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TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Jul 1, 2013 · 41 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. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 1
    www.Peyto.com TD Securities July 2013 Calgary Energy Conference
  2. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 2
    Peyto Profile N TSX Listing: PEY N Monthly Dividend: 0.08/share (incr. from 0.06 effective May/13) N Shares Outstanding: 148.7 million, 5% insiders N Current Production: 345 MMCFe/d (57,500 boe/d) N YE 2012 2P Reserves: 2.35 TCFe…
  3. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 3
    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…
  4. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 4
    The Peyto Strategy Growth per Share 2013 YE Target 67,000 boe/d 12 60 450 Production per Unit or Share (boe/d per million) 400 10 350 Gas Price (/GJ) 8 PEY+ Cum Div 300 250 6 30 200 150 4 100 2 50…
  5. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 5
    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…
  6. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 6
    Peytos Profitable Business
  7. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 7
    Peytos Profitable Business Build it for less than we sell it 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.)…
  8. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 8
    Peytos Profitable Business Profitable Even Through The Lows AECO Monthly 10 /GJ 37% Ave. 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 2006…
  9. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 9
    Peytos Profitable Business Cost Control Challenges for the Canadian Industry CND 2012** CND 2011* CND 2010* PDP FD&A /mcfe (3.84) (4.17) (4.71) Cash Costs /mcfe (3.79) (3.91) (3.71) Sales Price /mcfe 7.12 7.89 7.69 (0.74)…
  10. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 10
    Peytos Unique Assets
  11. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 11
    Peytos Assets Geographically Focused Core Areas 400,000 net acres 7 operated gas plants ---(440 mmcf/d net capacity) Cutbank 1000+ km pipelines 800+ producing zones Kakwa 60,000 boe/d Processed by Peyto Chicken Leland 150…
  12. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 12
    Peytos Assets Deep Basin Expert AB Hz Deep Basin Gas 100 Driller 2012 90 80 2012 Gas Spuds 70 60 A AA C A F FA F F A F CC AF CAC A A A C C ACF AA FCA A C CCC A F A A 50 A CA CCC AA F CCF A A FA CCF C…
  13. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 13
    Peytos Assets Multi Zone Stacked Sandstone Reservoirs Up to per section 14 *NGL recoveries can increase by 15+ bbl/mmcf with deeper cutting processing facilities 6/28/2013
  14. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 14
    Peytos Assets Spirit River Sands Have Provided Significant Growth 68% 15 6/28/2013
  15. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 15
    Peytos Assets Deep Basin Lands Go A Long Way 450 Peyto Lands 400 Net Lands (000's acres) 350 +32% YoY 300 250 200 150 Net Peyto Sections 100 50 - Net Sections of Cardium, Dunvegan, Notikewin, Falher, Wilrich,…
  16. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 16
    Peytos Assets 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 90 39 79 61 7 14 14 54 13 35 222 14 93 97 165…
  17. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 17
    Peytos Assets Longest Reserve Life 10.0 5.0 Peyto 2012 PP RLI (yrs) 0.0 ARX AAV ZAR CPG ERF VET PEYTO NGL BIR PBN CR BNP PGF FEL PWT TET PMT BTE Industry 2012 PP RLI (yrs)…
  18. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 18
    Peytos Assets Lowest Operating Costs Gas Producers How We operate Full facilities No water No sour Chemical recycle Nat gas fuel Continuous CAGR innovation 0.5 %/yr 19 BOE factor - 6 mcf = 1 bbl of oil equivalent…
  19. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 19
    Peytos Assets Deep Gas Drilling Royalty Incentives 3,500-4,000 m MD Trigger depth for Natural Gas Deep Drilling Program 2,200 m reduced from TVD 2,500m TVD to 2,000m TVD 3,700-4,000 m MD 2,650-2,850 m TVD 4,200 m MD…
  20. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 20
    Peytos Assets Facility Ownership and Control Peyto Gas Plants Cheap Cut ETA ETA WI Oldman 125 mmcf/d Q4 12 100% Nosehill 120 mmcf/d Q4 13 100% Wildhay 70 mmcf/d Q1 14 100% Galloway 60 mmcf/d 69% Newman 30 mmcf/d 100% Oct/13 Kakwa…
  21. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 21
    Peytos Assets Self Sufficient Energy Inputs 5MM Estimated Savings/yr. 22 Diesel 1.00/litre Nat Gas 3.00/Mcf (0.10/litre) 6/28/2013
