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May Presentation – Baytex Energy Corp.

Baytex Energy Corp. · May 31, 2014 · 53 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. May Presentation – Baytex Energy Corp. – slide 1
    May Presentation
  2. May Presentation – Baytex Energy Corp. – slide 2
    Advisory (Cont.) References herein to initial test production rates, 30-day IP rates and other short-term production rates are useful in confirming the presence of hydrocarbons; however, such rates are not determinative of the rates at…
  3. May Presentation – Baytex Energy Corp. – slide 3
    Investment Highlights Focus on per share growth in production and reserves Organic Oil Growth Long-term, Low-Cost Inventory Sector-leading capital efficiency Operational excellence Meaningful Dividend Focus on dividend growth…
  4. May Presentation – Baytex Energy Corp. – slide 4
    Corporate Profile Summary of Securities Trading Symbol TSX / NYSE: BTE Average Daily Volume (1) Canada: 1,105,900 / U.S.: 168,300 Shares Outstanding (Current) 126.4 million Market Capitalization / Enterprise Value 5.8 billion / 6.6…
  5. May Presentation – Baytex Energy Corp. – slide 5
    Operating Areas Production (Q1 2014) Company Total = 59,502 boe/d Lloydminster Peace River Heavy Oil 33% Heavy Oil 43% Light Oil 13% Gas 11% Operating Income (Q1 2014) Company Total = 197 million (37/boe) Lloydminster…
  6. May Presentation – Baytex Energy Corp. – slide 6
    Oil-Equivalent Production Growth 60,000 40,000 boe / d 61,000 57,196 53,986 50,132 44,341 20,000 40,239 41,382 34,022 34,647 34,292 36,222 0 (1) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Percent…
  7. May Presentation – Baytex Energy Corp. – slide 7
    Reserve Growth / Contingent Resources Proved Probable 350 Oil-Equivalent Reserves (MMboe) 318 300 292 252 250 229 159 200 187 197 96 148 168 89 150 141 146 61 68 52 107 123 39 43 100 37 30 159 140 156 144 116 126…
  8. May Presentation – Baytex Energy Corp. – slide 8
    Balance Sheet Strength ( millions) Q1 2014 Credit Facilities Unused Used Bank Loan (1) 300.6 Long-Term Debt (2),(3) 465.8 Working Capital Deficiency 65.9 Undrawn 549 million, or 65%(1) Total Monetary Debt (3) 832.3 Debt to…
  9. May Presentation – Baytex Energy Corp. – slide 9
    Pending Eagle Ford Acquisition 12
  10. May Presentation – Baytex Energy Corp. – slide 10
    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…
  11. May Presentation – Baytex Energy Corp. – slide 11
    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…
  12. May Presentation – Baytex Energy Corp. – slide 12
    Aurora Acquisition Metrics AUD CAD (1) Notes (1) Exchangerate (CAD/AUD) = 1.01 as at Aurora Share Price 4.10 4.14 March 19, 2014. (2) Aurora reserves based on Baytex Shares Outstanding (fully diluted) 458.6 internal estimates of…
  13. May Presentation – Baytex Energy Corp. – slide 13
    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) 127 165 FFO per Share (C undiluted) 5.50 6.35 FFO Accretion…
  14. May Presentation – Baytex Energy Corp. – slide 14
    Baytex Pro Forma Liquidity (B) Pro Forma C1.5B Coupon Principal Due Equity Issue (1) Long Term Notes: Baytex Series B Debentures (US) 6.750% Feb-2021 0.2 Baytex Series C Debentures (C) 6.625% Jul-2022 0.3 Aurora Debentures (US)…
  15. May Presentation – Baytex Energy Corp. – slide 15
    Pro Forma Production and Reserves (1) Baytex Stand-Alone Baytex Pro Forma Aurora Production (2014E) = 60-62 Mboe/d Combined Production = 85 Mboe/d NGL 3% Natural Gas Light Oil Natural Gas 11% 13% Light Oil 11% NGL 13% 21%…
  16. May Presentation – Baytex Energy Corp. – slide 16
    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…
  17. May Presentation – Baytex Energy Corp. – slide 17
    Key Attributes of Aurora (continued) - Increasing Development Performance and Recovery - A subsidiary of Marathon Oil Corporation is the operator of the majority of Auroras Eagle Ford position - Continuous improvements in drilling…
  18. May Presentation – Baytex Energy Corp. – slide 18
    Eagle Ford Acreage Position Aurora holds 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,…
