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Corporate Presentation November 2020 – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Nov 18, 2020 · 57 slides

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Slides

  1. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 1
  2. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 2
    PEY.TO Who We Are PEYTO Exploration & Development Corp. N Pure Play Alberta Deep Basin - 420 mmcf/d Gas, 11,500 bbl/d NGLs N Returns Focused Strategy - Avg ROCE 15%, ROE 28% over last 21 yrs, among highest in the industry N…
  3. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 3
    PEY.TO COVID19 Preparedness PEYTO Exploration & Development Corp. 1. Office Preparations All staff set up with remote desktop working capabilities (multiple communication tools: email, text, phone, conference, Webex, etc) Small,…
  4. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 4
    PEY.TO 20 Year Growth Per Share PEYTO Exploration & Development Corp. Production/share Reserves/share FFO/share 2P (NPV5-debt)/share (/sh) (MMcfe/d/mm sh) (2P Bcfe/mm sh) (/sh) 1363 29.229.6 4.33 1289 4040 38 1222 26.3 36…
  5. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 5
    PEY.TO Total Shareholder Return Model PEYTO Exploration & Development Corp. Future Prospects Past Profits 6 BOE factor - 6 mcf = 1 bbl of oil equivalent 11/18/2020
  6. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 6
    The Big Picture They Want More Energy We Wont Change That PEYTO Exploration & Development Corp. 7 Source: BP Energy Outlook 2019 11/18/2020
  7. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 7
    The Big Picture The World Needs More Canadian Energy PEYTO Exploration & Development Corp. Environmental Regulations Worker Safety Russia Saudi Iran Iraq Human Rights Ethical Standards Gender Equality Indigenous…
  8. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 8
    The Big Picture Continuously Improving Peyto Leading the Way PEYTO Exploration & Development Corp. Emission Intensity by Source Type for Canadian Oil and Gas (1990, 2005, 2016) 140 140 121.4 Emmission Intensity per Barrel…
  9. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 9
    The Big Picture Continuously Improving Environmental Performance PEYTO Exploration & Development Corp. Peyto GHG Emissions Intensity KgCO2eq/boe (direct and 29.0 26.0 24.7 23.9 22.3 21.1 20.9 indirect) in GHG Emissions…
  10. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 10
    The Big Picture So What Does All This Mean PEYTO Exploration & Development Corp. Canada has energy abundance. Canada has a moral obligation to provide the rest of the world with our clean, responsibly developed energy to…
  11. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 11
    The Peyto Strategy PEYTO Exploration & Development Corp. 12 11/18/2020
  12. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 12
    Peytos Strategy What We Continue To Believe PEYTO Exploration & Development Corp. 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…
  13. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 13
    Peytos Strategy Growing North American Gas Market PEYTO Exploration & Development Corp. North America Gas Consumption (BCF/d) (BP Statistical Review of World Energy 2019) 140 140 120 120 100 100 32% growth 80 2008-2018 80…
  14. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 14
    Peytos Strategy Canadian Gas Egress Is Expanding PEYTO Exploration & Development Corp. 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…
  15. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 15
    The Peyto Strategy Fund Growth From Cashflow PEYTO Exploration & Development Corp. 7,000 6,258 120,000 6,000 100,000 5,000 6,165 80,000 Peyto FFO 4,000 60,000 CTD Q4/19 3,000 40,000 2,000 1,000 20,000 0 1999 - 2000…
  16. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 16
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 700 600 500 Peyto Capital 400 CTD Q4/19 300 200 100 - 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 CAPEX (MM) Earnings…
  17. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 17
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & Development Corp. 3,000 2,500 2,000 Peyto Ctd. Earnings (MM) 1,500 Q4/19 1,000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  18. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 18
    The Peyto Strategy 21 Year Cycle of Value Creation PEYTO Exploration & Development Corp. 6.2B Capital Investment 55% retained FFO YE 2019 27% equity 18% debt 2P NPV5 2.59B 8.5B Value Earnings 6.818B 2.45B in div/dist 0.38B to…
  19. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 19
    Peytos Profitable Business PEYTO Exploration & Development Corp. 20 11/18/2020
  20. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 20
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & Development Corp. 2019 PEY 2014 PEY 2015 PEY 2016 PEY 2017 PEY 2018 PEY 2019 Land/Acq/Disp Seismic Drilling PDP FD&A /mcfe (2.25) (1.64) (1.44)…
  21. Corporate Presentation November 2020 – 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 35% Avg. 6 Profit CTD Bonus 4 PDP FD&A 10%…
  22. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 22
    Peytos Profitable Business Peytos Moat is a Low-Cost Advantage PEYTO Exploration & Development Corp. 2.98 4.54 (0.14) 1.02 23 BOE factor - 6 mcf = 1 bbl of oil equivalent Data from Peters & Co. 11/18/2020 Gas…
  23. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 23
    Peytos Profitable Business High Operating Margins PEYTO Exploration & Development Corp. 90% 9.00 80% 8.00 70% 7.00 60% 6.00 50% 5.00 40% 4.00 30% 3.00 20% 2.00 10% 1.00 Peyto Operating Margin 0% 0.00 20 Year Avg.…
  24. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 24
    Peytos Unique Assets PEYTO Exploration & Development Corp.
