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Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp

Peyto Exploration & Development Corp · Sep 1, 2010 · 55 slides

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Slides

  1. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 1
    Peters Peter s & Co. Co Energy Conference September 2010 TSX: PEY.UN www.Peyto.com Current Distribution: 0.12/month 10.2% Cash on Cash Yield 121,946,039 units outstanding [1.44/14.10 = 10.2% (Aug 30/10 closing)]
  2. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 2
    The Peyto Strategy 11 Y Year T Track kRRecord d Prospect Generation Reserves Growth NAV Growth Profit Sharing (BCFe) (NPV5 Debt Adj/Unit) 1999 2000 2001 1999 1999 2002 2000 2000 2003 2001 2004…
  3. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 3
    Compound Annual Total Return C L 0 10 20 30 40 50 60 70 80 Largest Calfrac Well Servicess Jan99 Osisko Mining Source: BMO Capital Markets Peyto Energy Trust First Quaantum Minerals Pacific Rubiales Energy…
  4. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 4
    Why Own Peyto Today All the same reasons as before All Organic Business Model Exploration and development Acquisitions for inventory Re-investment, geographic focus Need exit strategy Amass, promote, liquidate Invest, develop,…
  5. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 5
    Organic Business Model P d ti per U Production Unit it or Sh Share 40 00 40.00 /d per million) m distribution) 300 Record Production/unit Aug/05 of 241 boe/d/mm 35.00 250 30.00 Production per Unitt or Share (boe/…
  6. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 6
    Organic Business Model P t T Peytos Tax P l Pools 800 700 600 500 ons 400 Millio 300 200 100 - 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F UCC (25%) CEE (100%) CDE (30%) COGPE (10%)…
  7. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 7
    Organic Business Model G hi ll F Geographically dA Focused Assett B Base 240,000 net acres R10 R8 R6 R4 R2W6 R27 R25 R235 operated R21 gas plants R19 R17 R15 R13W5 T64 750 km pipelines T64 600+ producing wells C G F F…
  8. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 8
    Tight Gas Resource Plays H i t l MSF Pil Horizontal Pilott P j t Projects 8 10/18/2010
  9. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 9
    Tight Gas Resource Plays M lti l V Multiple Vertical ti l /H /Horizontal i t lTTargets t Sundance Area Reservoirs 12 9 10/18/2010
  10. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 10
    Cardium Resource Play H i Horizontal t l MSF Pil Pilott 1 C di Cardium Gas G Fairway F i Pilot Project 1 Sundance Cardium 4,000 sq miles up to 65 TCF Gas in Place1 2-3 TCF developed to date E Peyto Cardium Rights 400…
  11. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 11
    Cardium Resource Play C di Cardium T Type L Log and dRReserves Volumetric Reserves AREA(Ha)= 256 (1 section) 23m Gross thickness H(m)= 15 15m Net Pay (using POROSITY(%)= 9 6% porosity cutoff) SW(%)= 18 TEMP.(Deg.C)= 80…
  12. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 12
    Cardium Resource Play Pilot Project 1 Sundance Cardium R23 R22 R21 R20 R19W5 W FFUUF F A U F U F Peyto 13-18-55-24W5 L FU G CG F F G G C W F F C FF F F F F F D24 F U F U F F C F 24 G F 19 U F F W E 24 L G G G UV V…
  13. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 13
    Cardium Resource Play N Normalized li d CCardium di P Production d ti Vertical V ti l vs. H Horizontal i t l Average Vertical Last 10 years 10,000 Average Vertical Last 5 years 2-5 times i i i l rate initial Daily Gas…
  14. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 14
