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Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Nov 7, 2018 · 48 slides

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Slides

  1. Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. 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 100,000 boe/d Gas & NGLs N Returns Focused Strategy Avg ROCE 16%, ROE 30% over last 19 yrs,…
  3. 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. Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    PEY.TO Total Shareholder Return PEYTO Exploration & Development Corp. Peyto Exploration and Development Corp. 60 20 Year Trading History 120,000 Month End Closing Price (/share) 50 100,000 40 80,000 11.61/share 30 Oct…
  5. Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    Peytos History What Weve Done Over 20 Years PEYTO Exploration & Development Corp. N Goods and Services Purchased = 5.8 Billion N Land Purchased = 646 sections N Wells Drilled = 1,512 N Reserves Discovered = 5.8 TCFe (YE 2017) N…
  6. 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. Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    The Peyto Strategy PEYTO Exploration & Development Corp. 8 11/7/2018
  8. 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. Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    The Peyto Strategy Counter Cyclical Growth Per Share PEYTO Exploration & Development Corp. 2500 80 70 2000 60 1500 50 40 1000 30 20 500 10 Growth rate in Prod/div. 0 0 adj. share (last 9 yrs) Q2 2001 Q1 2002 Q4…
  10. 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 Q3/18 300 177 200 100 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  11. Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    Q3/18 Q3/18 Dividend Sustainability Peyto Ctd. Dist/Div. Peyto Ctd. Earnings The Peyto Strategy (MM) 0 500 1,000 1,500 2,000 2,500 3,000 Q4 1999 Q2 2000 Q4 2000 Q2 2001 Q4 2001 Q2 2002 Q4 2002 Q2 2003 Q4…
  12. Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Profitable Business PEYTO Exploration & Development Corp. 13 11/7/2018
  13. Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    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.…
  14. Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    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…
  15. Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    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…
  16. Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Profitable Business Results in a Low Cost Advantage PEYTO Exploration & Development Corp. 2.36 5.10 (0.18) 0.87 BOE factor - 6 mcf = 1 bbl of oil equivalent 17 Data from Peters & Co. 11/7/2018 Gas producers…
  17. Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    Peytos Unique Assets PEYTO Exploration & Development Corp. 18 11/7/2018
  18. Corporate Presentation – Peyto Exploration & Development Corp – slide 18
    Peytos Assets Geographically Focused Core Areas PEYTO Exploration & Development Corp. 480,000 net acres 9 operated gas plants Cutbank ---(835 mmcf/d net capacity) 1600+ km pipelines 1200+ producing zones Kakwa 100,000 boe/d…
  19. Corporate Presentation – Peyto Exploration & Development Corp – slide 19
    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…
  20. Corporate Presentation – Peyto Exploration & Development Corp – slide 20
    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* 21…
  21. Corporate Presentation – Peyto Exploration & Development Corp – slide 21
    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…
  22. Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    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,…
  23. 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 Gas Plants YE 2014 YE 2015 YE 2016 YE 2017 YE 2018 WI…
  24. Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    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…
  25. Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    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…
  26. Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets The New Cardium Play High Grade Land Base PEYTO Exploration & Development Corp. 27 11/7/2018
  27. Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    Peytos Assets The New Cardium Play Abundant Opportunities PEYTO Exploration & Development Corp. Oldman & Oldman North 02-21 04-10 14-07 Nosehill Wildhay 13-02 16-34 02-27 Swanson Galloway 03-17 01-17 02-17 Total…
  28. Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets The New Cardium Play A Double PEYTO Exploration & Development Corp. Old Cardium Hz Well Design (avg 8 stages) Average of 18 EUR 2.75 BCFe wells completed with new IP30 1.8 mmcf/d raw gas slickwater design C5 25…
