Oil  Shift to Horizontal Drilling Expands Inventory Area Statistics Land Position 652 net sections Production (Q1/2015) 11,500 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

  24. Slide 24: 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 

  25. Slide 25: 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

Baytex Energy — Bank of America Merrill Lynch 2016 Energy Credit Conference on 6ix