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January 2020 Investor Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Jan 13, 2020 · 55 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. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 1
  2. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 2
    PEY.TO Who We Are PEYTO Exploration & DevelopmentCorp. N Pure Play Alberta Deep Basin 410 mmcf/d Gas, 13,000 boe/d NGLs N Returns Focused Strategy Avg ROCE 16%, ROE 29% over last 20 yrs, among highest in industry N Long Reserve…
  3. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 3
    PEY.TO 20th 19982018 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 3837 1087 24.2 3.59 35…
  4. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 4
    PEY.TO 20th 19982018 Total Shareholder Return Model Future Future Prospects Past Past Profits 5 BOE factor - 6 mcf = 1 bbl of oil equivalent 1/11/2020
  5. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 5
    The Big Picture 20th 19982018 They Want More Energy We Wont Change That 6 Source: BP Energy Outlook 2019 1/11/2020
  6. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 6
    The Big Picture 20th 19982018 The World Needs More Canadian Energy Environmental Regulations Worker Safety Russia Saudi Iran Iraq Human Rights Ethical Standards Gender Equality Indigenous Consultation…
  7. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 7
    The Big Picture 20th 19982018 Peyto Does It Better Emission Intensity by Source Type for Canadian Oil and Gas (1990, 2005, 2016) 140 140 121.4 Emission Intensity per Barrel (kg CO2eq/bbl) 120 105.4 120 100 88.4 90.1 100…
  8. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 8
    The Big Picture 20th 19982018 Continuously Improving Environmental Performance Peyto GHG Emissions Intensity 0.029 tCO2eq/boe (direct and indirect) 0.026 0.025 0.024 0.022 0.021 in GHG Emissions Intensity 2013 2014 2015…
  9. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 9
    The Big Picture 20th 19982018 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 the…
  10. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 10
    The Peyto Strategy PEYTO Exploration & DevelopmentCorp. 11 1/11/2020
  11. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 11
    Peytos Strategy 20th 19982018 What We Continue To Believe N Naturesgasithefuelforthefuture. N OurgasandNGLshavesomeofthelowestemssonsofi anyhydocabonspoducedinrrCanada. N…
  12. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 12
    Peytos Strategy 20th 19982018 Changing Gas Market Requires Changing Strategy US Natural Gas (EIA) Canadian Natural Gas (EIA) 80 11 0 83.4 70 10 60 82.1 0 80 50 90 70 40 60 In 2018, the US30 grew consumption faster than ever…
  13. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 13
    Peytos Strategy 20th 19982018 Integrate the Entire Oil & Gas Value Chain 14 1/11/2020
  14. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 14
    Peytos Strategy Fast Becoming an Integrated Energy Business PEYTO Exploration & DevelopmentCorp. Exploration and Development Production and Processing Storage and Marketing Midstream and Power Generation 647 Lands Purchased (YE…
  15. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Strategy 20th 19982018 Alberta Egress Challenge Do we revert back to a 0.20 difference off New Alberta NYMEX government has made solving AECO market disconnection a priority New Ministry of Natural Gas was created to…
  16. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Strategy 20th 19982018 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 NGTL…
  17. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 17
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & DevelopmentCorp. 800 700 600 500 Peyto Earnings 400 CTD Q3/19 300 200 100 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  18. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 18
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & DevelopmentCorp. 3,000 2,500 2,000 Peyto Ctd. Earnings (MM) 1,500 Q3/19 1,000 500 0 Q4 1999 Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4…
  19. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 19
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & DevelopmentCorp. 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) (1.18)…
  20. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 20
    Peytos Profitable Business The Price Bar Is Now Very Low, We Must Go Lower PEYTO Exploration & DevelopmentCorp. AECO 10 Monthly /GJ Peyto Realized Gas Price (/mcfe) 8 36% Avg. 6 Profit CTD Bonus 4 PDP FD&A 35% 2…
  21. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 21
    Peytos Profitable Business Competitive In The North American Marketplace PEYTO Exploration & DevelopmentCorp. 100% Montney 60% DB/40% Mont. 100% Deep 100% 10% DB/90% Mont. VII 2018* TOU 2018* Basin PEY 2018 Montney A ARX 2017* AV…
  22. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 22
    Peytos Profitable Business Results in a Low-Cost Advantage PEYTO Exploration & DevelopmentCorp. 2.92 4.47 (0.34) 0.88 BOE factor - 6 mcf = 1 bbl of oil equivalent 24 Data from Peters & Co. 1/11/2020 Gas producers…
  23. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 23
    Peytos Unique Assets PEYTO Exploration & DevelopmentCorp.
