Baytex Energy Corp. · TSX:BTE
Baytex Energy — Investor Presentation (July 2024)
36 slides from Baytex Energy's investor presentation, July 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION CREATING ENERGY | CREATING VALUE July 2024
Slide 2: Advisory
ADVISORY In this presentation, we refer to certain specified financial 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 determination of these measur
Slide 3: A Diversified North American E&P Operator
A DIVERSIFIED NORTH AMERICAN E&P OPERATOR Market Summary Ticker Symbol TSX, NYSE | BTE Average Daily Volume (1) Canada: 8.5 million | US: 10.0 million Shares Outstanding (2) 800 million Market Capitalization / Enterprise Value (3) $4.0 billion / $6.6 billion Annual Dividend per Share | Dividend Yiel
Slide 4: Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns
INVESTMENT HIGHLIGHTS Focus on Operational Excellence to Deliver Long-Term Value and Enhanced Shareholder Returns High-quality and diversified oil portfolio with more than 10 years of drilling inventory Disciplined Track record of new discoveries Reinvestment and Targeting modest single-digit organi
Slide 5: H1/2024 Highlights
H1/2024 HIGHLIGHTS Expect to deliver substantial free cash flow(1) and shareholder returns in 2024 Production and E&D expenditures consistent with full-year plan Strong Execution Generated $181 million of free cash flow(1) in H1/2024 and returned $97 million to shareholders 23 operated Lower Eagle F
Slide 6: Creating Shareholder Value
CREATING SHAREHOLDER VALUE Delivering production per share growth while improving financial leverage Production (boe/d) per thousand shares Total debt(1) to Bank EBITDA(1)(2) 0.20 4.5x 0.19 4.0x 0.18 23% increase from Q2/2023 3.5x 0.17 50% increase from Q4/2020 Committed to further de-leveraging 3.0
Slide 7: 2024 Outlook
2024 OUTLOOK Disciplined 153,000 boe/d 2024 mid-point production Reinvestment and Capital Allocation 2024 Guidance E&D Expenditures $1.2 - $1.3 billion Execute an exploration and development Production 152,000 - 154,000 boe/d program of $1.2 to $1.3 billion Oil and NGLs 84% 2024 priorities: Deliver
Slide 8: 2024 Return of Capital
2024 RETURN OF CAPITAL Return 50% of free cash flow(1) to shareholders Free Cash Flow Priorities Return of Capital(1) and Strengthening Balance Sheet 2024 Free Cash Flow(1) Allocation Share Buybacks ~ $700 million Share count reduced by 7.2% since June 2023(2) Free Cash Flow(1)(3) Base Dividend Quar
Slide 9: Five-Year Outlook (2024 – 2028)
FIVE-YEAR OUTLOOK (2024 – 2028) at US$70/bbl WTI Sustainable plan(1) delivers significant value 1-4% annual ~ 60% annual production growth reinvestment rate(3) Underpinned by strong development Annual E&D expenditures of $1.2 to $1.4 economics and > 10 years of drilling inventory billion drives mean
Slide 10: Five-Year Outlook: Shareholder Returns
FIVE-YEAR OUTLOOK: 2024 - 2028 Shareholder Returns(1) Compelling Returns Profile Underpinned by disciplined reinvestment and capital allocation Return of Capital(2) to Shareholders over Five-Year Free Cash Flow(1)(2) over Five-Year Outlook ($ millions) Outlook(1) ($ millions) $7,000 $4,500 $4,000 $6
Slide 11: Highly Economic Portfolio
HIGHLY ECONOMIC PORTFOLIO Strong drilling economics across portfolio Portfolio at US$75 WTI (1)(2) CROCI (3) > 1.75x Payouts < 18 Months IRRs > 65% Eagle Ford Duvernay Viking Clearwater > 500% Heavy Oil 0.0x 2.0x 4.0x 0 10 20 0% 50% 100% 150% (1) Individual well economics based on constant pricing a
Slide 12: Crude Oil Hedge Portfolio
CRUDE OIL HEDGE PORTFOLIO Balanced Approach to Risk Management Target 40% of 50,000 Hedged Volumes (bbl/d) Net Crude Oil ~ 40% 40,000 ~ 40% ~ 40% 30,000 ~ 30% Volumes(1) 20,000 10,000 0 Disciplined hedge program to help mitigate Q3 2024 Q4 2024 Q1 2025 Q2 2025 volatility in revenue due to changes in
Slide 13: Maintaining Financial Strength
MAINTAINING FINANCIAL STRENGTH Commitment to a Strong Balance Sheet Total Debt (1)(2) C$ millions Extended long-term note Credit facilities (3) $626 maturities at lower coupon Long-term notes Strong liquidity with ~60% unutilized 8.500% notes due April 1, 2030 $1,095 credit capacity 7.375% notes due
Slide 14: Adjusted Funds Flow Sensitivities
ADJUSTED FUNDS FLOW SENSITIVITIES Sensitivities Estimated Effect on Annual Adjusted Funds Flow(1) ($MM) Change of US$5.00/bbl WTI crude oil $215 Change of US$1.00/bbl WCS heavy oil differential $15 Change of US$0.50/MMbtu NYMEX natural gas $19 Change of $0.01 in the C$/US$ exchange rate $18 (1) Capi
Slide 15: Asset Overview
ASSET OVERVIEW w ro = BAYTEXENERGY.COM ,
Slide 16: Business Unit Highlights
BUSINESS UNIT HIGHLIGHTS w Light Oil – Canada Heavy Oil – Canada Light Oil – USA (Eagle Ford) (Viking/Duvernay) (Peace River/Peavine/ Lloydminster) Production (2024E) ~ 90,000 boe/d ~ 17,000 boe/d ~ 44,000 boe/d % Liquids 81% 83% 96% Land (net acres) 182,000 311,000 710,000 2P Reserves (Gross) (1) 4
Slide 17: U.S. Light Oil: Eagle Ford
