Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (May 2021)
36 slides from Baytex Energy's investor presentation, May 2021
Slide 1: Investor Presentation May 2021
Investor Presentation May 2021
Slide 2: Advisory: Forward Looking Statements
Advisory Forward Looking Statements Any “financial outlook” or “future oriented financial information” in this presentation as defined by applicable securities laws, has been approved by management of Baytex. Such financial outlook or future oriented financial information is provided for the purpose
Slide 3: Advisory (Cont.)
Advisory (Cont.) operate our properties; variations in interest rates and foreign exchange rates; risks associated with our hedging activities; retaining or replacing our leadership and key personnel; changes in income tax or other laws or government incentive programs; uncertainties associated with
Slide 4: Advisory Regarding Oil and Gas Information
Advisory (Cont.) 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 determi
Slide 5: Investment Highlights
Investment Highlights High Quality and ▪ ~ 10 or more years of projected drilling inventory in each of our Diversified Oil Portfolio core areas (Viking, Eagle Ford and Canadian heavy oil) Across Multiple Plays ▪ Strong capital efficiencies and flexibility on discretionary capital ▪ Exploration and d
Slide 6: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE Average Daily Volume (1) 5.4 million Shares Outstanding (2) 564 million Market Capitalization / Enterprise Value (2) $823 million / $2,582 million Operating Statistics Production (Gross W.I.) (3) 77,000 – 79,000 boe/d PEACE RIVER Production Mix
Slide 7: Q1 2021 Highlights
Q1 2021 Highlights Operational Execution • Production of 78,800 boe/d, up 12% from Q4/2020 • E&D capital of $84 million, consistent with full-year plan • Successful exploration well on our Peace River Clearwater play Free Cash Flow Generation • Adjusted funds flow of $157 million ($0.28 per basic sh
Slide 8: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 46% reduction in GHG 25% reduction in total emissions intensity through recordable injury year-end 2020, relative to frequency in 5 years 2018 baseline Gas Conservation Indigenous Relations 97% routine gas Recent agreements with conservation in Peace Rive
Slide 9: 2021 Capital Program
2021 Capital Program • Cash neutrality (capital program fully 2021 Guidance (1) funded) at US$35/bbl WTI E&D CapEx $285 - 315 million • Capital efficiencies of approximately Production 77,000 - 79,000 boe/d $12,000 per boe/d across the Oil and NGLs 81% portfolio Net Wells • 75% directed to our high
Slide 10: 5-Year Plan (2021 to 2025) at US$55 WTI
5-Year Plan (2021 to 2025) at US$55 WTI 1. Disciplined and Returns Based Capital Allocation • Target capital spending at < 70% of adjusted funds flow • Optimize production in the 80,000 to 85,000 boe/d range • Capital efficiencies during the plan period of $15,000 to $16,000 per boe/d 2. Maximize Fr
Slide 11: 5-Year Plan Generates $1 Billion Cumulative Free Cash Flow
5-Year Plan Generates $1 Billion Cumulative Free Cash Flow 90,000 $1 Billion Cumulative Free Cash Flow 80,000 $1,200 70,000 Cumulative Free Cash Flow ($ millions) $1,000 60,000 Production (boe/d) $800 50,000 40,000 $600 30,000 $400 20,000 $200 10,000 0 $0 2021 2022 2023 2024 2025 2021 2022 2023 2024
Slide 12: 5-Year Plan with Upside WTI Scenarios
5-Year Plan with Upside WTI Scenario’s Significant Free Cash Flow and Accelerated De-leveraging Base Case Upside WTI Scenario’s $500 3.0x $450 2.5x $400 $350 2.0x Free Cash Flow ($ millions) Net Debt to Bank EBITDA ratio $300 $250 1.5x $200 1.0x $150 $100 0.5x $50 $0 0.0x 2021 2022 2023 2024 2025 20
Slide 13: Financial Liquidity
Financial Liquidity Balance Sheet (2) $ millions • Credit Facilities ~ 40% Credit facilities $607 Undrawn Long-term notes $1,131 • $401 million of undrawn credit Long-term debt $1,738 capacity and liquidity, net of Working Capital deficiency $21 working capital, of $381 million Net Debt $1,759 • Fin
Slide 14: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio 9 Months Q2/2021 Q3/2021 Q4/2021 2022 2021 WTI Fixed Hedges (1) Volumes (bbl/d) 4,000 4,000 4,000 4,000 10,000 Fixed Price (US$/bbl) $45.00 $45.00 $45.00 $45.00 $53.50 WTI 3-Way Option (2) Volumes (bbl/d) 17,500 17,500 17,500 17,500 6,000 Average Sold Put / Put / Sold Call
Slide 15: 2021E Adjusted Funds Flow Sensitivities
2021E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $22.7 $13.0 Change of US$1.00/bbl WCS heavy oil differential $7.1 $3.2 Change of US$1.00/bbl MSW light oil differential $6.
