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January Presentation – Baytex Energy Corp.

Baytex Energy Corp. · Jan 1, 2014 · 48 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 Presentation – Baytex Energy Corp. – slide 1
    January Presentation
  2. January Presentation – Baytex Energy Corp. – slide 2
    Investment Highlights Focus on per share growth in production and reserves Organic Oil Growth Long-term, Low-Cost Inventory Sector-leading capital efficiency Operational excellence Meaningful Dividend Focus on dividend growth…
  3. January Presentation – Baytex Energy Corp. – slide 3
    Corporate Profile Summary of Securities Trading Symbol TSX / NYSE: BTE Average Daily Volume (1) Canada: 590,400 / U.S.: 145,500 Shares Outstanding (Current) 125.4 million Market Capitalization / Enterprise Value 5.2 billion / 6.0…
  4. January Presentation – Baytex Energy Corp. – slide 4
    Operating Areas Production (Q3/2013) Company Total = 60,184 boe/d Lloydminster Peace River Heavy Oil 32% Heavy Oil 43% Light Oil 14% Gas 11% Operating Income (Q3/2013) Company Total = 234 million (42/boe) Lloydminster…
  5. January Presentation – Baytex Energy Corp. – slide 5
    Corporate Growth Strategy Exploit existing oil assets at Peace River (multi-lateral wells), Lloydminster (growing use of horizontal wells) and North Dakota (Bakken-Three Forks development) Near Term (1-2 years) Cold Development…
  6. January Presentation – Baytex Energy Corp. – slide 6
    Oil-Equivalent Production Growth 60,000 40,000 boe / d 61,000 57,100 53,986 50,132 44,341 20,000 40,239 41,382 34,022 34,647 34,292 36,222 0 (1) (2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  7. January Presentation – Baytex Energy Corp. – slide 7
    Reserve Growth / Contingent Resources 292 229 252 187 197 168 141 146 107 123 2P RLI (years) 8.0 9.5 10.1 11.5 11.7 12.2 12.6 13.9 13.0 14.5 Oil Weighting 83% 78% 79% 83% 85% 84% 89% 91% 92% 93% Low (C1) 622 MMboe…
  8. January Presentation – Baytex Energy Corp. – slide 8
    Balance Sheet Strength ( millions) Q3 2013 Credit Facilities Unused Used Bank Loan (1) 244.6 Long-Term Debt (2),(3) 454.3 Working Capital Deficiency 57.7 Undrawn 605 million, or 71%(1) Total Monetary Debt (3) 756.6 Debt to…
  9. January Presentation – Baytex Energy Corp. – slide 9
    Marketing
  10. January Presentation – Baytex Energy Corp. – slide 10
    2014: A Break Out Year for Canadian Heavy - Q3/2013 WCS heavy oil differential = 17% of WTI - Weak Q4/2013 WCS heavy oil differential = 33% of WTI - Planned and unplanned refinery outages - Pipeline maintenance - Increased supplies…
  11. January Presentation – Baytex Energy Corp. – slide 11
    Heavy Oil Differential WCS and Maya Sources: Net Energy Inc., Argus Media, PIRA 14
  12. January Presentation – Baytex Energy Corp. – slide 12
    Crude Oil Rail Exports North Dakota Western Canada 800 Q4 / 2014 Projected Western Canada Rail Capacity (800 - 900 mbbl/d) 700 Mid-2014 Projected Western Canada 600 Rail Capacity ( 600 mbbl/d) 500 Mbbl/d 400 300 200…
  13. January Presentation – Baytex Energy Corp. – slide 13
    Marketing - Crude by Rail Rail a Key Component of Market Access - Trucking flexibility helps optimize value of production - Rail has become an effective vehicle for management of heavy oil differentials - Undiluted heavy oil sales…
  14. January Presentation – Baytex Energy Corp. – slide 14
    Oil Marketing Portfolio Q1 2014 Heavy Oil Sales Portfolio WTI Financial Hedging Q1 / 2014 % Hedged 51% Fixed Price US99.24/bbl Q2 / 2014 % Hedged 32% Fixed Price US98.71/bbl FY 2014 % Hedged 31% Fixed Price US98.18/bbl…
  15. January Presentation – Baytex Energy Corp. – slide 15
    Heavy Oil Hedge Coverage Q1/2014 FY 2014 Fixed Physical Delivery (Pipeline) Blended WCS (bbl/d) 5,000 5,750 Equivalent Heavy Production (bbl/d) 3,825 4,425 % of Gross Heavy Production 8% 9% WCS Dollar Differential to WTI 18.42…
  16. January Presentation – Baytex Energy Corp. – slide 16
    Key Projects Overview
  17. January Presentation – Baytex Energy Corp. – slide 17