  25. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 25
    Peytos Assets Geographically Focused Core Areas PEYTO Exploration & Development Corp. 563,500 net acres 9 operated gas plants Cutbank ---(845 mmcf/d net capacity) 2,000+ km pipelines 1,250+ producing zones Kakwa 80,000 boe/d…
  26. Corporate Presentation November 2020 – 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 SE INCREAH AREA OF GAS DEPT…
  27. Corporate Presentation November 2020 – 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. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 28
    Peytos Assets 1 Horizontal Deep Basin Driller PEYTO Exploration & Development Corp. Alberta Deep Basin Hz Spuds 1,200 Peyto spud its 1,000th Hz well on Sept. 25, 2020 1,000 800 600 400 200 Peyto Deep Basin 0 Horizontal…
  29. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 29
    Peytos Assets Continuous Cost Improvement PEYTO Exploration & Development Corp. Average well costs since 2018 have fallen 20% Cost Reduction (Q1/2018 TO Q3/2020) 30 11/18/2020
  30. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 30
    Peytos Assets Large Hz MSF Inventory PEYTO Exploration & Development Corp. Done1 To Do Total Total Total Total Hz(Vt) Hz Locations Vertical Hz Locations Unbooked3 Wells Wells Booked2 (2) 2 440 163 430(12) 419 5 1 2 4 1…
  31. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 31
    Peytos Assets Deep Basin Lands Go A Long Way PEYTO Exploration & Development Corp. 1,000 Peyto Lands 900 800 700 Net Sections 600 500 Net Peyto Sections 400 300 200 100 - Net Sections of Cardium, Dunvegan,…
  32. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 32
    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…
  33. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 33
    Peytos Assets Valuable Midstream Processing Capacity PEYTO Exploration & Development Corp. Peyto Processing Capacity is currently limited to 715 MMCF/d* 700,000 2P Reserves 815 MMBoes Go Forward Processing Capacity Forecast…
  34. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 34
    Peytos Assets Big Sunny Natural Gas Storage Scheme PEYTO Exploration & Development Corp. 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…
  35. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 35
    Peytos Assets Unique Infrastructure Location PEYTO Exploration & Development Corp. Alliance Oldman & Oldman North Nosehill Wildhay Big Sunny Galloway Swanson 240 kV Power Lines Highway 16 Cascade Power Project…
  36. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 36
    Peytos Assets First 2 Cardium Hzs Have Reached Terminal Decline PEYTO Exploration & Development Corp. 6 Years There is nothing sexy about a 200 mcf/d gas well, except when it doesnt decline. Then it becomes an incredible…
  37. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 37
    Peytos Assets Long Reserve Life Asset PEYTO Exploration & Development Corp. RESERVE LIFE INDEX 30 YEARS AT Q4 PRODUCTION 25 28.8 20 15 18.7 10 Years PDP 5 9.4 0 2001 2002 2003 2004 2005 2006 2007 2008…
  38. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 38
    Peytos Assets Organic Reserves Growth PEYTO Exploration & Development Corp. 8,000 7,000 6,000 5,000 17% CAGR 4,000 3,000 1,600 2,000 1,000 1,859 TCFe of Discovered Reserves 0 Cum Production BCFE Proved Developed…
  39. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 39
    Peytos Assets What Shareholders Currently Own PEYTO Exploration & Development Corp. Tangible Infrastructure (Replacement Value as at Dec 31, 2019) 80 Compressors (3.25MM each) 259 MM 17 Inlets (1.8MM each) 31 MM 20 Refrigeration…
  40. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 40
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 41 11/18/2020
  41. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 41
    Peytos Returns Updated Template Economics At Strip PEYTO Exploration & Development Corp. Gross IP3 Gross EUR Gross DCET Half Cycle Type Entity (boe/d) (mboe) % Liquids (M) IRR (%) Majority of 2019 Prgm 2020 Brazeau Cardium…
  42. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 42
    Peytos Returns 20th 1998-2018 2019 Post-Mortem Returns Analysis 43 Full cycle IRR is determined using actual capital spent on each well, including a 825k provision for land, seismic, and facilities in order to total to the 206MM…
  43. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 43
    Peytos Returns High Returns On Your Capital And Equity PEYTO Exploration & Development Corp. 60% 12 50% 10 40% 8 21 yr Avg ROE to 2019 30% 6 20% 4 10% 2 0% 0 Return On Capital Employed (%) Return On Equity…
  44. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 44
    Peytos Future PEYTO Exploration & Development Corp.