  29. Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    Peytos Assets The New Cardium Play A Different Design PEYTO Exploration & Development Corp. 2009-2014 2009-2014 Old Design (2009-2014) New Design (2017-2018) Old Design (last 12 wells) New Design (last 12 wells) 8 Stages…
  30. Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Assets Deep Basin Cardium More Like Oil Than Gas PEYTO Exploration & Development Corp. Reserves Revenue Type Curve by Product by Product IP 365 58 bbl/d 13% C5+/Condy 37 10% 55% bbl/d C3/C4 1.5 mmcf/d Natural 16% Gas…
  31. Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 32 11/7/2018
  32. Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Returns 2018 IRRs YTD PEYTO Exploration & Development Corp. 2018 Wells YTD Prices Based on Actuals and 150 Price Deck: 2018 Actuals and Nov 1 Strip Forecast Nov 1 Strip Period Gas C5+ 130 Well Count Price Price (/GJ)…
  33. 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. Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Future PEYTO Exploration & Development Corp. 35 11/7/2018
  35. Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Future 2019 Outlook PEYTO Exploration & Development Corp. Drill 75-90Hz Wells (Liquids Rich Natural Gas) vs 65-70 in 2018 Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base…
  36. Corporate Presentation – Peyto Exploration & Development Corp – slide 36
    Peytos Future Gas Price Stability Before Returning to Growth PEYTO Exploration & Development Corp. 5 14 bbl/mmcf 14 bbl/mmcf 17 bbl/mmcf 20 bbl/mmcf 26 bbl/mmcf 31 bbl/mmcf 35 bbl/mmcf, exit 18,000 bbl/d 4.19 4 100,000…
  37. Corporate Presentation – Peyto Exploration & Development Corp – slide 37
    Peytos Future Lower Costs and Increase Liquids to Preserve Profit PEYTO Exploration & Development Corp. 4050 bbl/mmcf new adds in 2018/19 increases liq to 14% PEY 2017 PEY 2018 Goals PEY 2019 Goals 91% Gas 2.30/GJ 90% Gas…
  38. 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 2020 Forecast 2017 200-250MM 250-300MM 250-300MM Capex 521MM 5 100,000 Increasing liquids…
  39. Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Gas Marketing Minimized AECO Spot Market Exposure PEYTO Exploration & Development Corp. 2018 Budget Revenue 2019 Forecast Revenue Condy & C5+ - Gas - AECO spot Fixed Condy & C5+ - (monthly/daily) 4% Fixed 5% 8% Gas - Henry…
  40. Corporate Presentation – Peyto Exploration & Development Corp – slide 40
    Gas Marketing Alberta Supply/Demand Almost Balanced PEYTO Exploration & Development Corp. When supply When supply exceeds demand exceeds demand and there is no and there is NGTL gas flows access to storage, access to storage,…
  41. Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Gas Marketing Fixed Price Swaps For Gas and Liquids PEYTO Exploration & Development Corp. Peyto Marketing Summary AECO 7A Fixed Price Swaps (CDN) Total Total Total Total Total 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 2018 Q1 2018 Q2…
  42. Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Gas Marketing The Good News, Pipe Is Coming PEYTO Exploration & Development Corp. 43 Source: TCPL 2017 Q4 Conference Call Presentation Feb 15, 2018 11/7/2018
  43. Corporate Presentation – Peyto Exploration & Development Corp – slide 43
    Gas Marketing Supply Driven Market May Be Temporary PEYTO Exploration & Development Corp. NORTH AMERICAN NATURAL GAS 20 92.1 100 18 79.4 90 Proven Reserve Life (years) Total Production (bcf/d) 16 80 13.7 14 11.4 70 12…
  44. Corporate Presentation – Peyto Exploration & Development Corp – slide 44
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Gas Marketing N Leverage 45 11/7/2018
  45. Corporate Presentation – Peyto Exploration & Development Corp – slide 45
    Quarterly Track Record PEYTO Exploration & Development Corp. 2018 2017 2016 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Operations Production Oil & NGLs (bbl/d) 9,209 9,243 10,043 9,337 10,479 8,958 8,319 9,586 7,457 8,938…
  46. Corporate Presentation – Peyto Exploration & Development Corp – slide 46
    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…
  47. Corporate Presentation – Peyto Exploration & Development Corp – slide 47
    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…
  48. Corporate Presentation – Peyto Exploration & Development Corp – slide 48
    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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