Baytex Energy Corp. · TSX:BTE
Baytex Energy — FY2020 Earnings Presentation
35 slides from Baytex Energy's earnings presentation, February 2021
Slide 1: Investor Presentation February 2021
Investor Presentation February 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) 8.4 million Shares Outstanding (2) 561 million Market Capitalization / Enterprise Value (2) $628 million / $2,476 million Operating Statistics Production (Gross W.I.) (3) 73,000 – 77,000 boe/d PEACE RIVER Production Mix
Slide 7: ESG Highlights
ESG Highlights GHG Emission Reduction Safety 46% reduction in GHG 41% reduction in lost time emissions intensity through incident frequency in 5 year-end 2020, relative to years 2018 baseline Gas Conservation Indigenous Relations 99.5% routine gas Recent agreements with conservation in Peace River W
Slide 8: 2020 Highlights
2020 Highlights We responded aggressively to the downturn brought on by Covid-19, improved our cost structure and capital efficiencies, and enhanced our overall sustainability Action 2020 Highlights • Extended maturity of credit facilities to April 2024 Negotiated bank credit facility extension and
Slide 9: 2021 Priorities and Free Cash Flow Profile
2021 Priorities and Free Cash Flow Profile 2021 Priorities Free Cash Flow Profile (1) (2) Invest at sustaining capital levels $700 of $225 to $275 million $600 $500 Deliver stable production of $400 $ millions 73,000 to 77,000 boe/d $300 $200 Maximize free cash flow and focus $100 on continued de-le
Slide 10: High Graded Portfolio with Strong Capital Efficiencies
High Graded Portfolio with Strong Capital Efficiencies Improved capital efficiencies and high graded inventory increases sustainability at lower prices Economic Drilling Locations (1) Capital Efficiency (2) 3,000 $17,000 2,500 per boe/d Net Wells 2,000 $12,000 1,500 per boe/d 1,000 500 0 US$50 US$55
Slide 11: 2021 Capital Program
2021 Capital Program 2021 Guidance (1) • Cash neutrality (capital program fully funded) at US$35/bbl WTI E&D CapEx $225 - 275 million Production 73,000 - 77,000 boe/d • Capital efficiencies of approximately Oil and NGLs 81% $12,000 per boe/d across the portfolio Capital Budget CapEx ($MM) (2) Drill,
Slide 12: Financial Liquidity
Financial Liquidity Balance Sheet (2) $ millions • Credit Facilities ~ 35% Credit facilities $651 Undrawn Long-term notes $1,148 • $367 million of undrawn credit Long-term debt $1,799 capacity and liquidity, net of Working Capital deficiency $48 working capital, of $319 million Net Debt $1,848 • Fin
Slide 13: Crude Oil Hedge Portfolio
Crude Oil Hedge Portfolio Full-Year H1/2021 H2/2021 2021 WTI Fixed Hedges Volumes (bbl/d) 4,000 4,000 4,000 Fixed Price (US$/bbl) $45.00 $45.00 $45.00 WTI 3-Way Option Volumes (bbl/d) 17,500 17,500 17,500 Average Sold Put / Put / Sold Call (US$/bbl) (1) $35/$45/$52 $35/$45/$52 $35/$45/$52 Total Hedg
Slide 14: 2021E Adjusted Funds Flow Sensitivities
2021E Adjusted Funds Flow Sensitivities Estimated Effect on Annual Adjusted Funds Flow ($MM) (1) Including Including Sensitivities Hedges when Excluding Hedges when WTI is between Hedges WTI is > US$45/bbl and US$52.40/bbl US$52.40/bbl Change of US$1.00/bbl WTI crude oil $22.7 $20.7 $13.0 Change of
Slide 15: Asset Overview
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Slide 16: Asset Highlights
Asset Highlights Geographic and play diversification with ~ 10 or more years drilling inventory in each core area Eagle Ford Viking Heavy Oil Pembina Duvernay Production 31,200 boe/d 19,600 boe/d 23,300 boe/d 1,500 boe/d (Gross; 2020) Oil and NGLs 77% 91% 91% 82% (Gross; 2020) 2P Reserves (1) 215 mm
