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Annual General Meeting – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Jun 1, 2013 · 45 slides

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Slides

  1. Annual General Meeting – Peyto Exploration & Development Corp – slide 1
  2. Annual General Meeting – Peyto Exploration & Development Corp – slide 2
    Advisory I am going to tell you about my vision of Peytos future today. I will also tell you where I think commodity prices are going to go. These are called forward looking statements. I am being truthful and using everything I know…
  3. Annual General Meeting – Peyto Exploration & Development Corp – slide 3
    Then and Now 3 6/10/2013
  4. Annual General Meeting – Peyto Exploration & Development Corp – slide 4
    The Peyto Strategy Same As Always Strategic Intent Strategic Intent Find, develop & produce natural gas in Albertas Central Deep Basin. Focus on projects that are predictable and repeatable with long term value & immediate…
  5. Annual General Meeting – Peyto Exploration & Development Corp – slide 5
    The Peyto Strategy Still Most Active Deep Basin Driller 6 August 2002 5 6/10/2013
  6. Annual General Meeting – Peyto Exploration & Development Corp – slide 6
    The Peyto Strategy Lands Are More Of The Same 6 6/10/2013
  7. Annual General Meeting – Peyto Exploration & Development Corp – slide 7
    The Peyto Strategy Grow Our Assets Production 2P Reserves Funds from 2P NPV5 DA (Bcfe/mm sh) (MMcfe/d/mm sh) Operations (/sh) (/sh) 38 656 36 16.6 36 35 34 561 14.5 2.92 31 3.02 31 476 12.9 2.71 29 476 443 2.65 428…
  8. Annual General Meeting – Peyto Exploration & Development Corp – slide 8
    The Peyto Strategy Control Our Costs PDP FD&A Operating Interest Cost G&A (/Mcfe) Costs (/Mcfe) (/Mcfe) 2.95 2.88 w/transportation 0.51 0.50 (/Mcfe) 0.41 2.39 2.22 2.26 2.12 0.39 0.36 2.11 2.10 0.54 0.31 0.52 0.53…
  9. Annual General Meeting – Peyto Exploration & Development Corp – slide 9
    Then and Now - Operationally
  10. Annual General Meeting – Peyto Exploration & Development Corp – slide 10
    The Old Way Vertical Wellbore With Dual Completion 2700m MD 28 days Spud RR Drill 1.2MM Complete 1.2MM (200k/Frac) 80t sand in Notikewin 70t sand in Cardium 10 6/10/2013
  11. Annual General Meeting – Peyto Exploration & Development Corp – slide 11
    The Old Way Vertical Wellbore With Dual Cardium/Notikewin Completion 10,000 (MM) Notikewin Cardium Total Drill 1.2 Comp. 1.2 E/T 0.2 L/S/F 0.5 Total 3.1 1,000 EUR 1.5 BCFe 1.0 BCFe 2.5 BCFe F&D 1.24/mcfe Mcfe/d 100…
  12. Annual General Meeting – Peyto Exploration & Development Corp – slide 12
    Then and Now - Operationally Vertical To Multi-Stage Frac Horizontal Well Designs 12 6/10/2013
  13. Annual General Meeting – Peyto Exploration & Development Corp – slide 13
    The New Way Horizontal Wells With Multi-Stage Fracs (one zone at a time) - Notikewin 4270m MD 1500m Hz lateral (8 stg) 20 days Spud RR (8 days faster than vertical) Drill 2.9MM Complete 1.5MM (1.0MM for Fracs) 480t sand…
  14. Annual General Meeting – Peyto Exploration & Development Corp – slide 14
    The New Way Horizontal Wells With Multi-Stage Fracs (one zone at a time) - Cardium 3100m MD 870m Hz lateral (6 stg) 28 days Spud RR Drill 2.2MM Complete 1.9MM (1.0MM for Fracs) 360t sand (60t/stage) 14 6/10/2013
  15. Annual General Meeting – Peyto Exploration & Development Corp – slide 15
    The New Way Two Horizontal Wells With MSF 10000 (MM) Notikewin Cardium Total Drill 2.9 2.2 5.1 Comp. 1.5 1.9 3.4 E/T 0.4 0.4 0.8 L/S/F 1.0 1.0 2.0 Total 5.8 5.5 11.3 1000 EUR 4.3 BCFe 3.1 BCFe 7.4 BCFe Mcfe/d F&D 1.35/mcfe…
