Baytex Energy Corp. · TSX:BTE
Baytex Energy — Merger or Acquisition (February 2014)
20 slides from Baytex Energy's merger presentation, February 2014
Slide 1: Strategic Acquisition of Aurora Oil & Gas
A preliminary short form prospectus containing important information relating to the securities of Baytex Energy Corp. (the "Company") described in this presentation has not yet been filed with the securities regulatory authorities in each of the provinces of Canada. A copy of the preliminary short
Slide 2: Advisory
Advisory The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis and reviews of the Company and of the information contained in this pr
Slide 3: Advisory (Cont.)
Advisory (Cont.) Actual results achieved during the forecast period 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 Acquisition may not be completed on the terms cont
Slide 4: Advisory (Cont.)
Advisory (Cont.) Financial Measures This presentation refers to funds from operations, which does not have any standardized meaning prescribed by generally accepted accounting principles in Canada ("GAAP"). We define funds from operations as cash flow from operating activities adjusted for financing
Slide 5: Strategic Acquisition of Aurora Oil & Gas
Strategic Acquisition of Aurora Oil & Gas - Baytex has entered into an agreement to acquire Aurora Oil & Gas - Aurora is listed on the Toronto and Australia Stock Exchanges (TSX: AEF, ASX: AUT) - Acquisition to be completed by way of a Scheme of Arrangement under Australian law - Cash offer price of
Slide 6: Strategic Rationale
Strategic Rationale Exposure to World Class Oil Resource Play Increased Scale and Diversity of Production • Diversifies asset base into the core of the • Total gross production upon closing is forecast liquids-rich Eagle Ford, one of the premier oil to be 85,000 boe/d (53% heavy oil, 34% light resou
Slide 7: Aurora Acquisition Metrics
Aurora Acquisition Metrics AUD CAD Notes (1) Aurora reserves based on Baytex Aurora Share Price (CAD/AUD = $0.9744) $4.10 $4.00 internal estimates of Aurora reserves as at December 31, 2013 prepared by a non- independent qualified reserves evaluator in Shares Outstanding (fully diluted) 458.6 accord
Slide 8: Baytex 2014E Pro Forma Production and FFO
Baytex 2014E Pro Forma Production and FFO Baytex Pro Forma Production (Mboe/d) 61 88-90 Funds from Operations (C$ billions) $0.7 $1.0-$1.1 Average Shares Outstanding (millions) 127 162 FFO per Share (C$ undiluted) $5.50 $6.45 FFO Accretion 17% Operating Netback (C$/boe) $35.60 $37.90 % Change in Ope
Slide 9: Baytex Pro Forma Liquidity ($B)
Baytex Pro Forma Liquidity ($B) Equity Issue Size (1) Coupon Principal Due C$1.3B C$1.5B (2) Long Term Notes: Baytex Series B Debentures (US$) 6.750% Feb-2021 $0.2 $0.2 Baytex Series C Debentures (C$) 6.625% Jul-2022 $0.3 $0.3 Aurora Debentures (US$) 9.875% Feb-2017 $0.4 $0.4 Aurora Debentures (US$)
Slide 10: Pro Forma Production and Reserves
Pro Forma Production and Reserves (1) Baytex Stand-Alone Baytex Pro Forma Aurora Production (2014E) = 61 mboe/d Combined Production (2014E) = 88-90 mboe/d NGL 3% Natural Gas Light Oil Natural Gas Light Oil 11% 11% 13% 21% NGL 13% Heavy Oil Heavy Oil 75% 53% Proved + Probable Reserves (YE 2012) = 292
Slide 11: Key Attributes of Aurora
Key Attributes of Aurora - Material Production and High Quality Reserve Base - Substantial inventory of potential well locations to support future production growth - Reserve upside exists through additional horizons in the Austin Chalk and Upper Eagle Ford formations, downspacing and improving comp
Slide 12: Key Attributes of Aurora (continued)
Key Attributes of Aurora (continued) - Increasing Development Performance and Recovery - A subsidiary of Marathon Oil Corporation is the operator of the majority of Aurora’s Eagle Ford position - Continuous improvements in drilling completion design have increased 30-day IP rates by approximately 45
Slide 13: Eagle Ford Acreage Position
Eagle Ford Acreage Position Baytex is acquiring 22,200 net contiguous acres in the prolific Sugarkane Field located in south Texas in the core of the liquids-rich Eagle Ford shale. The acquisition provides exposure to low-risk, repeatable, high-return assets with leading capital efficiencies. The Su
Slide 14: Eagle Ford Acreage – Sweet Spot of a World-Class Play
Eagle Ford Acreage – Sweet Spot of a World-Class Play Eagle Ford Sweet Spot EUR Map Acreage Position Amongst Top Operators • EURs exceed 500,000 barrels of oil across • Aurora’s acreage is amongst top operators most of the acreage including COP, MRO, EOG and MUR Source: Drillinginfo, Scotiabank. EUR
Slide 15: Eagle Ford – Opportunity Summary
Eagle Ford – Opportunity Summary Eagle Ford Type Log Current Development - 80,200 highly contiguous gross acres (22,200 net acres) in the most prolific area of the Eagle Ford - Lower Eagle Ford originally developed at 80-acre spacing; current development is now 60-acre spacing (volatile oil) and 40-
Slide 16: Attractive Well Economics
Attractive Well Economics Condensate Completed Well Cost US$7.3M Production (30-day IP) 900-1,000 boe/d % Liquids 72% Capital Efficiency (1) US$8,000 per boe/d IRR (before tax) (2) >100% Volatile Oil Completed Well Cost US$7.8M Production (30-day IP) 800-1,000 boe/d % Liquids 89% Capital Efficiency
Slide 17: Baytex Pro Forma – Three Key Oil Resource Plays
Baytex Pro Forma – Three Key Oil Resource Plays > 80% of Baytex’s pro forma production comes from three oil plays Single Well Economics (excluding acreage acquisition costs) (1) Eagle Ford Peace River Heavy Oil Lloydminster Heavy Oil Condensate Volatile Oil Multi-Laterals Verticals Horizontals Compl
Slide 18: Conclusion
Conclusion - Baytex is acquiring premier acreage in the core of the Eagle Ford – one of the leading shale oil plays in the U.S. - The assets to be acquired are an excellent fit with our business model and positions Baytex in another world-class oil resource play - Provides Baytex shareholders with e
Slide 19: Scheme of Arrangement Summary
Scheme of Arrangement Summary Scheme of Arrangement under Australian law expected to take 108 days to complete Key Dates (1) February 6 Day 1 Implementation Agreement executed March 6 Day 29 Scheme of Arrangement documents drafted and finalised March 28 Day 51 First Court hearing April 3 Day 57 Disp
Slide 20: 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 W. Derek Aylesworth www.baytex.ab.ca Chief Financial Officer (587) 952-3120 Brian Ector Vice President,
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