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March 2021 Corporate Presentation – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Mar 1, 2021 · 55 slides

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Slides

  1. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 1
  2. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 2
    PEY.TO Who We Are PEYTO Exploration & Development Corp. N Pure Play Alberta Deep Basin - 465 mmcf/d Gas, 12,500 bbl/d NGLs N Returns Focused Strategy - Avg ROCE 15%, ROE 26% over last 22 yrs, among highest in the industry N…
  3. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 3
    PEY.TO 20 Year Growth Per Share PEYTO Exploration & Development Corp. Historical Per Share (or unit) and Shares (units) Outstanding numbers have been adjusted to reflect the May 27, 2005 2:1 stock split 4 BOE factor - 6 mcf = 1…
  4. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 4
    PEY.TO Total Shareholder Return Model PEYTO Exploration & Development Corp. Future Prospects Past Profits 5 BOE factor - 6 mcf = 1 bbl of oil equivalent 3/8/2021
  5. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 5
    Environmental Leadership Industry 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…
  6. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 6
    Environmental Leadership Continuously Improving Environmental Performance PEYTO Exploration & Development Corp. Peyto GHG Emissions Intensity 29.0 26.0 24.7 23.9 22.3 21.1 19.8 19.6 2013 2014 2015 2016 2017 2018 2019 2020…
  7. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 7
    The Peyto Strategy PEYTO Exploration & Development Corp. 8 3/8/2021
  8. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 8
    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…
  9. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 9
    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…
  10. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 10
    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 7 LNG Canada 20 6 NGTL Expansion 5+40% BCF/D 4 15 15.35…
  11. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 11
    Peyto FFO CTD Q4/20 CTD Q4/20 Peyto Capital Fund Growth From Cashflow The Peyto Strategy 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Q4 1999 Q2 2000 Q4 2000 Q2 2001 Q4 2001 Q2 2002 Q4 2002 Q2 2003 Q4…
  12. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 12
    The Peyto Strategy Invest For Profit Not Growth PEYTO Exploration & Development Corp. 800 700 600 500 400 Peyto Capital 300 CTD Q4/20 200 100 - 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 (100) CAPEX (MM)…
  13. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 13
    The Peyto Strategy Dividend Sustainability PEYTO Exploration & Development Corp. 3,000 2,500 2,000 Peyto Ctd. Earnings (MM) 1,500 Q4/20 1,000 500 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  14. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 14
    The Peyto Strategy 22 Year Cycle of Value Creation PEYTO Exploration & Development Corp. 6.40B Capital Investment 55% retained FFO YE 2020 26% equity 18% debt 2P NPV5 2.55B 8.65B Value Earnings 6.992B 2.46B in div/dist 0.38B to…
  15. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 15
    Peytos Profitable Business PEYTO Exploration & Development Corp. 16 3/8/2021
  16. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 16
    Peytos Profitable Business Build it for less than we sell it PEYTO Exploration & Development Corp. 2014 2015 2016 2017 2018 2019 2020F 2020 Land/Acq/Disp Seismic Drilling PDP FD&A /mcfe (2.25) (1.64) (1.44) (1.36) (1.18) (1.55)…
  17. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 17
    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 7% 2…
  18. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 18
    Peytos Profitable Business Peytos Moat is a Low-Cost Advantage PEYTO Exploration & Development Corp. 2.98 4.54 (0.14) 1.02 19 BOE factor - 6 mcf = 1 bbl of oil equivalent Data from Peters & Co. 3/8/2021 Gas…
  19. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 19
    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.…
  20. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 20
    Peytos Unique Assets PEYTO Exploration & Development Corp.
  21. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 21
    Peytos Assets Geographically Focused Core Areas PEYTO Exploration & Development Corp. 566,400 net acres 10 operated gas plants Cutbank ---(875 mmcf/d net capacity) 2,000+ km pipelines 1,442+ producing zones Kakwa 90,000 boe/d…
  22. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 22
    Peytos Assets PEYTO Deep Basin Permeability Segregation Exploration & Development Corp. FOOTHILLS STRUCTURES GAS AS ING INCRE BILITY EA PERM WATER TRANSITION ZONE WATER GAS ASE INCRE AREA OF GAS DEPTH…
  23. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 23
    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* 24 *NGL…
  24. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 24
    Peytos Assets Cecilia Acquisitions 35MM Effective Jan 1/21 PEYTO Exploration & Development Corp. Cecilia Gas Plant 12-34-56-22W5 Ownership: 100% WI NGTL Nosehill Ck North Meter Current Throughput: 15mmcf/d sales 5.6bbl/mmcf…
  25. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 25
    Peytos Assets Cecilia Acquisitions Ultra-low Decline PEYTO Exploration & Development Corp. 114 gross producers CTD 165 BCF 26 3/8/2021
  26. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 26
    Peytos Assets 1 Horizontal Deep Basin Driller PEYTO Exploration & Development Corp. Alberta Deep Basin Hz Spuds 1,200 Peyto spud its 1,000 th Hz w ell on Sept. 25, 2020 1,000 800 600 400 200 Peyto Deep Basin 0 Horizontal…
  27. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 27
    Peytos Assets PEYTO Large Hz MSF Inventory Exploration & Development Corp. Done1 To Do Total Total Total Total Hz(Vt) Hz Locations Vertical Hz Locations Unbooked3 Wells Wells Booked2 2 (2) 440 200 459(9) 424 5 1 1 4 1 2…