  16. Annual General Meeting – Peyto Exploration & Development Corp – slide 16
    Then and Now - Operationally Superior Hz Well Economics Old Way New Way Dual Card/Not Total Card Hz Not Hz (i n 2003) (i n 2013) (i n 2013) (MM) Drill 1.2 1.6 5.1 2.2 2.9 Complete 1.2 1.4 3.4 1.9 1.5 Equip/Tie 0.2 0.8 0.8 0.4…
  17. Annual General Meeting – Peyto Exploration & Development Corp – slide 17
    The New Way Large Hz MSF Inventory To Do Done1 Total Total Hz Hz Locations Total Total Locations Unbooked Vertical Hz Booked* Wells Wells 56 432 52 191 29 5 1 5 1 14 Old Way New Way 90 39 79 61 7 14 14 54 13 35 222…
  18. Annual General Meeting – Peyto Exploration & Development Corp – slide 18
    The New Way Expertise Through Experience 1 MILLION METERS of horizontal wellbore drilled since Aug 2009 18 6/10/2013
  19. Annual General Meeting – Peyto Exploration & Development Corp – slide 19
    The New Way Oldman Cheap Cut NGL Extraction New Oldman North Plantsite JT Chokes and (Newman) DeEth Tower Deep Cut Recompressors Dehy and Mole Sieve LPG storage and pump station Peyto Oldman Gas Plant: 125 MMCF/d…
  20. Annual General Meeting – Peyto Exploration & Development Corp – slide 20
    The New Way Self Sufficient Energy Inputs 5MM Estimated Savings/yr. 20 Diesel 1.00/litre Nat Gas 3.00/Mcf (0.10/litre) 6/10/2013
  21. Annual General Meeting – Peyto Exploration & Development Corp – slide 21
    Then and Now Economic Returns
  22. Annual General Meeting – Peyto Exploration & Development Corp – slide 22
    Then and Now Economic Returns Building it for less than we sell it PEY 2000 2002 PEY 2010 2012 PDP FD&A /mcfe (0.88) (2.15) 144% Cash Costs /mcfe (1.92) (1.34) (30%) Total Costs /mcfe (2.80) (3.49) 25% Sales Price…
  23. Annual General Meeting – Peyto Exploration & Development Corp – slide 23
    Then and Now Economic Returns Fighting Oil Price Inflation Aeco Monthly Gas Price Edmonton Par Oil Price 18 144 15 120 12 96 /BBL /GJ 9 72 6 48 3 24 - - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  24. Annual General Meeting – Peyto Exploration & Development Corp – slide 24
    Then and Now Economic Returns Service Rate Inflation Avg Peyto Drilling Dayrate (excluding TDS) 20,000 15,000 10,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 24 6/10/2013
  25. Annual General Meeting – Peyto Exploration & Development Corp – slide 25
    Then and Now Economic Returns Producing it for less than we sell it PEY 2000 2002 PEY 2010 2012 CAGR PDP FD&A /mcfe (0.88) (2.15) 9% Cash Costs /mcfe (1.92) (1.34) (1%) Total Costs /mcfe (2.80) (3.49) 2% Sales Price…
  26. Annual General Meeting – Peyto Exploration & Development Corp – slide 26
    Then and Now Economic Returns Cash Cost Inflation (not including Royalties) 25.00 20.00 15.00 8%/yr 10.00 CAGR 5.00 - Peyto Bonavista Baytex ARC Enerplus Pengrowth Crescent Point Trilogy Tourmaline 26 6/10/2013
  27. Annual General Meeting – Peyto Exploration & Development Corp – slide 27
    The New Way Profitable Even In The Lows Land 11MM PEY 2012 Seismic Drilling 2MM 212MM Compl. 127MM PDP FD&A (2.22) Wellsite 46MM Facilities 37MM /mcfe Acq/Disp 183MM 618MM PDP Reserves (before Prod.) 46.3 mmboes PDP FD&A…
  28. Annual General Meeting – Peyto Exploration & Development Corp – slide 28
    Then and Now Economic Returns Profitable Throughout The Cycle AECO Monthly 10 /GJ 37% Avg. Peyto Realized Gas Price (/mcfe) Profit Cum. To Date 8 6 Bonus 4 Cash Costs 2 PDP FD&A - 2000 2001 2002 2003 2004 2005…
  29. Annual General Meeting – Peyto Exploration & Development Corp – slide 29
    Then and Now - Corporately
  30. Annual General Meeting – Peyto Exploration & Development Corp – slide 30