    Peace River Oil Sands 306 net sections of oil sands leases 551 million barrels of economic contingent resource * Primary Development Production (Q3/2013) 25,400 bbl/d 2P Reserves (YE12) 64 mmbbls Drilling Inventory(1) 5 years…
  18. January Presentation – Baytex Energy Corp. – slide 18
    Multi-Lateral Cold Horizontal Wells Reservoir Characteristics (1) Formation Bluesky Depth 600 700 metres Oil Quality 11 API Average Porosity 28% Permeability 0.5 5.0 darcies Oil Saturation 70% Recovery Factor 5 7% Well…
  19. January Presentation – Baytex Energy Corp. – slide 19
    Peace River Cliffdale Thermal EOR Development Recovery per 15-well Module (Baytex estimates based on Cliffdale pilot) - CAPEX = 55 million - Recovery factor 30% based on numerical reservoir simulation - Oil rate = 2,000 bbl/d…
  20. January Presentation – Baytex Energy Corp. – slide 20
    Peace River - Cliffdale Development 10-Well Module Full first-cycle steaming complete in Q4/12 Current production (Q3 2013) = 600 bbl/d 15-Well Module Regulatory approval March 2013 Facility construction complete…
  21. January Presentation – Baytex Energy Corp. – slide 21
    Lloydminster Lloydminster Heavy Oil Heavy Oil 730 net sections; 217 million barrels of economic contingent resource * Area Statistics Production (Q3/2013) 18,900 bbl/d 2P Reserves (YE12) 116 mmbbls Oil Gravity 11 to 18 API…
  22. January Presentation – Baytex Energy Corp. – slide 22
    Lloydminster Development Vertical Wells Completed Well Cost 450,000 Production (30-day IP) 30-50 bbl/d EUR 30-50 mbbl Capital Efficiency 11,250 per bbl/d Development Cost 11.25/bbl Horizontal Wells Completed Well Cost…
  23. January Presentation – Baytex Energy Corp. – slide 23
    Bakken / Three Forks Development 126 net sections; 27 million barrels of economic contingent resource * SASKATCHEWAN Bakken-Three Forks Baytex Lands Production (Q3/2013) 3,400 bbl/d 2P Reserves (YE12) 34 mmbbl NORTH DAKOTA…
  24. January Presentation – Baytex Energy Corp. – slide 24
    Bakken / Three Forks Development Current development predominantly in the Three Forks formation Additional potential to develop Middle Bakken Evolution of frac staging: initially 6 stages/well 20 stages/well in 2011 30+…
  25. January Presentation – Baytex Energy Corp. – slide 25
    North America Resource Play Comparables Half Cycle Payouts 5.0 4.5 Baytex Oil Plays 4.0 Natural Gas Plays Oil Plays 3.5 3.0 Years 2.5 2.0 1.5 1.0 0.5 0.0 The above chart represents the Top North American Resource…
  26. January Presentation – Baytex Energy Corp. – slide 26
    North America Resource Play Comparables Rate of Return 250% 225% Baytex Oil Plays 200% Natural Gas Plays 175% Oil Plays Rate of Return 150% 125% 100% 75% 50% 25% 0% The above chart represents the Top North American…
  27. January Presentation – Baytex Energy Corp. – slide 27
    Corporate Growth Strategy
  28. January Presentation – Baytex Energy Corp. – slide 28
    2014 Operating Plan Targeting 6% Growth 2014 Production Guidance 2014 Capital Budget and Wells Drilled Amount Wells Drilled - 485 million capital budget ( millions) (net) Peace River 95% of expenditures directed Conventional 178 36…
  29. January Presentation – Baytex Energy Corp. – slide 29
    Corporate Growth Strategy Production (boe/d) Conventional Drilling Inventory 100,000 Peace River Multi-laterals 5 years 80,000 Lloydminster Heavy Oil 6.5 years 60,000 North Dakota Bakken 10+ years Conventional Oil and Gas 10+…
  30. January Presentation – Baytex Energy Corp. – slide 30
    Why Invest in Baytex Superior Asset Base Income Payout Proven Track Record - Low cost development - Committed to paying a - Best-in-class balance sheet inventory oil focus meaningful dividend - Sophisticated risk - Sector leading…
  31. January Presentation – Baytex Energy Corp. – slide 31
    Supplementary Information - Oil Projects 34
  32. January Presentation – Baytex Energy Corp. – slide 32
    Cold Lake SAGD Acquisition 120 million purchase closed COLD LAKE / ARDMORE October 2, 2012 SUGDEN 100% W.I. in approximately 46 sections of oil sands leases Regulatory approval received for a LINDBERGH commercial SAGD…