    Cardium Resource Play E Economic i CComparison i Vertical V ti l vs. H Horizontal i t l Ave Cardium Vertical last 5 yrs (00/132005522W5/0) 7,000 00/021505521W5/0 Cardium HZ (1329m) 00/082205521W5/0 Cardium HZ (1043m) 6,000…
  15. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 15
    Sundance Cardium Horizontals Undeveloped Opportunities Peyto 16-32-55-21W5 Peyto 8-22-55-21W5 Cardium Horizontal Cardium Horizontal On Production Aug 13/10 On Production Jan 7/10 T56 Peyto 2-15-55-21W5 Peyto 13.18-55-24W5 Cardium…
  16. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 16
    Cardium Horizontal Development P t ti l L Potential Locations ti R9 R7 R5 R3 R1W6 R26 R24 R22 R20 R18 R16W5 F CF F FFF G CE G JF G FC ED F AEF AF C F G FF FCF KKGF CIK CGFCF CF D CL GC G FGFA G E G G G G CG L GF CG ECF F GF…
  17. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 17
    Notikewin Resource Play H i Horizontal t l MSF Pil Pilott 2 Peyto Notikewin Mineral Rights 17 10/18/2010
  18. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 18
    Notikewin Resource Play T Type L 1 Log 1-20-54-22W5 20 54 22W5 28m Gross Pay Volumetric Reserves 19m Net Pay AREA(Ha)= 256 (1 section) H(m)= 19 23m Gross Pay POROSITY(%)= 8 16m Net Pay SW(%)= 35 TEMP.(Deg.C)= 96…
  19. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 19
    Notikewin Resource Play Pilot Project 2 Greater Sundance Notikewin R23 R22 R21 R20 R19W5 U WF DV F U U F G F F C F W G E Peyto Pine Ck 14-7-56-17W5 L GG FG IC F F FF FF F U F F C G UV F G F F FVU F F F UG F F G F FF F UF…
  20. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 20
    Notikewin Resource Play N Normalized li d NNotikewin tik i P Production d ti Vertical V ti l vs. H Horizontal i t l Average Vertical Notikewin 00/080305621W5/0 10,000 00/062705422W5/2 Notikewin HZ (943m) 00/101505422W5/0…
  21. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 21
    Notikewin Resource Play E Economic i CComparison i Vertical V ti l vs. H Horizontal i t l 10,000 Average Vertical Notikewin 00/0803056 Hi h Hz High H 21W5/0 / 00/101505422W5/0 Notikewin HZ (796m) 8,000 00/062705422W5/2…
  22. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 22
    Sundance Notikewin Horizontals Undeveloped Opportunities Peyto 6-27-54-22W5 Notikewin Horizontal On Production Jan 30/10 T56 YE 2009 Peyto HZ Ntkn Locations (29) Peyto 14-7-56-17W5 HZ Drilled (1 Gross, 1 Net) Notikewin…
  23. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 23
    Wilrich Resource Play H i Horizontal t l MSF Pil Pilott 3 Nosehill Project Area Peyto Wilrich Mineral Rights 23 10/18/2010
  24. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 24
    Wilrich Resource Play T Type L 7 Log 7-5-56-20W5 5 56 20W5 Volumetric Reserves AREA(Ha)= 256 (1 section) JET 2825 H(m)= 16 FRAC 23m Gross Pay (-1578.4) POROSITY(%)= 8 16m Net Pay SW(%)= 35 TEMP.(Deg.C)= 98 PRES.(kPa)=…
  25. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 25
    Wilrich Resource Play Pilot Project 3 Nosehill Wilrich R21 R20 R19W5 F G F U 29 28 27 F 26 25 30 29 F28 K 27 26 25 30 29 28 27 26 F F C Peyto 14-05-56-20W5 F G J I EE E F F G F F G G C E Wilrich Horizontal F F CG E…
  26. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 26
    Wilrich Resource Play N Normalized li d Wilrich Wil i h Production P d ti Vertical V ti l vs. H Horizontal i t l Average Wilrich Vertical 00/022605520W5/0 00/132505520W5/0 Wilrich HZ (1500m) / / ( ) 00/120505620W5/0 Wilrich…
  27. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 27
    Wilrich Resource Play E Economic i CComparison i Vertical V ti l vs. H Horizontal i t l Average Wilrich Vertical 00/022605520W5/0 9,000 00/132505520W5/0 Wilrich HZ (1500m) 00/120505620W5/0 Wilrich HZ (1334m) 00/140505620W5/0…
  28. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 28