  24. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 24
    Peytos Assets Geographically Focused Core Areas PEYTO Exploration & DevelopmentCorp. 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…
  25. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 25
    Peytos Assets PEYTO Deep Basin Permeability Segregation Exploration & DevelopmentCorp. FOOTHILLS STRUCTURES GAS WATER TRANSITION ZONE WATER GAS AREA OFGAS MATURATION 27 1/11/2020
  26. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets Multi Zone Stacked Sandstone Reservoirs PEYTO Exploration & DevelopmentCorp. Detailed Petrophysical work on the Spirit River sands revealed 30% more reserves per section Up to per section* 28 *NGL…
  27. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 27
    Peytos Assets 20th 19982018 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…
  28. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets Type Well Economics Work Well at 2/GJ PEYTO Exploration & DevelopmentC orp. T y p e W e l l E c o n om i c s ( C N D 2 . 0 0 / G J A E C O , C N D 7 0 / b b l W T I ) D/C/E/T IP 3 m o EUR Capital BT IRR% mcfe/d Bcfe…
  29. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 29
    Peytos Assets Deep Basin Lands Go A Long Way PEYTO Exploration & DevelopmentCorp. 800 Peyto Lands 700 600 Net Sections 500 400 Net Peyto Sections 300 200 100 - Net Sections of Cardium, Dunvegan, Notikewin,…
  30. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 30
    Peytos Assets 20th 19982018 The New Cardium Play Abundant Opportunities Oldman & Oldman North Nosehill Wildhay Swanson Galloway 32 1/11/2020
  31. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 31
    Peytos Assets 20th 19982018 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. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Assets 20th 19982018 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. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 33
    Peytos Assets Unique Infrastructure Location PEYTO Exploration & DevelopmentCorp. Alliance Oldman & Oldman North Nosehill Wildhay Galloway Swanson 240 kV Power Lines Highway 16 Greater Sundance Area Bickerdike…
  34. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Assets 20th 19982018 The New Cardium Play Proving the Type Curve 36 1/11/2020
  35. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Assets 20th19982018 The New Cardium Play Improving Execution 2018 2019 37 1/11/2020
  36. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 36
    Peytos Assets 20th 19982018 H1 2019 Postmortem Returns Analysis Peyto H1 2019 Cardium Program IRR CN 2.00/GJ + US 55/bbl 180% 160% 140% 120% 100% BT IRR % 80% 60% 40% 80% is less than 1 year payout 20% 0% -20%…
  37. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 37
    Peytos Assets 20th 19982018 New Montney Play and Potential Expiries Potential Montney Intermediate Term Expiries 2019-2020 39 1/11/2020
  38. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 38
    Peytos Assets 20th 19982018 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) 108…
  39. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 39
    Peytos Incredible Returns PEYTO Exploration & DevelopmentCorp. 41 1/11/2020
  40. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 40
    Peytos Assets 20th 19982018 2018 Postmortem Returns Analysis Cardium completion attempts with cased hole and cemented systems 42 Full cycle IRR is determined using actual capital spent on each well, including a 365k provision…
  41. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 41
    Peytos Returns High Returns On Your Capital And Equity PEYTO Exploration & DevelopmentCorp. 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 (%)…
  42. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 42
    Peytos Future PEYTO Exploration & DevelopmentCorp.
  43. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 43
    Peytos Future 20th 19982018 2020 Outlook Drill 80Hz Wells (Liquids Rich Natural Gas) vs 50 in 2019 Market 3rd Party Capacity Offer Excess Capacity to Other Operators Increase Opportunities Undeveloped Land Base Diversify…
  44. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 44
    Peytos Future Gas Price Stability Before Returning to Growth PEYTO Exploration & DevelopmentCorp. 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 deferral…
  45. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 45
    Peytos Future Lower Costs and Increase Liquids to Preserve Profit PEYTO Exploration & DevelopmentCorp. 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…
  46. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 46
    Gas Marketing 20th 19982018 Future Market Diversification and Gas Price Protection Q3 2019 Sales Gas 456,000 GJ/d* 48 *Average Heating Value of approximately 1.15 GJ/mcf for Peytos gas 1/11/2020
  47. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 47
    Gas Marketing Successful Hedging Strategy Smoothes Volatility PEYTO Exploration & DevelopmentCorp. Gas Price (/mcf) 12.00 12.00 PeytohasbeatheAECOmonthlypricein11ofthelast13yearsusinga 10.00 methodicalhedgingstrategy. 10.00…
  48. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 48
    Gas Marketing 20th 19982018 Balanced Revenue Stream Peyto Revenue Breakdown 300,000 60% 250,000 50% 200,000 40% 150,000 30% 100,000 20% 50,000 10% 0 0% Q4 2019F Q2 2020F Q2 2019 Q4 2009 Q2 2010 Q4 2010 Q2…
  49. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 49
    Gas Marketing Fixed Price Swaps For Gas and Liquids PEYTO Exploration & DevelopmentCorp. Peyto MarketingSummary AECO 7A Fixed Price Swaps (CAD/GJ) TOTAL TOTAL TOTAL TOTAL TOTAL Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1…
  50. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 50
    Gas Marketing 20th 19982018 LNG Consortium and Export Potential 52 1/11/2020
  51. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 51
    Appendix PEYTO Exploration & DevelopmentCorp. N Quarterly Track Record N Tax Pools N Leverage N Reserves Growth 53 1/11/2020
  52. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 52
    Quarterly Track Record PEYTO Exploration & DevelopmentCorp. 2019 2018 2017 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Operations Production Oil & NGLs(bbl/d) 10,650 11,110 10,703 9,692 10,273 9,209 9,243 10,043 9,337…
  53. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 53
    Organic Business Model Peytos Tax Pools PEYTO Exploration & DevelopmentCorp. 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…
  54. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 54
    Peytos Debt Careful Use Of Debt For Leveraged Returns PEYTO Exploration & DevelopmentCorp. Peyto Net Debt/PDP NPV10 100% 80% PeytobecomesNAIC2rated,gainsaccessto cheapertermdebt 60% 40% 20% Debt/PDP NPV10 0% 2001…
  55. January 2020 Investor Presentation – Peyto Exploration & Development Corp – slide 55
    Peytos Assets 20th 19982018 Reserves Growth 7,000 6,000 5,000 17% CAGR 4,000 3,000 1644 2,000 TCFe of 1,000 1,682 Discovered Reserves 0 Probable Additional Proved Undeveloped Proved Developed Producing Cum…

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