  33. January Presentation – Baytex Energy Corp. – slide 33
    Gemini SAGD Project Reservoir Characteristics GP Channel - Viscosity: 40,000 - 120,000 c.p. - Porosity: 36% - Depth: 375 metres - Permeability: 3 darcies - Channel Thickness: 30 metres - Bitumen Saturation: 80% - Average Clean…
  34. January Presentation – Baytex Energy Corp. – slide 34
    Supplementary Information - Financial 37
  35. January Presentation – Baytex Energy Corp. – slide 35
    Share Ownership Breakdown Ownership Breakdown Institutional 63% Retail 35% US - Retail 10% Europe/Asia - Institutional 4% Insiders 2% US - Institutional 8% Insiders 2% 100% Canada 76% U.S. 18% Canada - Retail 25% Canada -…
  36. January Presentation – Baytex Energy Corp. – slide 36
    2014E Funds from Operations (C mm) and Debt to FFO Heavy Oil Differential (% of WTI) 18% 23% 28% WTI (US/bbl) 90 680 (1.2x) 623 (1.4x) 567 (1.6x) 95 733 (1.0x) 673 (1.2x) 614 (1.4x) 100 786 (0.9x) 723 (1.0x) 660 (1.2x)…
  37. January Presentation – Baytex Energy Corp. – slide 37
    2014E Funds from Operations Sensitivities Funds from Operations Impact (C Millions) With Current Without Hedges Hedges WTI +/- US1.00/bbl 10.6 15.4 Natural Gas +/- C0.25/mcf 3.1 3.4 Heavy Oil Differential +/- 1% 11.4 17.9…
  38. January Presentation – Baytex Energy Corp. – slide 38
    Other Commodities / FOREX Hedge Coverage Q1/2014 FY 2014 Natural Gas % of Volumes Hedged at Fixed Price (1) 25% 38% Average Fixed Price (US/mmBtu) 4.19 4.17 % of Volumes Hedged Using Collars (1) 30% 7% Average Collar Floor/Ceiling…
  39. January Presentation – Baytex Energy Corp. – slide 39
    Distribution / Dividend History Payout Ratio - Net of DRIP (% ) Monthly Dividend (C) Payout Ratio - Before DRIP (% ) 120% 0.30 100% 0.25 Payout Ratio (Percent of FFO) Monthly Dividend (C) 80% 0.20 60% 0.15 40% 0.10…
  40. January Presentation – Baytex Energy Corp. – slide 40
    Capital Program Efficiency 3-Year 5-Year Average Average 2010 2011 2012 2010-12 2008-12 FD&A Cost (P + P) (1) Excluding FDC (C/boe) 5.90 12.46 4.19 7.05 8.60 Including FDC (C/boe) 13.17 18.57 11.61 14.06 15.22 Recycle Ratio (P…
  41. January Presentation – Baytex Energy Corp. – slide 41
    Per Share Metrics For Comparison to Non-Dividend Paying Companies Debt and Dividend Adjusted CAGR 1-Year 3-Year 5-Year Long-Term Oil Reserves (bbl/share) 14% 17% 15% 15% Total Reserves (boe/share) 12% 16% 13% 13% Oil Production…
  42. January Presentation – Baytex Energy Corp. – slide 42
    Appendix: Heavy Oil Pricing 45
  43. January Presentation – Baytex Energy Corp. – slide 43
    Midstream Heavy Oil Fundamentals Infrastructure Development Source: Canadian Association of Petroleum Producers Crude Oil Forecast, Markets and Pipelines Report, June 2012. 46
  44. January Presentation – Baytex Energy Corp. – slide 44
    Midstream Heavy Oil Fundamentals Near-Term Pipeline Projects: Enbridge Mainline 1. Toledo (Line 17) Partial Twin: 80,000 bbl/d Early-2013 2. Line 9 Reversal: 240,000 bbl/d Early-2014 3. Line 5 Expansion: 50,000 bbl/d Early-2013 4.…
  45. January Presentation – Baytex Energy Corp. – slide 45
    Midstream Heavy Oil Fundamentals Near-Term Pipeline Projects: Seaway and Flanagan South Source: Enbridge 48
  46. January Presentation – Baytex Energy Corp. – slide 46
    WCSB Heavy Oil Production / Potential Midstream Capacity 4,000 3,500 Heavy Oil to Market (mbbls/day) TransMtn Expansion (mid-2017) - 450kbd 3,000 Blended Heavy Production Forecasts Keystone XL (mid-2015) - 400kbd (PIRA /…
  47. January Presentation – Baytex Energy Corp. – slide 47
    U.S. Gulf Coast HeavyUS OilGulf Coast Heavy Oil Demand Demand U.S. imports of Canadian heavy oil rose Total U.S. heavy oil imports averaging to 1.63 million bbl/d in September 2013. 3.95 million bbl/d in 2013 (40% from Canada).…
  48. January Presentation – Baytex Energy Corp. – slide 48
    Portfolio Management of Differentials Canadian heavy oil differentials: market developments and outlook Seasonal weakness in differentials for all Canadian grades of crude oil; down from peak levels in Summer 2013 Planned and…

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