2011 2003 2010 1998 2003 www.Peyto.com TD Chicago Roadshow July 2012
Peyto Profile PEYTO Exploration & Development Corp. N TSX Listing: PEY N Monthly Dividend: 0.06/share N Shares Outstanding: 138 million (6% insider ownership) N Current Production: 250 MMCFe/d (42,000 boe/d) N Q1 2012 Net…
The Peyto Strategy Deploy Superior Business Acumen N Deep basin technical expertise N Continuous focus on returns N Internally generated drilling ideas (over 1,100 locations to date) Develop Superior Assets N Operated and…
The Peyto Strategy Growth per Share 400 10 50 Production per Unit or Share (boe/d per million) 9 350 8 300 7 Gas Price (/GJ) 250 6 PEY+Div 200 5 25 4 150 3 100 2 50 1 YoY production 0 - -…
The Peyto Strategy Returns Driven 250 200 2011 150 Net Capital to PV5 100 50 0 Production/share growth 250 2011 Capital Program 62 Net Wells 200 21,700 boe/d 150 2P Reserves/share growth 100 50 0…
Peytos Profitable Business Build it for less than you sell it 8 2011 PP FD&A 6 /mcfe AECO 4 10 Monthly 10 /GJ 2 Peyto Unhedged Realized Price (/mcfe) Peyto Realized Gas Price (/mcfe) 8 39% 8 - Average PRQ*…
Peytos Profitable Business Cost Control Challenges for the Canadian Industry CND 2011* CND 2010* CND 2009** PDP FD&A /mcfe (4.20) (4.74) (4.31) Cash Costs /mcfe (3.91) (3.64) (3.63) Sales Price /mcfe 7.89 7.60 7.27 (0.68)…
Peytos Profitable Business Liquids Rich Gas Streams Effective Gas Price per Mcfe (assumes 100/bbl oil) 6 Effective Price (/Mcfe) 5 4 Cardium (45 bbl/MMcf sls) Wilrich (7 bbl/MMcf sls) 3 + PP FD&A 2.12/Mcfe Notikewin…
Peytos Unique Assets
Peytos Assets Geographically Focused Core Areas 313,800 net acres (825,000 net acres for all zones) 5 operated gas plants ---(340 mmcf/d capacity) Cutbank 900+ km pipelines 750+ producing zones Kakwa 42,000 boe/d Processed by…
Peytos Assets Deep Basin Lands Go A Long Way Net Peyto Sections Net Sections of Cardium, Dunvegan, Notikewin, Falher, Wilrich, Bluesky, & Cadomin Net Sections for 2.2 TCFe of 2P EUR 15 TCFe Trillion Cubic Feet…
Peytos Assets Deep Basin Permeability Segregation FOOTHILLS STRUCTURES GAS AS ING INCRE BILITY EA PERM WATER TRANSITION ZONE WATER GAS ASE INCRE AREA OF GAS DEPTH MATURATION 16 7/4/2012
Peytos Assets Applying Hz Technology to Tight Deep Basin Sands Up to per section 17 *NGL recoveries can increase by up to 15 bbl/mmcf with deeper cutting processing facilities 7/4/2012
Peytos Assets ONR Acquisition* (Pending Mid-August 2012 Closing) PEYTO Exploration & Development Corp. N 5,600 boe/d (31 mmcf/d natural gas, 460 boe/d NGLs) N 98% operated and processed N 125 gross (110 net) sections of lands…
PEY/ONR Strategic Fit Infrastructure Access for Peyto Step-out Areas PEYTO Exploration & Development Corp. Pedley Edson Ansell 19 Subject to Mid August 2012 closing. See press release dated July 3, 2012 7/4/2012
PEY/ONR Strategic Fit ONR is Step 1 in Longer Term Plan PEYTO Exploration & Development Corp. PEY ONR ONR Spirit River PNG Spirit River PNG Expiries Apr 1/12 - Jul 1/13 SPIRIT RIVER 12 MONTH PNG EXPIRY GROWTH…
Peytos Assets Large Hz MSF Inventory Done To Do Total Total Total Total Total Vertical Hz Hz Hz Locations ONR Hz Wells Wells Locations Unbooked Locations Booked* Unbooked** 432 40 206 103 9 5 1 6 10 1 2 12 90 29 44 25…
Peytos Assets Longest Reserve Life 10 Peyto 2011 PP RLI (yrs) 5 0 Industry 2011 PP RLI (yrs) 22 2011 Year End Proved Producing Reserve Life (using Q4 2011 production rate). 7/4/2012 Source: Company AIF & Financials
Peytos Assets Lowest Operating Costs 20 15 10 Peyto 2011 Op Costs (/boe) 5 Industry 2011 Op Costs (/boe) Operating Costs include Transportation costs. (/boe) 23 BOE factor - 6 mcf = 1 bbl of oil equivalent 7/4/2012