    Wilrich Horizontal Development U d Undeveloped l dOOpportunities t iti Peyto 16-35-55-20W5 Wilrich Horizontal Peyto 13-25-55-20W5 Peyto 14-05-56-20W5 On Production Jul 3/10 Wilrich Horizontal R.22 Wilrich Horizontal R.21…
  29. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 29
    Other Resource Plays H i Horizontal t l MSF Pil Pilott 4 4,5 5 and d on 29 10/18/2010
  30. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 30
    Technical Challenges H i Horizontal t l MSF Di Directional ti l Drilling D illi Geo-steer down to Geo-Steering & Drilling Hazards avoid popping out of sand. Once out is difficult to get back down. drape Geo-steer down…
  31. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 31
    Logistical Issues S Summer vs. Wi Winter t Completions C l ti 31 10/18/2010
  32. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 32
    Why Own Peyto Today All the same reasons as before All Organic Business Model Exploration and development Acquisitions for inventory Re-investment, geographic focus Need exit strategy Amass, promote, liquidate Invest, develop,…
  33. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 33
    Low Cost Producer M i M Margins Matter tt 100% 90% 80% enue 70% Margin as % of Reve 74% Operating 60% Margin 50% 40% 30% 56% Profit Margin 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009…
  34. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 34
    Low Cost Producer Th New The N M Margins i (h(how tto make k 3 gas work) k) Total Peyto Revenue 84% Gas 16% Liquids TWP (new drilling) Peyto H2 2010 Unhedged Cardium Hztl Wilrich/Notikewin Hztl 4.20/GJ (Ave AECO daily)…
  35. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 35
    Low Cost Producer M i - Industry Margins I d t Comparison C i Q2 2010 80% 18 16 Q2 2010 Operating Costts (/boe) 70% Margin 60% 14 Q2 2010 Operating M 12 50% 10 40% 8 30% 6 20% 4 10% 2 0% 0 Operating…
  36. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 36
    Low Cost Producer P t IIndustry Peytos d t L Leading di O Op C Costs t 16 Costs (/boe) 13%/yr 14 12 10 Quarterly Operating C 8 6 4 1.6%/yr 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011…
  37. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 37
    Low Cost Producer L Low O Op Cost C t = Long L R Reserve Lif Life 2009 Year End Proven Producing Reserve Life 15 10 35 Years PDP 5 30 29 TP - 25 25 P+P 21 22 RLI ((yrs) 20 18 16 15 14 14 11 10 10 10…
  38. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 38
    Low Cost Producer D Deep G Gas Drilling D illi R Royalty lt IIncentives ti 3,500-4,000 m MD Trigger depth for Natural Gas Deep Drilling Program 2,200 m TVD reduced from 2,500m TVD to 2,000m TVD 3,700-4,000 m MD…
  39. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 39
    Low Cost Producer P t Full-Cycle Peytos F ll C l G Gas S Supply l CCostt 10 10 hedged Realiized Price (//mcfe) cfe) 8 41% 8 as Price (/GJ J) s Price (/mc Average Profit 6 6 /mcf Bonus Cnd Realized Gas O…
  40. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 40
    Low Cost Producer Wh Profitable Whos P fit bl Peyto Ave Profit 2002-2009 = 2.92/mcfe Ultra Pet. Ave Profit 2002-2009 = 2.79/mcfe 10 10 10 10 Price (/mcf) ce (/mcfe) 8 41% 8 8 8 Peyto Realized Gas Price (/mcfe)…
  41. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 41
    Why Own Peyto Today All the same reasons as before All Organic Business Model Exploration and development Acquisitions for inventory Re-investment, geographic focus Need exit strategy Amass, promote, liquidate Invest, develop,…
  42. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 42
    Horizontal Well Payout C t off Capital Cost C it l Ad Advantage t 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 00/13-35-055-20W5/0 00/12-34-055-20W5/2 Life (in months) Wilrich 00/16-35-055-20W5/0 % Paid Out 00/04-05-056-20W5/0…
