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October 2019 Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Oct 1, 2019 · 54 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. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 2
    PEY.TO 20th 1998-2019 Who We Are N Pure Play Alberta Deep Basin 400 mmcf/d Gas, 11,000 boe/d NGLs N Returns Focused Strategy Avg ROCE 16%, ROE 29% over last 20 yrs, among highest in industry R10 R5W6 R27 N Long Reserve…
  3. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 3
    PEY.TO 20th 1998-2019 Growth Per Share Production/share Reserves/share FFO/share 2P NPV5/debt adj. (MMcfe/d/mm sh) (2P Bcfe/mm sh) (/sh) share (/sh) 1363 29.2 4.33 1289 1222 40 40 26.3 38 1179 36 38 38 37 1087 24.2 3.59 35…
  4. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    PEY.TO 20th 1998-2019 Total Shareholder Return Model Future Prospects Past Profits 5 BOE factor - 6 mcf = 1 bbl of oil equivalent 10/1/2019
  5. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    The Big Picture 20th 1998-2019 They Want More Energy We Wont Change That 6 Source: BP Energy Outlook 2019 10/1/2019
  6. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 6
    The Big Picture 20th 1998-2019 The World Needs More Canadian Energy Environmental Regulations Worker Safety Russia Saudi Iran Iraq Human Rights Ethical Standards Gender Equality Indigenous Consultation…
  7. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    The Big Picture 20th 1998-2019 Peyto Does It Better Emission Intensity by Source Type for Canadian Oil and Gas (1990, 2005, 2016) 140 140 Emmission Intensity per Barrel (kg CO2eq/bbl) 121.4 120 105.4 120 100 88.4 90.1…
  8. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 8
    The Big Picture 20th 1998-2019 Continuously Improving Environmental Performance Peyto GHG Emissions Intensity tCO2eq/boe (direct and indirect) 0.029 0.026 0.025 0.024 0.022 0.021 in GHG Emissions Intensity 2013 2014 2015…
  9. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    The Big Picture 20th 1998-2019 So What Does All This Mean Canada has energy abundance. Canada has a moral obligation to provide the rest of the world with our clean, responsibly developed energy to improve lives and preserve…
  10. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 10
    The Peyto Strategy PEYTO Exploration & Development Corp. 11 10/1/2019
  11. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    Peytos Strategy 20th 1998-2019 What We Continue To Believe N Natures gas is the fuel for the future. N Our gas and NGLs have some of the lowest emissions of any hydrocarbons produced in Canada. N Our business focus is to…
  12. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Strategy 20th 1998-2019 Changing Gas Market Requires Changing Strategy US Natural Gas (EIA) Canadian Natural Gas (EIA) 80 110 83.4 70 100 90 60 82.1 80 50 70 40 60 In 2018, the US grew consumption 30 faster than…
  13. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    Peytos Strategy 20th 1998-2019 Integrate the Entire Oil & Gas Value Chain 14 10/1/2019
  14. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    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…
  15. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Strategy 20th 1998-2019 Alberta Egress Challenge New Alberta government has made solving AECO market disconnection a priority New Ministry of Natural Gas was created to address this issue Associate Minister Dale…
  16. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Strategy 20th 1998-2019 Canadian Gas Egress Is Expanding Dry Natural Gas Production - Canada 25 (EIA) 9 LNG Export 8 2.0 Bcf/d 21 7 LNG Canada 20 6 NGTL Expansion 5+40% BCF/D 19 4 15 3 2 1 3.2 Bcf/d…
  17. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 700 600 500 Peyto Earnings 400 CTD Q2/19 300 200 100 - 2016 2017 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  18. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 18
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & Development Corp. 3,000 2,500 2,000 Peyto Ctd. Earnings (MM) 1,500 Q2/19 1,000 500 0 2006 1999 2000 2001 2002 2003 2004 2005 2007 2008…
  19. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 19
    Peytos Profitable Business PEYTO Exploration & Development Corp. 20 10/1/2019
  20. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 20
    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)…
  21. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 21
    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% 2…
  22. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    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…
  23. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 23
    Peytos Profitable Business Results in a Low Cost Advantage PEYTO Exploration & Development Corp. 2.92 5.02 (0.25) 1.40 BOE factor - 6 mcf = 1 bbl of oil equivalent 24 Data from Peters & Co. 10/1/2019 Gas producers…
  24. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    Peytos Unique Assets PEYTO Exploration & Development Corp.
