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June 2018 Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Jun 12, 2018 · 45 slides

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Slides

  1. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. June 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 100110,000 boe/d Gas & NGLs N Returns Focused Strategy Avg ROCE 16%, ROE 30% over last 19 yrs,…
  3. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 3
    PEY.TO Peyto Is The 5th Largest Gas Producer In Canada PEYTO Exploration & Development Corp. 1.8 1.6 1.4 1.2 (Bcf/d) 1.0 0.8 0.6 0.4 0.2 0.0 YE 2016 YE 2017 Source: NBF, geoSCOUT; assumes 15% gas shrink…
  4. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    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…
  5. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    Peytos History What Weve Done Over 19 Years PEYTO Exploration & Development Corp. N Goods and Services Purchased = 5.7 Billion N Land Purchased = 585 sections N Wells Drilled = 1,471 N Reserves Discovered = 5.8 TCFe N Production…
  6. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 6
    Peytos Contribution We Heat Your Homes PEYTO Exploration & Development Corp. Alberta Energy states that typical Alberta households use approximately 120 GJ of natural gas per year. As the 5th largest gas producer in Canada,…
  7. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    The Peyto Strategy PEYTO Exploration & Development Corp. 8 6/12/2018
  8. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 8
    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…
  9. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    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…
  10. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 10
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 700 600 500 Peyto Earnings 400 CTD Q4/17 300 177 200 100 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  11. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & Development Corp. 2,500 2,000 1,500 (MM) Peyto Ctd. Earnings Q4/17 1,000 500 0 Q4 1999 Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006…
  12. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & Development Corp. 2017 PEY 2014 PEY 2015 PEY 2016 PEY 2017 Land/Acq/Disp Seismic Drilling PDP FD&A /mcfe (2.25) (1.64) (1.44) (1.36) Compl.…
  13. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    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 CTD 6 Bonus 4 PDP FD&A…
  14. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    Peytos Profitable Business Competitive In The North American Marketplace PEYTO Exploration & Development Corp. 100% Montney 65% DB/35% Mont. 100% Deep 100% Montney 10% DB/90% Mont. VII 2017* TOU 2017* Basin PEY 2017 AAV 2017* ARX…
  15. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Profitable Business Results in a Low Cost Advantage PEYTO Exploration & Development Corp. 2.45 5.53 0.05 1.23 BOE factor - 6 mcf = 1 bbl of oil equivalent 16 Data from Peters & Co. 6/12/2018 Gas producers…
  16. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Unique Assets PEYTO Exploration & Development Corp. 17 6/12/2018
  17. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    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…
  18. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 18
    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…
  19. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 19
    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* 20…
  20. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 20
    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* (2) 2 (3) 440 74 174(13) 414 5 1 5 8…
  21. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 21
    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,…
  22. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    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…
  23. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 23
    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…
  24. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    Peytos Assets Facility Ownership And Control PEYTO Exploration & Development Corp. Cutbank Kakwa Oldman & Oldman North Nosehill Wildhay Galloway Swanson Peyto Gas Plants YE 2014 YE 2015 YE 2016 YE 2017 YE 2018 WI…
  25. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    Peytos Assets Unique Infrastructure Location PEYTO Exploration & Development Corp. Alliance Oldman & Oldman North Nosehill Wildhay Galloway Swanson 240 kV Power Lines Highway 16 Greater Sundance Area Bickerdike…
  26. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets Potential For Additional Liquids Extraction PEYTO Exploration & Development Corp. Oldman and Nosehill Oldman North Wildhay Propane Gas Phase Value Far Less Than C3 Value (/bbl of liq eq.) Liquid Value…
