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April 2019 Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Apr 15, 2019 · 48 slides

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Slides

  1. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. April 2019 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 85,00090,000 boe/d Gas & NGLs N Returns Focused Strategy Avg ROCE 16%, ROE 29% over last 20 yrs,…
  3. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 3
    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) CTD Dividend (/share) 50 100,000 Peyto…
  4. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    The Peyto Strategy PEYTO Exploration & Development Corp. 5 4/15/2019
  5. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    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…
  6. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 6
    Peytos Strategy Fast Becoming an Integrated Energy Business PEYTO Exploration & Development Corp. Exploration and Development Production and Processing Storage and Marketing Midstream and Power Generation 647 Lands Purchased (YE…
  7. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    Peytos Strategy Long Term Natural Gas Runway PEYTO Exploration & Development Corp. Dry Natural Gas Production - Canada (EIA) 9 24,000 LNG Export 2.0 Bcf/d 8 22,000 7 LNG Canada 20,000 6 NGTL Expansion 5 +32% BCF/D…
  8. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 8
    The Peyto Strategy 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 10 yrs) Q2 2001 Q1 2002 Q4 2002 Q3 2003 Q2…
  9. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 700 600 500 Peyto Earnings 400 CTD Q4/18 300 200 100 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  10. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 10
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & Development Corp. 3,000 2,500 2,000 Peyto Ctd. Earnings (MM) 1,500 Q4/18 1,000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  11. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    Peytos Profitable Business PEYTO Exploration & Development Corp. 12 4/15/2019
  12. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & Development Corp. 2018 PEY 2014 PEY 2015 PEY 2016 PEY 2017 PEY 2018 Land/Acq/Disp Seismic Drilling PDP FD&A /mcfe (2.25) (1.64) (1.44) (1.36)…
  13. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    Peytos Profitable Business The Price Bar Is Now Very Low, We Must Go Lower PEYTO Exploration & Development Corp. AECO 10 Monthly /GJ Peyto Realized Gas Price (/mcfe) 8 36% Avg. 6 Profit CTD Bonus 4 PDP FD&A 35%…
  14. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    Peytos Profitable Business Competitive In The North American Marketplace PEYTO Exploration & Development Corp. 100% Montney 60% DB/40% Mont. 100% Deep 100% Montney 10% DB/90% Mont. VII 2018* TOU 2018* Basin PEY 2018 AAV 2018* ARX…
  15. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Profitable Business Results in a Low Cost Advantage PEYTO Exploration & Development Corp. 2.41 4.84 (0.10) 1.15 BOE factor - 6 mcf = 1 bbl of oil equivalent 16 Data from Peters & Co. 4/15/2019 Gas producers…
  16. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Unique Assets PEYTO Exploration & Development Corp.
  17. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    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…
  18. April 2019 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. April 2019 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. April 2019 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) 2 440 113 363(12) 384 5 1 5 7 1…
  21. April 2019 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. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    Peytos Assets Facility Ownership And Control PEYTO Exploration & Development Corp. Cutbank Kakwa Oldman (with Deep Cut) & Oldman North Nosehill Wildhay Galloway Swanson Peyto Gas Plants YE 2014 YE 2015 YE 2016 YE…
  23. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 23
    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…
  24. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    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…
  25. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    Peytos Assets The New Cardium Play High Grade Land Base PEYTO Exploration & Development Corp. 26 4/15/2019
  26. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets The New Cardium Play Abundant Opportunities PEYTO Exploration & Development Corp. Oldman & Oldman North Nosehill Wildhay Swanson Galloway Total Greater Sundance Cardium Resource* Proven Resource: 392…
  27. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    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…
  28. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets The New Cardium Play Proving the Type Curve PEYTO Exploration & Development Corp. 29 Dec 14, 2018 Commodity strip: WTI US 52/bbl flat, AECO Gas 1.24, 1.37, 1.53, 1.67, 1.89/GJ 4/15/2019
  29. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    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…
  30. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Assets Cardium Condensate Yields Improving PEYTO Exploration & Development Corp. 42 bbl/mmcf C5+ 32 bbl/mmcf C5+ 31 4/15/2019
  31. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Assets New Montney Play and Potential Expiries PEYTO Exploration & Development Corp. Potential Montney Intermediate Term Expiries 2019-2020 32 4/15/2019
  32. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 33 4/15/2019
  33. April 2019 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 20 yr Avg ROE to 2018 30% 6 20% 4 10% 2 0% 0 Return On Capital Employed (%) Return On Equity…
  34. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Future PEYTO Exploration & Development Corp.
  35. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Future 2019 Outlook PEYTO Exploration & Development Corp. Drill 50Hz Wells (Liquids Rich Natural Gas) vs 70 in 2018 Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base Shoot…
  36. April 2019 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 27 bbl/mmcf 32 bbl/mmcf 36 bbl/mmcf, exit 18,000 bbl/d Temporary liquids…
  37. April 2019 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 PEY 2019 Goals 91% Gas 2.30/GJ 89% Gas…
  38. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 38
    Gas Marketing Future Market Diversification and Gas Price Protection PEYTO Exploration & Development Corp. 88% Hedged 75% Hedged 18% Hedged 2% Hedged Markets Markets Markets Markets 99% AECO 67% AECO 45% AECO 48% AECO 1% Dawn…
  39. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Gas Marketing Minimized AECO Spot Market Exposure PEYTO Exploration & Development Corp. 2018 Actuals 2019 Forecast Revenue Condy & C5+ - Gas - AECO spot Gas - AECO spot Fixed (monthly/daily) (monthly/daily) 4% 5% 6% Gas -…
  40. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 40
    Gas Marketing Alberta Needs Storage, Supply/Delivery Balancing 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…
  41. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Gas Marketing Fixed Price Swaps For Gas and Liquids PEYTO Exploration & Development Corp. 42 For a real time summary of Peytos future hedges see: http://www.peyto.com/Files/Marketing/hedges.pdf 4/15/2019 Assumes an Average…
  42. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Gas Marketing The Good News, Pipe Is Coming PEYTO Exploration & Development Corp. 43 Source: TCPL 2018 Investor Day 4/15/2019
  43. April 2019 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. April 2019 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 4/15/2019
  45. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 45
    Quarterly Track Record PEYTO Exploration & Development Corp. 2018 2017 2016 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Operations Production Oil & NGLs (bbl/d) 9,692 10,273 9,209 9,243 10,043 9,337 10,479 8,958 8,319 9,586…
  46. April 2019 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 Q4/18 600 400 200 - 1999 2000 2001 2002 2003 2004 2005 2006 2007…
  47. April 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 47
    Gas Marketing Successful Hedging Strategy Smoothes Volatility PEYTO Exploration & Development Corp. Gas Price (/mcf) 12.00 12.00 Peyto has beat the AECO 10.00 monthly price in 11 of the 10.00 last 13 years using a 8.00 methodical…
  48. April 2019 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 60% cheaper term debt 40% 20% Debt/PDP…

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