  25. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    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…
  26. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets Deep Basin Permeability Segregation PEYTO Exploration & Development Corp. FOOTHILLS STRUCTURES GAS AS ING INCRE BILITY EA PERM WATER TRANSITION ZONE WATER GAS ASE INCRE AREA OF GAS DEPTH…
  27. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    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* 28 *NGL…
  28. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets 20th1998-2019 Large Hz MSF Inventory 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 2(2) 18 90 176 165(2)…
  29. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    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 - R10 R5W6 R27 R22 R17 R12 R7 T65 Net…
  30. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Assets 20th 1998-2019 The New Cardium Play Abundant Opportunities Oldman & Oldman North Nosehill Wildhay Swanson Galloway 31 10/1/2019
  31. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Assets 20th 1998-2019 Facility Ownership And Control Cutbank Kakwa Oldman (with Deep Cut) & Oldman North Nosehill Wildhay Galloway Swanson Peyto Gas Plants YE 2014 YE 2015 YE 2016 YE 2017 YE 2018 WI…
  32. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Assets 20th 1998-2019 Big Sunny Natural Gas Storage Scheme R.25 R.24 R.23 R.22 R.21 R.20 R.19 R.18 Nosehill Creek North Meter Station 139 mmcfd Capacity T.56 T.56 Obed North Oldman Meter Station 227 mmcfd Capacity…
  33. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 33
    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…
  34. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Assets 20th 1998-2019 The New Cardium Play Proving the Type Curve 35 10/1/2019
  35. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Assets 20th1998-2019 The New Cardium Play Improving Execution 2018 2019 36 10/1/2019
  36. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 36
    Peytos Assets 20th 1998-2019 New Montney Play and Potential Expiries Potential Montney Intermediate Term Expiries 2019-2020 37 10/1/2019
  37. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 37
    Peytos Assets 20th 1998-2019 What Shareholders Currently Own Tangible Infrastructure (Replacement Value as at Dec 31, 2018) 80 Compressors (3.25MM each) 259 MM 17 Inlets (1.8MM each) 31 MM 20 Refrigeration plants (5.4MM each)…
  38. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 38
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 39 10/1/2019
  39. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Peytos Assets 20th 1998-2019 2018 Post Mortem Returns Analysis Cardium completion attempts with cased hole and cemented systems 40 Full cycle IRR is determined using actual capital spent on each well, including a 365k provision…
  40. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 40
    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…
  41. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Peytos Future PEYTO Exploration & Development Corp.
  42. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Peytos Future 20th1998-2019 2019 Outlook Drill 50Hz Wells (Liquids Rich Natural Gas) vs 70 in 2018 Market 3rd Party Capacity Offer Excess Capacity to Other Operators Increase Opportunities Undeveloped Land Base Diversify…
  43. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 43
    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 Lean gas 4.19…
  44. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 44
    Peytos Future 20th 1998-2019 Liquids Growth Periods where Oldman Deep Cut shut in Liquids growing faster than gas in the short term 45 10/1/2019
  45. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 45
    Peytos Future Lower Costs and Increase Liquids to Preserve Profit PEYTO Exploration & Development Corp. 40-50 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…
  46. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 46
    Gas Marketing 20th 1998-2019 Future Market Diversification and Gas Price Protection Q2 2019 Sales Gas 485,000 GJ/d* *Average Heating Value of approximately 1.15 GJ/mcf for Peytos gas 47 For a real time summary of Peytos…
  47. October 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. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 48
    Gas Marketing 20th 1998-2019 Minimized AECO Spot Market Exposure 31% Liquids 38% Revenue Liquids Revenue 49 * 2019 and beyond provided for illustration only. Budgets and forecasts beyond 2019 have not been finalized and are…
  49. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 49
    Gas Marketing 20th 1998-2019 LNG Consortium and Export Potential 50 10/1/2019
  50. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 50
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Leverage N Reserves Growth 51 10/1/2019
  51. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 51
    Quarterly Track Record PEYTO Exploration & Development Corp. 2019 2018 2017 2016 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Operations Production Oil & NGLs (bbl/d) 11,110 10,703 9,692 10,273 9,209 9,243 10,043 9,337…
  52. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 52
    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 - 2000 2013 1999 2001 2002 2003 2004 2005…
  53. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 53
    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…
  54. October 2019 Corporate Presentation – Peyto Exploration & Development Corp – slide 54
    Peytos Assets 20th 1998-2019 Reserves Growth 7,000 6,000 5,000 17% CAGR 4,000 3,000 2,000 1,000 TCFe of Discovered Reserves 0 Probable Additional Proved Undeveloped Proved Developed Producing Cum Production…

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