Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (April 2022)
40 slides from Baytex Energy's investor presentation, April 2022
Slide 1: Investor Presentation April 2022
Investor Presentation April 2022
Slide 2: Advisory
Advisory In this presentation, we refer to certain specified financial and capital management 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 determ
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 The Clearwater has emerged as one of the most profitable plays
Slide 4: Corporate Profile
Corporate Profile Market Summary Ticker Symbol TSX: BTE Average Daily Volume (1) 14 million Shares Outstanding (2) 564 million Market Capitalization / Enterprise Value (2) $3.1 billion / $4.5 billion Operating Statistics Production (Gross W.I.) (3) 80,000 – 83,000 boe/d PEACE RIVER Production Mix (3
Slide 5: 2021 Highlights
2021 Highlights We delivered on our commitments with strong operational execution, record free cash flow and a significantly improved balance sheet 2021 Priorities 2021 Highlights Delivered production of 80,156 boe/d, above high end of annual guidance Maintain Capital Discipline Exploration and
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: 2022 Capital Program
2022 Capital Program Cash neutrality (capital program fully 2022 Guidance (1) funded) at ~ US$45/bbl WTI E&D Expenditures $400 – 450 million Production 80,000 - 83,000 boe/d Capital efficiencies of approximately Oil and NGLs 83% $15,000 per boe/d across the portfolio Net Wells 60% directed to
Slide 8: 2022 Uses of Free Cash Flow
2022 Uses of Free Cash Flow Debt reduction remains top priority Allocation of Free Cash Flow We expect to hit our initial $1.2 billon net 100% debt(1) target in Q2/2022 Share Shareholder Buybacks Returns Introducing direct shareholder 75% returns Net Debt 50% Reduction For 2022, we expect to all
Slide 9: 2022 Free Cash Flow Generation and Shareholder Return Potential
2022 Free Cash Flow Generation and Shareholder Return Potential 2022 Free Cash Flow ($ millions) (1)(2) 23% Target ~ 25% of Free Cash Flow(1) Yield to Share Buybacks 19% Yield 16% Yield $1,400 11% Yield $700 $1,200 $600 $500 Buybacks $340 Buybacks $1,000 Buybacks Debt FCF US$65/bbl WTI US$75/bbl WTI
Slide 10: Committed to Maintaining Strong Financial Flexibility
Committed to Maintaining Strong Financial Flexibility Net Debt(1) (December 31, 2021) $ millions • Credit Facilities ~ 50% Undrawn Credit facilities (2) $507 Long-term notes $886 • Liquidity of ~ $500 million Long-term debt $1,393 Working Capital deficiency $17 • First long-term note maturity Net De
Slide 11: 5-Year Outlook (2021 to 2025) at US$65 WTI
5-Year Outlook (2021 to 2025) at US$65 WTI Free Cash Flow(1) Profile Highlights of 5-Year Outlook $2,500 Cumulative Free Cash Flow ($ millions) $2,000 • $2.1 billion cumulative free cash flow(1) • Target exploration and development $1,500 expenditures at ~ 50% of adjusted funds flow $1,000 • 2-4% an
Slide 12: 5-Year Outlook – Free Cash Flow Profile
5-Year Outlook – Free Cash Flow Profile US$65 WTI US$75 WTI US$85 WTI US$95 WTI ~ $2.1 Billion ~ $2.8 Billion ~ $3.4 Billion ~ $4.0 Billion Cumulative FCF(1) Cumulative FCF (1) Cumulative FCF (1) Cumulative FCF (1) $1,000 1.8x $900 1.6x $800 1.4x Net Debt to EBITDA ratio Free Cash Flow ($ millions)
Slide 13: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Full-Year H1/2022 H2/2022 2023 2022 WTI Fixed Hedges Volumes (bbl/d) 10,000 10,000 10,000 --- Fixed Price (US$/bbl) $53.50 $53.50 $53.50 --- WTI 3-Way Option (1) Volumes (bbl/d) 10,500 10,500 10,500 9,500 Average Sold Put / Put / Sold Call (US$/bbl) $48/$58/68 $48/$58$68 $4
Slide 14: 2022E Adjusted Funds Flow Sensitivities
2022E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Sensitivities Excluding Hedges Including Hedges Change of US$1.00/bbl WTI crude oil $24.1 $15.1 Change of US$1.00/bbl WCS heavy oil differential $8.4 $3.3 Change of US$1.00/bbl MSW light oil differential
Slide 15: Asset Overview
Asset Overview BIE
Slide 16: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 30,700 boe/d 17,300 boe/d 24,400 boe/d 2,000 boe/d (Gross; 2021) Oil and NGLs 79% 89% 91% 82% (Gross; 2021) 2P Reserves (1) 201 mm
Slide 17: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with an average 25% W.I. Karnes • Produced 30,700 boe/d LONGHORN (79% liquids) in 2021 Atascosa • 2021 - 93 gross (23.1 net) wells
Slide 18: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Free Cash Flow (1) (C$ millions) 224 net 250 locations $1.1 billion cumulative asset level free cash flow since 2016 200 150 100 ~ 14 $332 net wells 50 on- stream 0 $96 2022 Program Remaining Undrilled Inv
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 17,300 boe/d (89% oil) in 2021 • Strong operating netbacks(1) ~ $48/boe at US$65 WTI Kerrobert Plenty • $211 million of asset Esther/Hoosier Greater Gleneath level free cash flow(1) in L
Slide 20: Viking: High Netback Light Oil
Viking: High Netback Light Oil High Operating Netback (1) Light Oil ($/boe) > 10 year drilling inventory (2) Strong price realizations, low cost structure and high free cash flow (1) ~ 1,650 net 1,800 locations 1,600 1,400 $100.00 $260MM 1,200 $90.00 1,000 $197MM 800 $80.00 600 ~ 145 $133MM 400 net
