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January 2018 Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Jan 22, 2018 · 43 slides

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Slides

  1. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 2
    PEY.TO Who We Are PEYTO Exploration & Development Corp. N 5th Largest Natural Gas Producer in Canada N Pure Play Alberta Deep Basin 110115,000 boe/d Gas & NGLs N Returns Focused Strategy Avg ROCE 17%, ROE 31% over last 18 yrs…
  3. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 3
    PEY.TO Total Shareholder Return PEYTO Exploration & Development Corp. 60 120,000 50 100,000 40 80,000 30 60,000 Future 20 Prospects 40,000 10 Past 20,000 Profits - 0 CTD Dividend (/share) Month End Closing…
  4. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    The Peyto Strategy What We Believe PEYTO Exploration & Development Corp. We believe that: N Natures gas is the fuel for the future. N Our focus should be on maximizing the return on invested capital your capital. N By selectively…
  5. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    The Peyto Strategy Counter Cyclical Growth Per Share PEYTO Exploration & Development Corp. 2500 80 Hit 2017 YE Target 115,000 boe/d 70 2000 60 1500 50 40 1000 30 20 500 10 Growth rate in Prod/div. 0 0 adj. share…
  6. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 6
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 600 Peyto Earnings 400 CTD Q3/17 200 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  7. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    The Peyto Strategy More Profit Per Dollar Of Capital PEYTO Exploration & Development Corp. Earnings/Capital 2001-2016 50% 40% 30% 20% 10% 0% CTD Earnings/Capital -10% 2001-2016 -20% -30% PEY ARX CNQ BNE VET ERF COG…
  8. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 8
    Q3/17 Q3/17 Dividend Sustainability Peyto Ctd. Dist/Div. Peyto Ctd. Earnings The Peyto Strategy 1,000 1,500 2,000 2,500 3,000 0 500 Q1 2000 Q3 2000 Q1 2001 Q3 2001 Q1 2002 Q3 2002 Q1 2003 Q3 2003 Q1…
  9. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    Peytos Profitable Business PEYTO Exploration & Development Corp. 10 1/19/2018
  10. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 10
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & Development Corp. 2017 PEY 2014 PEY 2015 PEY 2016 PEY 2017F Land/Acq/Disp Seismic Drilling PDP FD&A /mcfe (2.25) (1.64) (1.44) (1.45) Compl.…
  11. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    Peytos Profitable Business Competitive In The North American Marketplace PEYTO Exploration & Development Corp. 100% Montney 65% DB/35% Mont. 100% Deep Basin VII 2016 TOU 2016 PEY 2016 PDP FD&A /mcfe (3.75) (2.45) (1.44) Cash…
  12. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Profitable Business The Price Bar Is Now Very Low, We Must Be Lower PEYTO Exploration & Development Corp. AECO 10 Monthly /GJ Peyto Realized Gas Price (/mcfe) 36% Avg. Profit 8 Cum To Date 6 Bonus 4 PDP…
  13. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    Peytos Profitable Business Results in a Low Cost Advantage PEYTO Exploration & Development Corp. Operating Costs Transporation Costs Large/Integrated Producers 20 Intermediate Producers 5 Junior Producers Gas Producers 4 15…
  14. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    Peytos Unique Assets PEYTO Exploration & Development Corp. 15 1/19/2018
  15. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Assets Geographically Focused Core Areas PEYTO Exploration & Development Corp. 480,000 net acres R10 R5W6 R27 R22 R17 R12 R7W5 9 operated gas plants Cutbank ---(835 mmcf/d net capacity) 1600+ km pipelines 1200+ producing…
  16. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Assets Deep Basin Permeability Segregation PEYTO Exploration & Development Corp. FOOTHILLS STRUCTURES GAS AS ING INCRE BILITY EA PERM WATER TRANSITION ZONE WATER GAS SE INCREAH AREA OF GAS DEPT…
  17. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    Peytos Assets Multi Zone Stacked Sandstone Reservoirs PEYTO Exploration & Development Corp. Detailed Petrophysical work on the Spirit River sands revealed 30% more reserves per section Up to per section* 18…
  18. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 18
    Peytos Assets Deep Basin Lands Go A Long Way PEYTO Exploration & Development Corp. 800 Peyto Lands 700 600 Net Sections 500 400 Net Peyto Sections 300 200 100 - Net Sections of Cardium, Dunvegan, Notikewin,…
  19. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 19
    Peytos Assets Large Hz MSF Inventory PEYTO Exploration & Development Corp. Done1 To Do Total Total Total Total Hz(Vt) Hz Locations Vertical Hz Locations Unbooked Wells Wells Booked* (3) 1 11 (6) 434 72 176(14) 409 5 1 5…
  20. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 20
    Peytos Assets Spirit River Group Potential Land Expiries PEYTO Exploration & Development Corp. AB Land Sales 5 yr Term 6,000,000 1,000 900 5,000,000 800 700 4,000,000 600 3,000,000 500 400 2,000,000 300 200 1,000,000 100…
  21. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 21
    Peytos Assets Greater Sundance Area PEYTO Exploration & Development Corp. Peyto Oldman & Oldman North Peyto Wildhay Sweet Gas Sweet Gas Plant Plants 90 mmcf/d Peyto Nosehill 250 mmcf/d Sweet Gas Plant 125 mmcf/d Peyto…