  19. May Presentation – Baytex Energy Corp. – slide 19
    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 Auroras acreage is amongst top operators most of the acreage including…
  20. May Presentation – Baytex Energy Corp. – slide 20
    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;…
  21. May Presentation – Baytex Energy Corp. – slide 21
    Baytex Pro Forma Three Key Oil Resource Plays 80% of Baytexs 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…
  22. May Presentation – Baytex Energy Corp. – slide 22
    Profit Investment Ratio 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x Seal Cold Heavy Multi-Lateral - Hz SE Sask Viewfield Bakken - Hz Ante Creek Montney (75% oil) - Hz Marcellus (dry gas) - Hz Kaybob Montney Oil - Tier 1 - Hz…
  23. May Presentation – Baytex Energy Corp. – slide 23
    Summary of the Eagle Ford Acquisition - 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…
  24. May Presentation – Baytex Energy Corp. – slide 24
    Scheme of Arrangement Summary Scheme of Arrangement under Australian law expected to take 125 days to complete Key Dates (1) February 6 Implementation Agreement executed March 24 Scheme of Arrangement documents drafted and finalised…
  25. May Presentation – Baytex Energy Corp. – slide 25
    Key Projects Overview
  26. May Presentation – Baytex Energy Corp. – slide 26
    Peace River Oil Sands 306 net sections of oil sands leases 553 million barrels of economic contingent resource * Area Statistics Production (Q1/2014) 25,800 bbl/d 2P Reserves (YE13) (1) 114 mmbbls Drilling Inventory (2) 5 years…
  27. May Presentation – Baytex Energy Corp. – slide 27
    Multi-Lateral Cold Horizontal Wells Reservoir Characteristics (1) Formation Bluesky Depth 600 700 metres Oil Quality 11 API Average Porosity 28% Permeability 0.5 5.0 darcies Oil Saturation 70% Recovery Factor 5 7% Well…
  28. May Presentation – Baytex Energy Corp. – slide 28
    Lloydminster Lloydminster Heavy Oil Heavy Oil 730 net sections; 212 million barrels of economic contingent resource * Area Statistics Production (Q1/2014) 19,400 bbl/d 2P Reserves (YE13) (1) 114 mmbbls Drilling Inventory (2)…
  29. May Presentation – Baytex Energy Corp. – slide 29
    Lloydminster Development Vertical Wells Completed Well Cost 450,000 Production (30-day IP) 30-50 bbl/d EUR 30-50 mbbl Capital Efficiency 11,250 per bbl/d Development Cost 11.25/bbl Horizontal Wells Completed Well Cost…
  30. May Presentation – Baytex Energy Corp. – slide 30
    Bakken / Three Forks Development 126 net sections; 34 million barrels of economic contingent resource * SASKATCHEWAN Bakken-Three Forks Baytex Lands Production (Q1/2014) 3,100 bbl/d 2P Reserves (YE13) 54 mmbbl NORTH DAKOTA…
  31. May Presentation – Baytex Energy Corp. – slide 31
    Bakken / Three Forks Development Current development predominantly in the Three Forks formation Additional potential to develop Middle Bakken Evolution of frac staging: initially 6 stages/well 20 stages/well in 2011 30+…
  32. May Presentation – Baytex Energy Corp. – slide 32
    Thermal Projects Targeting 10% - 15% of 2017E production from three thermal projects Thermal provides a source of stable, low decline production Thermal Capacity Area Project Type (1) 2017E Current Status Peace River Cliffdale…
  33. May Presentation – Baytex Energy Corp. – slide 33
    Corporate Growth Strategy
  34. May Presentation – Baytex Energy Corp. – slide 34
    2014 Operating Plan Targeting 6% Growth 2014 Production Guidance 2014 Capital Budget and Wells Drilled Amount Wells Drilled - 485 million capital budget ( millions) (net) Peace River 95% of expenditures directed Conventional 178 36…
  35. May Presentation – Baytex Energy Corp. – slide 35
    Corporate Growth Strategy Production (boe/d) Conventional Drilling Inventory Peace River Multi-laterals 5 years Lloydminster Heavy Oil 6.5 years North Dakota Bakken 10+ years Conventional Oil and Gas 10+ years Thermal Capacity…
  36. May Presentation – Baytex Energy Corp. – slide 36
    Why Invest in Baytex Superior Asset Base Income Payout Proven Track Record - Low cost development - Committed to paying a - Best-in-class balance sheet inventory oil focus meaningful dividend - Sophisticated risk - Sector leading…