Slide 16: Asset Overview
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Slide 17: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 26,740 boe/d 19,400 boe/d 24,400 boe/d 2,100 boe/d (Gross; Q1 2021) Oil and NGLs 77% 91% 90% 84% (Gross; Q1 2021) 2P Reserves (1)
Slide 18: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • Q1/2021 production of LONGHORN 26,740 boe/d (77% liquids) Atascosa • Q1/2021 - 24 gross (7.0 SUGARLO
Slide 19: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Asset Level Free Cash Flow (1) (C$ millions) 300 ~ 250 net locations $842 million cumulative asset level 250 free cash flow since 2016 200 150 $43 ~ 18 100 net wells $96 50 on- stream 0 2021 Program Remain
Slide 20: Viking Light Oil: Highly Prospective Sections
Viking Light Oil: 460 Highly Prospective Sections • Shallow (700 m), light oil (36° API) resource play with strong netbacks • Produced 19,400 boe/d (91% oil) in Q1/2021 • Drilling activity resumed in December with two rigs mobilized Kerrobert Plenty • Esther/Hoosier Greater Gleneath Capital reductio
Slide 21: Technical Advancements Drive Productivity Improvement
Technical Advancements Drive Productivity Improvement Shift to ERH(1) Wells Drives Productivity 95%+ of Viking Development now Improvements ERH Wells 400 100% Viking Wells by Vintage 350 90% 80 80% 300 70% 70 250 60% 60 200 50% Oil Rate (bbl/d) 50 40% 150 30% 40 100 20% 30 50 10% 20 0 0% 2012 2013 2
Slide 22: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development Performance Drivers • Produced 14,300 boe/d in Q1/2021 (85% oil) Golden • Dominant 560 net sections • ~ 4 net wells planned for H2/2021 Seal Harmon Valley Peavine Lands • Q1/2020 strategic agreement with Peavine Metis settlement • 60 sections of land
Slide 23: Northwest Clearwater: Extending the Trend
Northwest Clearwater: Extending the Trend Peavine • > 500 net sections in the NW Clearwater fairway with > 100 prospective for Spirit River (Clearwater equivalent) • Promising exploration well result with 30-day initial production rate of 175 bbl/d (from two laterals) • H2/2021 plans include up to 6
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory Performance Drivers • Produced 10,100 boe/d in Q1/2021 (97% oil) Ardmore/Cold Lake • Strong capital efficiencies • Applying multi-lateral horizontal drilling and Lindbergh production techniques Lloydminster Tangleflags • ~ 31 (23 net) we
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Lloydminster Peace River Horizontal Multi-Lateral Horizontal Well Economics (1) WTI Oil Price $50/bbl $60/bbl WTI Oil Price $50/bbl $60/bbl Payout: 1.7 years 0.9 years Payout: 1.4 years 0.9 years IRR: 51% 129% IRR: 62% 136% Recycle Ratio: 2.5x 3.8x Recycle Ratio: 2.0x 2.9x Break
Slide 26: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • 232 sections of 100% WI lands • Nine wells drilled to date have delineated a minimum of 100- 125 sections • Produced 2,100 boe/d (84% liquids) in Q1/2021 • Two wells drilled in 2020 Black Oil demonstrate repeatability of 11-
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River Lloydminster Pembina Duvernay Formation Lower Eagle Ford Viking Bluesky Mannville Group Duvernay Upper Eagle Ford Austin Chalk Depth (metres) 3,300-3,900 700 600 350-800 2,200-2,400 Oil API Oil: 40-45° 36° 11° 10-16° 42-44° Condensate: 44-55
Slide 28: Corporate Sustainability
Corporate Sustainability TEX ENERGY CORP. BAY
Slide 29: Corporate Sustainability
Corporate Sustainability At Baytex, we believe that commitment to corporate responsibility is just as important as delivering financial and operational targets. We publish a biennial Corporate Sustainability Report which provides transparent reporting and clear goals on the topics that matter: Safet
Slide 30: GHG Emissions Reduction
GHG Emissions Reduction Target to reduce GHG emission intensity (tonnes of CO2 per boe) by 65% by 2025. GHG Intensity Improvement and Target 0.120 65% reduction Our emissions reduction strategy Tonnes of CO2 per boe from baseline includes: 0.080 • Increased gas conservation and combustion 0.040 • Re
Slide 31: A Culture of Commitment
A Culture of Commitment How it contributes to Objective What we’ve done Result value creation Ensure our employees and 59% reduction in reportable spill ENVIRONMENT Reduces costs and maintains Responsibly develop contractors uphold our procedures volumes, over 5 years social license our assets for s
Slide 32: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP. TSX
Slide 33: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 Benchmark Prices WTI crude oil (US$/bbl) $54.90 $59.81 $56.45 $56.96 $57.03 $46.17 $27.85 $40.93 $42.66 $39.40 $57.84 NYMEX natural gas (US$/mcf) $3.15 $2.64 $2.23 $2.50 $2.63
Slide 34: Reserves Summary (Gross)
Reserves Summary (Gross) 2P Reserves Breakdown 2P Reserves by Asset 2P Reserves by Commodity Pembina Other Duvernay Natural Gas PDP Probable Eagle Heavy Oil Ford Light Oil Heavy & NGL Oil PDNP + PUD Viking Pembina Category (1) Eagle Ford Viking Heavy Oil Other Total Duvernay Proved Developed Produci
Slide 35: 2021 Guidance and Cost Assumptions
2021 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $285 - $315 Production (boe/d) 77,000 – 79,000 Expenses: Royalty rate (%) 18% - 18.5% Operating ($/boe) $11.25 - $12.00 Transportation ($/boe) $1.15 - $1.25 General and administrative ($ millions) $42 ($1.48/boe
Slide 36: Contact Information
Contact Information Baytex Energy Corp. Edward D. LaFehr President and Chief Executive Officer Suite 2800, Centennial Place 587.952.3000 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 Rodney D. Gray T 587.952.3000 Executive Vice President & Chief Financial Officer Toll Free 1.800.524.5521 587.952.31