Slide 17: Eagle Ford: Core of Karnes County
Eagle Ford: Core of Karnes County • 19,900 net acres in the core of the Eagle Ford shale in south Texas Wilson • Four AMI’s (Longhorn, Sugarloaf, Ipanema and Excelsior) with average 25% W.I. Karnes • 2020 production of 31,179 LONGHORN boe/d (77% liquids) Atascosa • 2020 - 62 gross (14.1 net) wells e
Slide 18: Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory
Eagle Ford: Strong Free Cash Flow and Deep Drilling Inventory > 10 year drilling inventory (2) Asset Level Free Cash Flow (1) (C$ millions) 300 ~ 250 net locations $800 million cumulative asset level 250 free cash flow since 2016 200 150 ~ 18 100 net wells $96 50 on- stream 0 2021 Program Remaining
Slide 19: 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 19,600 boe/d (91% oil) in 2020 • Drilling activity resumed in December with two rigs mobilized Kerrobert Plenty • Esther/Hoosier Greater Gleneath Capital reduction e
Slide 20: 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 21: Peace River: Innovative Multi-Lateral Development
Peace River: Innovative Multi-Lateral Development Performance Drivers • Produced 11,800 boe/d in 2020 (84% oil) Golden • Dominant 560 net sections • ~ 6 net wells planned for H2/2021 Seal Harmon Valley Peavine Lands • Q1/2020 strategic agreement with Peavine Metis settlement • 60 sections of land •
Slide 22: Lloydminster: Significant Land Position and Drilling Inventory
Lloydminster: Significant Land Position and Drilling Inventory Performance Drivers • Produced 11,500 boe/d in 2020 (98% oil) Ardmore/Cold Lake • Strong capital efficiencies • Applying multi-lateral horizontal drilling and Lindbergh production techniques Lloydminster Tangleflags • ~ 30 net wells plan
Slide 23: 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 24: 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 1,500 boe/d (82% liquids) in 2020 • Two wells drilled in 2020 Black Oil demonstrate repeatability of 11- 30
Slide 25: 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 26: Corporate Sustainability
Corporate Sustainability TEX ENERGY CORP. BAY
Slide 27: 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 28: 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 29: A Culture of Commitment
A Culture of Commitment How it contributes to Objective What we’ve done Result value creation Ensure our employees and 42% reduction in corporate spill ENVIRONMENT Reduces costs and maintains Responsibly develop contractors uphold our procedures volumes, over 5 years social license our assets for sp
Slide 30: Supplementary Information
Supplementary Information BAYTEX ENERGY CORP. TSX
Slide 31: 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 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 $39.40 NYMEX natural gas (US$/mcf) $3.15 $2.64 $2.23 $2.50 $2.63 $1.95 $1.72 $1
Slide 32: Reserves Summary (Gross)
Reserves Summary (Gross) 2P Reserves Breakdown 2P Reserves by Asset 2P Reserves by Commodity Pembina Other Duvernay Natural Gas PDP Probable Eagle Heavy Oil Ford Light Oil Heavy & NGL Oil PDNP + PUD Viking Pembina Category (1) Eagle Ford Viking Heavy Oil Other Total Duvernay Proved Developed Produci
Slide 33: 2021 Guidance and Cost Assumptions
2021 Guidance and Cost Assumptions Exploration and development expenditures ($ millions) $225 - $275 Production (boe/d) 73,000 – 77,000 Expenses: Royalty rate (%) 18% - 18.5% Operating ($/boe) $11.50 - $12.25 Transportation ($/boe) $1.00 - $1.10 General and administrative ($ millions) $42 ($1.53/boe
Slide 34: Notes
Notes BAYTEX ENERGY CORP. 34
Slide 35: 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