  43. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 43
    The Peyto Strategy Hi hR High t Returns on C it l and Capital dE it Equity 60% 250 50% 41% 200 Ave ROE 40% 150 30% 21% Ave 100 ROCE 20% 50 10% 0% 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Return…
  44. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 44
    2010 Activity To Date Continue Active Development Pace Capital Expenditures (225-250 million before DRC) 50 net wells p projected j to YE 2010 ((29 drilled to date)) 80-85% are Horizontal MSF Plant expansion at Nosehill,…
  45. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 45
    2011 Outlook Evolving Corporate Structure Peyto Exploration Peyto Exploration Peyto Energy & Development & Development Trust Corp. Corp. 400 Growth + Growth E&P Growing Trust Optimized Profit Income E&P Sharing 350 300…
  46. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 46
    Appendix Quarterly Track Record Industry Comparisons Distribution History y Payout Ratio Gas Marketing Hedging Strategy Reserves data volumes, values 46 10/18/2010
  47. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 47
    Quarterly Track Record 2010 2009 2008 Q2 Q1 Total Q4 Q3 Q2 Q1 Total Q4 Q3 Operations Production Oil & NGLs (bbl/d) 3,465 3,330 3,028 3,222 2,916 2,950 3,022 3,265 3,207 3,199 Natural gas (mcf/d) 112,422 103,934 92,718 95,467 89,259…
  48. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 48
    Highest Quality Assets O Operating ti Costs, C t Netback, N tb k PProfit fit M Margin, i R Reserve Lif Life Q2 2010 Operating Costs Q2 2010 Netbacks 18 40 16 35 14 30 12 25 10 /boe /boe 20 8 15 6 4 10 2 5 -…
  49. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 49
    Most Profitable Business T t l Costs, Total C t Recycle R l RRatio, ti DD&A R Recycle, l L Leverage 2009 Low Cost Producer 2009 Recycle Ratio, Proven Producing +FDA PP (/boe) / Total Revenue (/boe) 3 140% 120% 100%…
  50. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 50
    Distribution History Monthly Distribution 0.20 0.15 0.10 0.05 0.00 Monthly Distribution 50 Historical Per Unit and Units Outstanding numbers have been adjusted to reflect the May 27, 2005 2:1 stock split…
  51. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 51
    Payout Ratio History Historical Payout Ratio Maximum Minimum 100% 91% 42% % Converted to a Trust 80% at 57% 60% 40% 20% 0% Quarter Cash Payout Ratio Total Payout Ratio Historical Per Unit and Units Outstanding…
  52. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 52
    Gas Marketing F t Future Sales S l Financial Hedges - Gas Pricing 2009 2010 2011 2012 0-Jan-00 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-09 31-Oct-09 5000 7.850…
  53. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 53
    Successful Hedging Strategy Peyto Realized Price History 2003 2004 2005 2006 2007 2008 2009 Peyto Peyto Peyto Peyto Peyto Peyto Peyto 16.00 7.51/mcf AECO Mo 7.38/mcf AECO Mo 8.78/mcf AECO Mo 8.46/mcf AECO Mo 8.42/mcf AECO…
  54. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 54
    Peytos Reserves V l Volumes Natural Gas Sales Gas Liquids & Oil Category (BCF) (Mstb) BOE's(Mstb) Proven Producing 497 15,801 98,573 Proven Non-Producing 15 374 2,913 Proven Undeveloped 242 7,116 47,372 Total Proven 753…
  55. Peters Peter s & Co Co Energy Conference – Peyto Exploration & Development Corp – slide 55
    Peytos Reserves N t Present Net P t Value V l Variable Price Economics NPV (millions of CDN dollars) Category 0% 5% 8% 10% Proven Producing 4,655 4 655 2,389 2 389 1,825 1 825 1,578 1 578 Proven Non-Producing 140 68 49…

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