  28. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 28
    Peytos Assets Deep Basin Lands Go A Long Way PEYTO Exploration & Development Corp. 1,000 Peyto Lands 900 800 700 Net Sections 600 Net Peyto Sections 500 400 300 200 100 - Net Sections of Cardium, Dunvegan,…
  29. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 29
    Peytos Assets Facility Ownership And Control PEYTO Exploration & Development Corp. Cutbank Kakwa Oldman (with Deep Cut) & Oldman North Cecilia W Peyto Gas Plants Wildhay Nosehill Swanson YE 2020 WI 1 Oldman 125 mmcf/d…
  30. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 30
    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…
  31. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 31
    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 Cecilia Meter Station 139 mmcfd Capacity T.56 T.56 Obed North Oldman…
  32. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 32
    Peytos Assets Unique Infrastructure Location PEYTO Exploration & Development Corp. Alliance Cecilia Oldman & Oldman North Nosehill Wildhay Big Sunny Galloway Swanson 240 kV Power Lines Highway 16 Cascade Power…
  33. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 33
    Peytos Assets First 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…
  34. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 34
    Peytos Assets Long Reserve Life Asset PEYTO Exploration & Development Corp. RESERVE LIFE INDEX 30 25 YEARS AT Q4 PRODUCTION 27.4 20 15 17.6 10 Years PDP 5 9.0 0 2001 2002 2003 2004 2005 2006 2007 2008…
  35. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 35
    Peytos Assets Organic Reserves Growth PEYTO Exploration & Development Corp. 8,000 7,000 6,000 1,787 5,000 27% 15% CAGR 1,572 4,000 CAGR 3,000 1,647 2,000 1,000 2,034 TCFe of Discovered Reserves 0 Cum Production…
  36. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 36
    Peytos Assets What Shareholders Currently Own PEYTO Exploration & Development Corp. Tangible Infrastructure (Replacement Value as at Dec 31, 2020) 80 Compressors (3.25MM each) 259 MM 17 Inlets (1.8MM each) 31 MM 20 Refrigeration…
  37. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 37
    Peytos Incredible Returns PEYTO Exploration & Development Corp. 38 3/8/2021
  38. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 38
    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 (%) 2020 Brazeau Cardium 965 610 25% 3,060 262% 2020…
  39. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 39
    Peytos Returns 2020 Post-Mortem Returns Analysis Insight Deck PEYTO Exploration & Development Corp. 40 Full cycle IRR is determined using actual capital spent on each well, including a 825k provision for land, seismic, and…
  40. March 2021 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 22 yr Avg ROE to 2020 30% 6 20% 4 10% 2 0% 0 Return On Capital Employed (%) Return On Equity…
  41. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 41
    Peytos Future PEYTO Exploration & Development Corp.
  42. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 42
    Peytos Future 2021 Outlook PEYTO Exploration & Development Corp. Drill 80Hz Wells (Liquids Rich Natural Gas) vs 65 in 2020 Market 3rd Party Capacity Offer Excess Capacity to Other Operators Increase Opportunities Undeveloped…
  43. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 43
    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…
  44. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 44
    Peytos Future Lower Costs to Preserve Profit PEYTO Exploration & Development Corp. PEY 2018 PEY 2019 PEY 2020 2021 PEY Goals 86% Gas 2.11/GJ*1.15 86% Gas 2.50/GJ*1.15 14% NGLs31/bbl=(60%of 52oil) 3.27 2.78 2.23 3.32 14%…
  45. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 45
    Peytos Future Blue Hydrogen We Have All the Right Ingredients PEYTO Exploration & Development Corp. Cecilia Cascade Power Station H2 4 TCF of 2P Interconnected gas Big Sunny Rail, Hwy, and natural gas pipeline and…
  46. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 46
    Gas Marketing Future Market Diversification and Gas Price Protection PEYTO Exploration & Development Corp. We have virtually no exposure to AECO until 2023 Approx. 65% of 2021 is fixed price 47 *Average Heating Value…
  47. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 47
    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…
  48. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 48
    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 15 years using a 7.00…
  49. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 49
    Gas Marketing Balanced Revenue Stream PEYTO Exploration & Development Corp. 2020 ACTUALS Condy & C5+ - Fixed Gas - AECO 9% (5a/7a) 11% Condy & C5+ 19% Gas - AECO Fixed 23% LPG Gas - 5% Malin Gas- Henry Gas - 2.0% Hub…
  50. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 50
    Gas Marketing LNG Consortium and Export Potential PEYTO Exploration & Development Corp. 51 3/8/2021
  51. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 51
    Appendix PEYTO Exploration & Development Corp. N Quarterly Track Record N Tax Pools N Leverage N Reserves Growth 52 3/8/2021
  52. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 52
    Quarterly Track Record PEYTO Exploration & Development Corp. 2020 2019 2018 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Operations Production Oil & NGLs (bbl/d) 11,308 11,256 11,263 11,126 11,585 10,922 11,221 10,650 11,110…
  53. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 53
    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 Q4/20 200 - 1999 2000 2001 2002 2003 2004 2005 2006 2007…
  54. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 54
    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% 55 Interest rates are in CND 3/8/2021
  55. March 2021 Corporate Presentation – Peyto Exploration & Development Corp – slide 55
    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,…

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