Slide 21: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development • Produced 13,100 boe/d in 2021 (86% oil) • Dominant 560 net sections • Nine net Bluesky multi-lateral wells planned for 2022 • Long life polymer flood at Seal Seal Clearwater Lands Harmon Valley • Strategic agreements with Peavine Métis Settlement c
Slide 22: Northwest Clearwater: Extending the Trend
Northwest Clearwater: Extending the Trend Peavine 8 5-33 Pad 14-36 Pad 7 5 4 6 1 2 3 • > 500 net sections in the NW 4-25 Pad Clearwater fairway with > 125 prospective for Spirit River (Clearwater equivalent) • Executed two strategic land agreements with the Peavine Métis Settlement that cover 80 sec
Slide 23: Northwest Clearwater – Promising Early Results with Strong Economics
Northwest Clearwater – Promising Early Results with Strong Economics Operations Update Top 10 Clearwater Wells (1) • Eight producing wells at Peavine Peak Calendar Rate • Successful Clearwater exploration well on No. UWI Current Operator (bbl/day) Seal legacy lands in late 2021 with follow- up well
Slide 24: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory • Produced 10,400 boe/d in 2021 (98% oil) • Strong capital efficiencies Ardmore/Cold Lake • Applying multi-lateral horizontal drilling and production techniques Lindbergh • Long-life water and polymer Tangleflags Lloydminster floods at S
Slide 25: Heavy Oil Innovation
Heavy Oil Innovation Peace River Lloydminster Multi-Lateral Horizontal Horizontal Well Economics (1) WTI Oil Price $65/bbl $75/bbl WTI Oil Price $65/bbl $75/bbl Payout: 1.0 year 8 months Payout: 8 months 6 months IRR: 120% 223% IRR: 296% > 500% Recycle Ratio: 3.2x 3.9x Recycle Ratio: 2.8x 3.5x (1) I
Slide 26: Pembina Area Duvernay Light Oil: Emerging Resource Play
Pembina Area Duvernay Light Oil: Emerging Resource Play Pembina Duvernay • ~ 200 sections of 100% WI lands • Eleven wells drilled to date have delineated a minimum of 100-125 sections • Produced 2,000 boe/d (82% liquids) in 2021 • Two wells onstream Q4/2021: Black Oil 6-8 generated a 30-day IP rate
Slide 27: High Quality Oil Development
High Quality Oil Development Eagle Ford Viking Peace River Lloydminster Pembina Duvernay Formation Lower Eagle Ford Viking Bluesky Mannville Group Duvernay Upper Eagle Ford Clearwater Austin Chalk 550-800 (Bluesky) Depth (metres) 3,300-3,900 700 500-600 (Clearwater) 350-800 2,200-2,400 Oil API Oil:
Slide 28: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG)
Slide 29: ESG at Baytex
ESG at Baytex As a responsible energy company, we take a sustainable approach to managing and developing our business into the future. We aspire to create an organization that future generations will be proud to be a part of. 29
Slide 30: How Focusing on ESG Creates Value
How Focusing on ESG Creates Value By incorporating environmental, social and governance factors into our business and reporting on our performance, we create value for shareholders and remain focused on advancing a responsible energy future. 30
Slide 31: Our ESG Targets
Our ESG Targets Our Past Targets OUR TARGETS Our New Targets ‘Our new targets focus on our environmental and social challenges: WHAT WE ACHIEVED GHG EMISSIONS 30% reduction of our corporate GHG emission intensity (tonnes of CO,e per boe) by 2021 from our 2018 baseline.* ‘incorporating full year emis
Slide 32: Supplementary Information
Supplementary Information
Slide 33: 2022 Guidance and Cost Assumptions
2022 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $400 - $450 Production (boe/d) 80,000 – 83,000 Expenses: Average royalty rate (%) (1) 18.5% - 19.0% Operating ($/boe) (2) $12.25 - $13.00 Transportation ($/boe) (2) $1.20 - $1.30 General and administrative ($ mi
Slide 34: Summary of Operating and Financial Metrics
Summary of Operating and Financial Metrics Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Benchmark Prices WTI crude oil (US$/bbl) $46.17 $27.85 $40.93 $42.66 $39.40 $57.84 $66.07 $70.56 $77.19 $67.92 NYMEX natural gas (US$/mcf) $1.95 $1.72 $1.98 $2.66 $2.08 $2.69 $2.83 $4
Slide 35: Forward Looking Statements Advisory
Forward Looking Statements Advisory 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 36: 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; the ability to ad
Slide 37: Specified Financial Measures Advisory
Specified Financial Measures Advisory In this presentation, we refer to certain specified financial measures (such as free cash flow, operating netback, total sales, net of blending and other expense, heavy oil sales, net of blending and other expense, and average royalty rate) which do not have any
Slide 38: Capital Management Measures Advisory
Capital Management Measures Advisory This presentation contains the terms "adjusted funds flow", "net debt“, "net debt to adjusted funds flow ratio" and “net debt to EBITDA” which are capital management measures. We believe that inclusion of these specified financial measures provides useful informa
Slide 39: 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 40: 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