  22. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 22
    Peytos Incredible Returns
  23. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 23
    Peytos Business Focus on Returns Drives Capital Discipline 2013 2012 17,600/boe/d ONR Acq 38,600/boe/d 2011 17,500/boe/d 70,000 2010 17,300/boe/d 70,000 2009 17,300/boe/d 2013YE Target 67,000 boe/d Annual Production Wedge…
  24. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 24
    Peytos Returns Returns Driven Organic Activity 70,000 60,000 2012 50,000 40,000 30,000 20,000 10,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2012 Capital Program 40,000 76 Net Wells…
  25. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 25
    Peytos Returns Flexible Capital Allocation Required Bluesky 39% Includes provision of 520k per well for Facilities, Land and Seismic Full Cycle IRR on 86 of 86 2012 Wells by Species, Insite Dec 31/12 Prices 26 6/28/2013
  26. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 26
    Peytos Returns Continuously Improving Results 3,000 6,000 Cardium HZ 45 bbl/mmcf* Notikewin HZ +10 bbl/mmcf Recomb Raw Gas (Mcfe/d) Recomb Raw Gas (Mcfe/d) 2009/10 - 11 wells 2010 - 9 wells 2,000 2001 - 11 wells 4,000…
  27. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 27
    Peytos Returns High Returns on Capital and Equity 60% 10 50% 8 40% 6 30% 13 yr Average ROE 4 20% 10% 2 0% 0 Return On Capital Employed (%) Return On Equity (%) Earnings/share Realized Gas Price (/mcfe) 13 yr Average…
  28. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 28
    Peytos Future
  29. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 29
    2013 Outlook Biggest Year Ever Drill (100% Hz Wells, Liquids Rich Natural Gas) Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base Shoot Seismic 2013 Capital Program Acquire Additional…
  30. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 30
    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…
  31. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 31
    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…
  32. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 32
    2013 Outlook Continuously Improve Profitability 2013 Goals* Pad drilling CNG powered rigs PDP FD&A…
  33. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 33
    Future Outlook Organic Growth Potential 100,000 90,000 80,000 70,000 60,000 First forecast NA BOED LNG exports. 50,000 40,000 30,000 20,000 10,000 0 34 6/28/2013
  34. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 34
    Appendix Quarterly Track Record Tax Pools Payout Hedging Strategy Gas Marketing Liquids Marketing FAQ 35 6/28/2013
  35. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 35
    Quarterly Track Record 2013 2012 2011 2010 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Operations Production Oil & NGLs (bbl/d) 5,840 4,778 5,286 5,236 4,480 4,101 3,856 3,947 3,918 3,811 3,746 3,389 Natural gas (mcf/d) 297,191…
  36. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 36
    Organic Business Model Peytos Tax Pools 1,400 1,200 1,000 800 Federal Tax Pools Millions 600 Q4/12 400 200 - 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CEC UCC (25%) CEE (100%) CDE…
  37. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 37
    Peytos Payout Dividend Sustainability 1,600 1,400 1,200 (Millions) 1,000 800 Peyto Cum. Earnings 600 Q4/12 400 200 0 Q1 2000 Q4 2000 Q3 2001 Q2 2002 Q1 2003 Q4 2003 Q3 2004 Q2 2005 Q1 2006 Q4 2006 Q3…
  38. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 38
    Successful Hedging Strategy Peyto Realized Price History 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 16.00 Peyto 7.51/mcf Peyto 7.38/mcf Peyto 8.78/mcf Peyto 8.48/mcf Peyto 8.42/mcf Peyto 8.64/mcf Peyto 6.44/mcf…
  39. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 39
    Gas Marketing Future Sales (contracts before 2013) Financial Hedges - Gas Pricing 2012 2013 2014 2015 Date contracted GJ/d (/GJ) A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O 08-Oct-10 5000…
  40. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 40
    Gas Marketing Future Sales (Contracted in 2013) Financial Hedges - Gas Pricing 2012 2013 2014 2015 Date contracted GJ/d (/GJ) A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O 15-Jan-13 5000…
  41. TD Securities Calgary Energy Conference – Peyto Exploration & Development Corp – slide 41
    Liquids Marketing Future Sales Financial Hedges - Propane 2012 2013 2014 Term bbl/d Pricing (/bbl) A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M From To 01-Sep-12 31-Mar-13 66 49.56 01-Sep-12 31-Mar-13…

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