U.S. LIGHT OIL: EAGLE FORD Strong Operating Capability Increased Scale in a Premier Basin with Strong Market Access LEE BASTROP Eagle Ford Pluto Pad 3 LEF Wells 269,000 gross acres, 70% operated Average 30-day IP: FAYETTE CALDWELL 1,348 Boe/d 94% oil and NGLs Lowers full-company cash cost structure,
Slide 18: U.S. Light Oil: Operated Eagle Ford
U.S. LIGHT OIL: OPERATED EAGLE FORD Lower Eagle Ford Wells Onstream – Last 12 Months 30-day Peak Production Wells Lateral Crude Oil Total % Strong results across thermal Onstream Length (feet) (Bbl/d) (Boe/d) Crude Oil H2 2023 22 9,500 700 1,530 46% maturity windows H1 2024 23 9,300 835 1,100 78% bl
Slide 19: Canada Light Oil: Pembina Duvernay / Viking
CANADA LIGHT OIL: PEMBINA DUVERNAY / VIKING High netback light oil with strong asset level free cash flow(1) Pembina Duvernay Shale is a potential growth asset in the Canadian portfolio Pembina Duvernay Viking 142 net sections 344 net sections Demonstration-stage light oil resource play Stable produ
Slide 20: Canada Heavy Oil: Peace River / Peavine / Lloydminster
CANADA HEAVY OIL: PEACE RIVER / PEAVINE / LLOYDMINSTER Innovative Multi-Lateral Drilling and Top-Tier Efficiencies Clearwater at Peavine Delivers Exceptional Well Performance and Economics Peace River (Bluesky) PEACE RIVER 514 net sections Produced 11,100 boe/d in H1/2024 (84% oil) Expect to bring 9
Slide 21: Canada Heavy Oil: Land Extensions
CANADA HEAVY OIL: LAND EXTENSIONS Leveraging heavy oil expertise and recent exploration success Peace River (Clearwater + Bluesky) Lloydminster (Mannville) 10-section agreement with the Peavine Métis Settlement Farm-in agreement on 17.75 sections of land near Cold Lake brings total land position to
Slide 22: Supplementary Information
SUPPLEMENTARY INFORMATION BAYTEXENERGY.COM
Slide 23: Board of Directors
BOARD OF DIRECTORS Efficient and Independent Board Complementary Skills Suited to Govern the Combined Business Eric T. Greager Mark R. Bly President and Chair of the CEO Board Tiffany (“T.J.”) Trudy M. Don G. Angela Jennifer A. Dave L. Steve D.L. Jeffrey E. Cepak Curran Hrap Lekatsas Maki Pearce Rey
Slide 24: Free Cash Flow Allocation Policy
FREE CASH FLOW ALLOCATION POLICY Direct shareholder returns at 50% of free cash flow(1) Total Debt(2) Above $1.5 billion Total Debt Below $1.5 billion Adjusted Funds Flow (3) Less: Exploration and Development Expenditures Less: Abandonment and Reclamation / Leasing Expenditures Shareholder returns i
Slide 25: Summary of Operating and Financial Metrics
SUMMARY OF OPERATING AND FINANCIAL METRICS Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Benchmark Prices WTI crude oil (US$/bbl) $94.29 $108.41 $91.56 $82.64 $94.23 $76.13 $73.78 $82.26 $78.32 $77.62 $76.96 $80.57 NYMEX natural gas (US$/MMbtu) $4.95 $7.17
Slide 26: 2024 Guidance and Cost Assumptions
2024 GUIDANCE AND COST ASSUMPTIONS Exploration and development expenditures ($ billions) $1.2 - $1.3 Production (boe/d) 152,000 - 154,000 Expenses: Average royalty rate (%) (1) ~ 23% Operating ($/boe) (2) $11.25 - $12.00 Transportation ($/boe) (2) $2.35 - $2.55 General and administrative ($ millions
Slide 27: Forward Looking Statements Advisory
FORWARD LOOKING STATEMENTS ADVISORY In the interest of providing the shareholders of Baytex and potential investors with information regarding Baytex, including management's assessment of future plans and operations, certain statements in this presentation are "forward-looking statements" within the
Slide 28: 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; success obtained
Slide 29: Forward Looking Statements Advisory (Cont.)
FORWARD LOOKING STATEMENTS ADVISORY (CONT.) Financial Outlook Advisory This presentation contains information that may be considered a financial outlook under applicable securities laws about Baytex's potential financial position, including, but not limited to, estimated EBITDA, exploration and deve
Slide 30: Specified Financial Measures Advisory
SPECIFIED FINANCIAL MEASURES ADVISORY In this presentation, we refer to certain specified financial 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
Slide 31: Capital Management Measures Advisory
CAPITAL MANAGEMENT MEASURES ADVISORY This presentation contains the terms "adjusted funds flow“ and "net debt”, which are capital management measures. We believe that the inclusion of these capital management measures provides useful information to financial statement users when evaluating the finan
Slide 32: 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 33: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 33
Slide 34: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 34
Slide 35: Notes
NOTES BAYT E X ENERG Y / NYSE / T SX BT E 35
Slide 36: Contact Information
CONTACT INFORMATION BAYTEX ENERGY CORP. Suite 2800, Centennial Place 520 – 3rd Avenue S.W. Calgary, Alberta T2P 0R3 TF 1.800.524.5521 Eric T. Greager President and Chief Executive Officer Chad L. Kalmakoff Chief Financial Officer Chad E. Lundberg Chief Operating Officer Brian G. Ector Senior Vice Pr