  45. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 45
    Peytos Future 2021 Outlook PEYTO Exploration & Development Corp. Drill 90Hz Wells (Liquids Rich Natural Gas) vs 65 in 2020 Market 3rd Party Capacity Offer Excess Capacity to Other Operators Increase Opportunities Undeveloped…
  46. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 46
    Peytos Future Gas Price Stability Before Returning to Growth PEYTO Exploration & Development Corp. 14 bbl/mmcf 14 bbl/mmcf 17 bbl/mmcf 20 bbl/mmcf 26 bbl/mmcf 28 bbl/mmcf 26 bbl/mmcf 25 bbl/mmcf 24 bbl/mmcf 5 4.19 Uses 90% of…
  47. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 47
    Peytos Future Lower Costs and Increase Liquids to Preserve Profit PEYTO Exploration & Development Corp. PEY 2017 PEY 2018 PEY 2019 PEY Goals 86% Gas 1.54/GJ*1.15 14% NGLs45/bbl=(60%of 75oil) 84% Gas 2.00/GJ*1.15 Revenue…
  48. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 48
    Peytos Future Blue Hydrogen We Have All the Right Ingredients PEYTO Exploration & Development Corp. Cascade Power Station H2 4 TCF of 2P Interconnected gas Big Sunny Rail, Hwy, and natural gas pipeline and facility…
  49. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 49
    Gas Marketing Future Market Diversification and Gas Price Protection PEYTO Exploration & Development Corp. 50 *Average Heating Value of approximately 1.15 GJ/mcf for Peytos gas 11/18/2020
  50. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 50
    Gas Marketing Fixed Price Swaps For Gas and Liquids PEYTO Exploration & Development Corp. Peyto Marketing Summary 1.15 Heating Value GJ/mcf AECO 7A Fixed Price Swaps (CAD/GJ) 1.315 cad/usd TOTAL TOTAL TOTAL TOTAL TOTAL Q4 2019 2019…
  51. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 51
    Gas Marketing Successful Hedging Strategy Smoothes Volatility PEYTO Exploration & Development Corp. Gas Price (/mcf) 10.00 10.00 9.00 Peyto has beat the AECO 9.00 8.00 monthly price in 12 of the 8.00 last 14 years using a 7.00…
  52. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 52
    Gas Marketing Balanced Revenue Stream PEYTO Exploration & Development Corp. 2019 ACTUALS Condy & C5+ Gas - AECO - Fixed Peyto Quarterly Revenue Breakdown (5a/7a) 11% 5% 300,000 60% 250,000 50% 200,000 40% Gas - AECO…
  53. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 53
    Gas Marketing LNG Consortium and Export Potential PEYTO Exploration & Development Corp. 54 11/18/2020
  54. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 54
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Leverage N Reserves Growth 55 11/18/2020
  55. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 55
    Quarterly Track Record PEYTO Exploration & Development Corp. 2020 2019 2018 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Operations Production Oil & NGLs (bbl/d) 11,263 11,126 11,585 10,922 11,221 10,650 11,110 10,703 9,692…
  56. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 56
    Organic Business Model Peytos Tax Pools PEYTO Exploration & Development Corp. 1,800 1,600 1,400 1,200 1,000 800 Federal Tax Pools Millions 600 400 Q4/19 200 - 1999 2000 2001 2002 2003 2004 2005 2006 2007…
  57. Corporate Presentation November 2020 – Peyto Exploration & Development Corp – slide 57
    Peytos Debt Blend of fixed term and revolving debt PEYTO Exploration & Development Corp. 50 4.88% End of 0.95B Revolver Oct 22 65 4.26% 100 3.70% 100 3.95% 100 4.39% 58 Interest rates are in CND 11/18/2020

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