  37. May Presentation – Baytex Energy Corp. – slide 37
    Appendix: Crude Oil Marketing
  38. May Presentation – Baytex Energy Corp. – slide 38
    2014: A Break Out Year for Canadian Heavy -Market conditions remain positive with the forward market indicating a WCS differential of 20% for the remainder of this year (last nine months) -Positive catalysts unfolding in 2014 should…
  39. May Presentation – Baytex Energy Corp. – slide 39
    Heavy Oil Differential WCS and Maya 42
  40. May Presentation – Baytex Energy Corp. – slide 40
    Crude Oil Rail Exports North Dakota Western Canada 800 Q4 / 2014 Projected Western Canada Rail Capacity (800 - 900 mbbl/d) 700 Mid-2014 Projected Western Canada 600 Rail Capacity ( 600 mbbl/d) 500 Mbbl/d 400 300 200…
  41. May Presentation – Baytex Energy Corp. – slide 41
    Marketing - Crude by Rail Rail a Key Component of Market Access - Trucking flexibility helps optimize value of production - Rail has become an effective vehicle for management of heavy oil differentials - Undiluted heavy oil sales…
  42. May Presentation – Baytex Energy Corp. – slide 42
    Oil Marketing Portfolio Q2 2014 Heavy Oil Sales Portfolio WTI Financial Hedging Q2 / 2014 % Hedged 62% Fixed Price US99.47/bbl Q3 / 2014 % Hedged 41% Fixed Price US97.53/bbl FY 2014 % Hedged 48% Fixed Price US98.52/bbl…
  43. May Presentation – Baytex Energy Corp. – slide 43
    Heavy Oil Hedge Coverage Q2/2014 FY 2014 Term Pipeline Blended WCS (bbl/d) 5,000 4,750 Equivalent Heavy Production (bbl/d) 3,850 3,650 % of Gross Heavy Production 9% 8% Financial Derivatives Financial Blended WCS index (bbl/d) 2,325…
  44. May Presentation – Baytex Energy Corp. – slide 44
    Midstream Heavy Oil Fundamentals Infrastructure Development Source: Canadian Association of Petroleum Producers Crude Oil Forecast, Markets and Pipelines Report, June 2012. 47
  45. May Presentation – Baytex Energy Corp. – slide 45
    Midstream Heavy Oil Fundamentals Near-Term Pipeline Projects: Seaway and Flanagan South Source: Enbridge 48
  46. May Presentation – Baytex Energy Corp. – slide 46
    U.S. Gulf Coast HeavyUS OilGulf Coast Heavy Oil Demand Demand U.S. imports of Canadian heavy oil rose Total U.S. heavy oil imports averaged to 1.69 million bbl/d in December 2013, 3.99 million bbl/d in 2013, 39% and averaged 1.55…
  47. May Presentation – Baytex Energy Corp. – slide 47
    Supplementary Information - Financial 50
  48. May Presentation – Baytex Energy Corp. – slide 48
    Share Ownership Breakdown Ownership Breakdown Institutional 63% Retail 35% US - Retail 10% Europe/Asia - Institutional 4% Insiders 2% US - Institutional 8% Insiders 2% 100% Canada 76% U.S. 18% Canada - Retail 25% Canada -…
  49. May Presentation – Baytex Energy Corp. – slide 49
    2014E Funds from Operations (C mm) and Debt to FFO Heavy Oil Differential (% of WTI) 18% 23% 28% WTI (US/bbl) 90 710 (1.2x) 671 (1.3x) 632 (1.4x) 95 743 (1.1x) 703 (1.2x) 661 (1.3x) 100 776 (1.0x) 733 (1.1x) 690 (1.2x)…
  50. May Presentation – Baytex Energy Corp. – slide 50
    2014E Funds from Operations Sensitivities Funds from Operations Impact (C Millions) With Current Without Hedges Hedges WTI +/- US1.00/bbl 10.6 15.4 Natural Gas +/- C0.25/mcf 3.1 3.4 Heavy Oil Differential +/- 1% 11.4 17.9…
  51. May Presentation – Baytex Energy Corp. – slide 51
    Other Commodities / FOREX Hedge Coverage Q2/2014 Q3/2014 FY 2014 Natural Gas % of Volumes Hedged at Fixed Price (1) 42% 42% 40% Average Fixed Price (US/mmBtu) 4.15 4.15 4.17 % of Volumes Hedged Using Collars (1) 12% 12% 14% Average…
  52. May Presentation – Baytex Energy Corp. – slide 52
    Capital Program Efficiency 3-Year 2011 2012 2013 Average 2011-13 Capital Expenditures (millions) Exploration and development 367.9 418.6 550.9 1,337.4 Acquisitions (net of dispositions) 148.8 (170.9) (39.1) (61.2) Total 516.6 247.7…
  53. May Presentation – Baytex Energy Corp. – slide 53
    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 Rodney D. Gray www.baytexenergy.com…

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