  27. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    Peytos Assets The New Cardium Play High Grade Land Base PEYTO Exploration & Development Corp. 28 6/12/2018
  28. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets The New Cardium Play Abundant Opportunities PEYTO Exploration & Development Corp. Oldman & Oldman North 02-21 04-10 14-07 Nosehill Wildhay 16-34 Swanson Galloway 01-17 Total Greater Sundance Cardium…
  29. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    Peytos Assets The New Cardium Play A Double PEYTO Exploration & Development Corp. Old Cardium Hz Well Design 1-17 EUR 2.75 BCFe IRR 72% (at strip prices, 1.5 yr payout) IP30 1.8 mmcf/d raw gas IRR 9% C5 25 bbl/mmcf (at 0 gas…
  30. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Assets Strategies to Increase LGR to 40 bbls/mmcf PEYTO Exploration & Development Corp. Deep Cut adds another 10-15 bbls/mmcf Forecast Q4 2017 NGL Split YE 2019 forecast NGL Split Condensate (C5+) 6,489 bbls/d…
  31. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Returns Template Economics At Strip PEYTO Exploration & Development Corp. Species IP Avg. EUR D&C IRR IRR IRR IRR IRR MMcf NGLs BCFE MM Jan 4 Dec 7 2.00 2.50 2.50 bbl/M Strip Strip Flat Flat esc M Sundance Wilrich 5.3 10 2.6…
  32. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Returns 2017 Full Cycle Returns By Formation PEYTO Exploration & Development Corp. 2017 Earnings Driven ROCE 8% Corporate Estimated WACC 5% Total PP&E 3,585 13% Field Level Return 2017 CAPEX 521 17% Field Return Rem.…
  33. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 33
    Peytos Returns High Returns On Your Capital And Equity PEYTO Exploration & Development Corp. 60% 12 50% 10 40% 8 19 yr Avg ROE to 2017 30% 6 20% 4 11% 10% 8% 2 0% 0 Return On Capital Employed (%) Return On…
  34. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Future PEYTO Exploration & Development Corp. 35 6/12/2018
  35. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Future 2018 Outlook PEYTO Exploration & Development Corp. Drill 50-60Hz Wells (Liquids Rich Natural Gas) vs 142 in 2017 Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base Shoot…
  36. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 36
    Peytos Future Lower Supply Cost Before Returning to Growth PEYTO Exploration & Development Corp. Budget for summer In this scenario, gas price 15% of Q4/19 6 production weakness would be liquid (16,500 boe/d) 17,500/boe/d…
  37. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 37
    Peytos Future Lower Costs and Increase Liquids to Preserve Profit PEYTO Exploration & Development Corp. 40 bbl/mmcf new adds in 2018/19 increases liq to 12% PEY 2017 PEY 2018 Goals PEY 2019 Goals 91% Gas 2.30/GJ 90% Gas…
  38. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 38
    Gas Marketing Future Market Diversification and Gas Price Protection PEYTO Exploration & Development Corp. 6 2018 Budget 2019 Forecast 2017 200-250MM 250-375MM Capex 521MM 5 100,000 Includes 140,000 MMBTU/d 4 summer NYMEX…
  39. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Gas Marketing Fixed Price Swaps Settled Against AECO 7A PEYTO Exploration & Development Corp. Hedges by year (averaged CDN) GAS 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…
  40. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 40
    Gas Marketing The Good News, Pipe Is Coming PEYTO Exploration & Development Corp. 41 Source: TCPL 2017 Q4 Conference Call Presentation Feb 15, 2018 6/12/2018
  41. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Gas Marketing N Leverage 42 6/12/2018
  42. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Quarterly Track Record PEYTO Exploration & Development Corp. 2018 2017 2016 2015 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Operations Production Oil & NGLs (bbl/d) 10,043 9,337 10,479 8,958 8,319 9,586 7,457 8,938 7,247…
  43. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 43
    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 Q4/17 600 400 200 - 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 CEC…
  44. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 44
    Gas Marketing Successful Hedging Strategy Smoothes Volatility PEYTO Exploration & Development Corp. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto Peyto…
  45. June 2018 Corporate Presentation – Peyto Exploration & Development Corp – slide 45
    Peytos Debt Careful Use Of Debt For Leveraged Returns PEYTO Exploration & Development Corp. Peyto Net Debt/PDP NPV10 100% 80% Peyto becomes NAIC2 rated, gains access to cheaper term debt 60% 40% 20% Debt/PDP NPV10…

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