  22. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    Peytos Assets The Greater Brazeau River Area PEYTO Exploration & Development Corp. Peyto Brazeau Sweet Gas Plant (2013) 140 mmcf/d Peyto Brazeau River 40,000 140 mmcf/d Sweet Gas Plant 35,000 30,000 Boe/d…
  23. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 23
    Peytos Assets Facility Ownership And Control PEYTO Exploration & Development Corp. Cutbank Kakwa Oldman & Oldman North Nosehill Wildhay Galloway Swanson Peyto Nosehill Gas Plant: 125 MMCF/d throughput Peyto Gas…
  24. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    Peytos Future Annual Production Additions PEYTO Exploration & Development Corp. 2011 - 379MM - 17,500/boe/d Annual Production Additions 10,900/boe/d Capital Efficiency 2012 - 618MM - 17,600/boe/d 60,000 2013 - 578MM - 15,100/boe/d…
  25. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 26 1/19/2018
  26. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Returns Focus On Returns Drives Capital Discipline PEYTO Exploration & Development Corp. 2017 10,900/boe/d 120,000 2016 - 10,800/boe/d 900 2015 - 11,600/boe/d 2017 115,000 boe/d Exit 2014 - 16,800/boe/d Annual Production…
  27. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    Peytos Returns High Returns On Your Capital And Equity PEYTO Exploration & Development Corp. 60% 12 50% 10 40% 8 30% 6 18 yr Avg ROE to 2016 20% 4 10% 2 0% 0 Return On Capital Employed (%) Return On Equity (%)…
  28. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Returns Template Economics At Strip PEYTO Exploration & Development Corp. Species IP Avg. EUR D&C IRR IRR IRR IRR MMcf NGLs BCFE MM Jan 4 Dec 7 2.00 2.50 bbl/MM Strip Strip Flat Flat Sundance Wilrich 5.3 10 2.6 2.8 4% 4% 6%…
  29. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    Peytos Future PEYTO Exploration & Development Corp. 30 1/19/2018
  30. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Future Take Action Now To Drive Costs Down PEYTO Exploration & Development Corp. 40 bbl/mmcf new adds in 2018 increases liq to 12% PEY 2017F PEY 2018 Goals PEY 2019 Goals 91% Gas 2.30/GJ 91% Gas 1.30/GJ*1.15 88% Gas…
  31. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Future 2018 Outlook PEYTO Exploration & Development Corp. Drill 50-60Hz Wells (Liquids Rich Natural Gas) vs 143 in 2017 Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base Shoot…
  32. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Future Drive Down Supply Cost Before Returning to Growth PEYTO Exploration & Development Corp. H1 60MM H2 160MM 6 17,500/boe/d 17,600/boe/d 12 wells 40 wells 17,300/boe/d 16,800/boe/d 15,100/boe/d 5 100,000…
  33. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 33
    Peytos Future Limited Exposure to AECO Daily (5A) PEYTO Exploration & Development Corp. Peyto AECO Gas Marketing Portfolio 100% 0% 8% 8% 6% 7% 12% 15% 90% 85% target 35% 80% 47% 70% % of forecast gas production 78% 78%…
  34. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Future Careful Use Of Debt For Leveraged Returns PEYTO Exploration & Development Corp. 2016 Net Debt/PDP NPV10 100% 80% 60% 40% 20% 0% BXE NVA AAV PWT VET TOU BNP TET ARX ERF WBE…
  35. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Future Canada Has Role To Play But Transport Costs Key PEYTO Exploration & Development Corp. 2018 Transport Transport Market Cost Net Price Costs as % Market Price (Firm+Fuel) Received of Price To AECO 1.73 0.19 1.54…
  36. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 36
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Hedging Strategy N Gas Marketing N FAQ 37 1/19/2018
  37. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 37
    Quarterly Track Record PEYTO Exploration & Development Corp. 2017 2016 2015 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Operations Production Oil & NGLs (bbl/d) 8,958 8,319 9,586 7,457 8,938 7,247 6,621 7,008 6,643 6,943 5,352…
  38. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 38
    Organic Business Model Peytos Tax Pools PEYTO Exploration & Development Corp. 1,800 1,600 1,400 1,200 Federal Tax Pools Millions 1,000 800 Q4/16 600 400 200 - 1999 2001 2003 2005 2007 2009 2011 2013 2015 CEC UCC…
  39. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Gas Marketing Future Sales (1 of 4) PEYTO Exploration & Development Corp. Hedges by year (averaged) Year Vol. GJ/d Price/GJ Vol. mcf/d Price/mcf 2015 344,644 3.48 299,690 4.00 2016 460,656 2.77 400,915 3.18 2017 554,904 2.58…
  40. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 40
    Gas Marketing Future Sales (2 of 4) PEYTO Exploration & Development Corp. 41 1/19/2018 Assuming an Average Heating Value of 1.15 GJ/mcf for Peytos gas
  41. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Gas Marketing Future Sales (3 of 4) PEYTO Exploration & Development Corp. Aug-16 Aug-17 Aug-18 Aug-19 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 Feb-16…
  42. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Gas Marketing Future Sales (4 of 4) PEYTO Exploration & Development Corp. Aug-16 Aug-17 Aug-18 Aug-19 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 Feb-16…
  43. January 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 43
    Gas Marketing Successful Hedging Strategy Smoothes Volatility PEYTO Exploration & Development Corp. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto…

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