    Then and Now Corporately PDP Reserves Growth 1,000 945 900 14% CAGR 800 765 700 664 583 595 600 591 600 527 (BCFe) 500 426 400 323 300 248 200 134 100 44 3 30 6/10/2013
  31. Annual General Meeting – Peyto Exploration & Development Corp – slide 31
    Then and Now Corporately Long Life Producing Reserve Base 1 TRILLION CUBIC FT (TCFe) of Proved Producing Reserves 31 TCFe Trillion cubic feet equivalent 6/10/2013
  32. Annual General Meeting – Peyto Exploration & Development Corp – slide 32
    Then and Now Corporately Production Growth (Boe/d) 60,000 50,000 40,000 16% CAGR 30,000 39% CAGR 20,000 10,000 32 6/10/2013
  33. Annual General Meeting – Peyto Exploration & Development Corp – slide 33
    Then and Now Corporately Net Debt (MM) 800 600 400 200 0 Peyto Net Debt (MM) 33 6/10/2013
  34. Annual General Meeting – Peyto Exploration & Development Corp – slide 34
    Then and Now Corporately Increased Access To Capital 1 BILLION DOLLARS of revolving, unsecured bank facility 34 6/10/2013
  35. Annual General Meeting – Peyto Exploration & Development Corp – slide 35
    Then and Now Corporately Consistent Leverage 2.5 2.0 1.5 1.0 0.5 0.0 PP NPV8 (B) Net Debt (B) 35 6/10/2013
  36. Annual General Meeting – Peyto Exploration & Development Corp – slide 36
    Then and Now Corporately Improving Balance Sheet 2.5 30,000 Net Debt/Production (/boe/d) Net Debt/Annualized FFO (/) 2.0 25,000 20,000 1.5 15,000 1.0 10,000 0.5 5,000 0 Debt/FFO Debt/flowing boe 36 6/10/2013
  37. Annual General Meeting – Peyto Exploration & Development Corp – slide 37
    Now and To Come
  38. Annual General Meeting – Peyto Exploration & Development Corp – slide 38
    2013 Outlook Biggest Year Ever Drill 100+ (100% Hz Wells, Liquids Rich Natural Gas) Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base 2013 Capital Program Shoot Seismic Acquire…
  39. Annual General Meeting – Peyto Exploration & Development Corp – slide 39
    2013 Outlook Same Stuff 100+ wells Cardium Hz 20% Notikewin Hz U. Falher Hz M. Falher Hz 70% Wilrich Hz Bluesky Hz 7% Cadomin Hz 3% 100% 500MM Peyto Gas Plants Drill/Comp 72% WI ETA Oldman 125 mmcf/d 100% Equip/Tiein 8%…
  40. Annual General Meeting – Peyto Exploration & Development Corp – slide 40
    2013 Outlook Large Resource + Low Cost = Profitable Growth Budget vs Actual Production 62,000-67,000 boed 70,000 56,000 boed 60,000 Deep Cut Plant Outage 42,100 boed 50,000 40% CAGR BOED 40,000 30,600 boed…
  41. Annual General Meeting – Peyto Exploration & Development Corp – slide 41
    2013 Outlook It Just Gets Easier to Grow 35% 35%* 33% 32% 31% 30% 618MM Annual Production Wedge (boe/d) 29% 379MM 113MM 26% 139MM 27% Base 358MM 26% Decline 312MM Triple production in 3 years 79MM 231MM 23% 139MM…
  42. Annual General Meeting – Peyto Exploration & Development Corp – slide 42
    2013 Outlook Continuously Improve Profitability 2013 Goals* Pad drilling CNG powered rigs PDP FD&A…
  43. Annual General Meeting – Peyto Exploration & Development Corp – slide 43
    Future Outlook Organic Growth Potential 100,000 90,000 80,000 70,000 60,000 First forecast NA BOED 50,000 LNG exports. 40,000 30,000 20,000 10,000 0 Future production numbers are not a forecast, simply for…
  44. Annual General Meeting – Peyto Exploration & Development Corp – slide 44
    Future Outlook Organic Growth Potential 18 90 700 Production per Unit or Share (boe/d per million) 16 600 14 500 PEY+ Cumulative Div./Dist. 12 Gas Price (/GJ) 400 10 45 8 300 6 200 4 100 2 0 - -…
  45. Annual General Meeting – Peyto Exploration & Development Corp – slide 45
    Thank You For Joining Us Today Pray For Sunshine

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