Peytos Assets Lowest Operating Costs Gas Producers 1 %/yr 24 BOE factor - 6 mcf = 1 bbl of oil equivalent 7/4/2012 Operating costs include transportation
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…
Peytos Assets Lowest FD&A Cost 50 40 30 Peyto 2011 PP FD&A (/boe) 20 10 Industry 2011 PP FD&A (/boe) 26 Proved Producing FD&A Cost Inclusive of Acquisition, Finding and Development Capital *Inclusive of significant…
Peytos Assets Low FD&A Costs = High Recycle Ratio Proved Producing 50 Total Proved Proved + Probable 40 Field Netback 30 20 Peyto PP Recycle Ratio 10 (10 yr) 0 Recycle Ratio is the Netback divided by FD&A *FD&A costs…
Peytos Assets Lowest Total Costs 200% Total Costs as % of Total Revenue 150% 100% Peyto 2011 Margin 50% 0% Op Costs Royalties G&A Interest PDP FD&A Industry 2011 Margin 28 Total Costs per boe includes…
Peytos Incredible Returns
Peytos Returns High Returns on Capital and Equity 60% 10 50% 8 40% 6 30% 12 yr Average ROE 4 20% 10% 2 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 Return On Capital Employed (%) Return On…
The Peyto Strategy Strong Per Share Operating and Profit Margin 140 Revenue 120 100 80 millions 60 Funds from 40 Ops Profit Margin 20 Earnings (last 12 yrs) 0 31 Funds from Operations is defined as earnings…
Peytos Returns Shareholder Returns = NAV Growth + Income 60 Cum Div/Dist P+P 50 PV5 debt adj./share TP 40 PDP 30 20 10 Compound Annual - Growth Rate 32 PV5 DA/share is Before Tax Net Present Value, discounted…
The Peyto Strategy Maintain a Strong Balance Sheet Q1 2012 Net Debt/FFO 3.0 2.5 2.0 Peyto Q1/12 D/FFO 1.5 1.0 0.5 0.0 BTE POU NGL PWT AAV ARX PGF PRQ PMT CPG ERF PBN ZAR BNP CR…
Peytos Returns Careful Use of Debt 2.5 100% 2.0 80% 1.5 60% 1.0 40% 0.5 20% Average Net Debt - 0% to NPV PDP NPV8 (B) Net Debt/PDP NPV8 Proved Developed Producing (PDP) Net Present Value (NPV) discounted at 8%, as…
2012 Outlook More Of 2011 Drill (100% Hz Wells, liquids rich) Expand & Extract Increase Processing Capacity & NGL Yield Increase Undeveloped Land Base Shoot Seismic 2012 Capital Program Acquire Additional Opportunities and…
2012 Outlook Levering the Low Cost Advantage 4.00 AECO Monthly Gas Price Actual & Forecast (/GJ) 3.50 www.gasalberta.com 3.00 2.50 2.00 June 22, 2012 Strip 1.50 April 11, 2012 Strip 1.00 Jan11 Jan12 Jan13…
2012 Outlook It Just Gets Easier to Grow 2012 Decline Assumes 2011 Base 20,700 13% 2011 New 21,300 48% 31% forecast base decline* 2011 Decline 2010 Base = 15,500 14% 2010 New = 15,100 53% 33% actual base decline Triple…
2012 Outlook Organic Growth Potential 70,000 60,000 50,000 BOED First forecast NA 40,000 LNG exports. 30,000 20,000 10,000 0 38 7/4/2012
Appendix Quarterly Track Record Tax Pools Payout Ratio Gas Marketing Hedging Strategy Reserves data volumes, values, RLI 39 7/4/2012
Quarterly Track Record 2012 2011 2010 2009 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Operations Production Oil & NGLs (bbl/d) 4,101 3,856 3,947 3,918 3,811 3,746 3,389 3,439 3,322 3,465 3,330 3,028 Natural gas (mcf/d) 220,811…
Payout Ratio History Maximum Historical Payout Ratio 91% 100% Minimum Converted 42% 80% to a Trust at 57% 60% 40% 20% 0% Cash Payout Ratio Total Payout Ratio Converted to a Corp. at 32% Historical Per Unit and…
Gas Marketing Future Sales Financial Hedges - Gas Pricing 2011 2012 2013 2014 Term 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 From To 1-Apr-10 31-Mar-12 5000 5.670 1-Apr-11…
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 From To 1-Sep-12 31-Mar-13 66 49.56 1-Sep-12 31-Mar-13 66 44.10 Avg (propane)…
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