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BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp.

Baytex Energy Corp. · Jan 10, 2012 · 43 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. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 1
  2. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 2
    Summary Sustainable model: Dividend + organic oil growth within internally- generated cash flow Focus on dividend growth + per share growth in production, reserves and cash flow Sector-leading capital efficiency Technical…
  3. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 3
    Corporate History Baytex Energy Ltd. Publicly-traded E&P corporation from 1993-2003 One of only six independent E&P names from 1993 that are still traded on the TSX Heavy oil emphasis and infrastructure development began in 1997…
  4. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 4
    Share Ownership Breakdown Europe/Asia - Institutional 3% Insiders 3% Ownership Breakdown: Institutional 70% US - Retail 12% Retail 28% Insiders 3% Canada - Institutional 52% 100% Canada - Retail 16% Canada 68% U.S. 26%…
  5. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 5
    Operating Areas Product Mix (6:1) Company Total = 54,000 - 55,000 boe/d (Full Year Guidance 2012) Gas Light Oil 15% Heavy Oil 16% 69% Reserves by Product (Year End 2010) Gas 9% Light Oil Heavy Oil 18% 73%…
  6. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 6
    Management Team Officer Position Education Previous Experience Anthony W. Marino President & CEO P. Eng., CFA, MBA, COO (Baytex) B. Sc. Engineering Pres. & CEO (Dominion Canada) W. Derek Aylesworth CFO CA, B. Comm. VP (Encana) Marty…
  7. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 7
    Long Term Incentive Plan (LTIP) New LTIP approved by shareholders in conjunction with corporate conversion Replaced prior option-based plan from income trust era New LTIP is a full-value based plan with Restricted Shares and…
  8. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 8
    Historical Performance Distribution / Dividend History Payout Ratio - Before DRIP (%) Payout Ratio - Net of DRIP (%) Monthly Dividend (C) 120% 0.30 100% 0.25 Payout Ratio (Percent of FFO) Monthly Dividend (C) 80%…
  9. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 9
    Oil-Equivalent Production Growth R wth Gro AG 9% 50,000 8 %C 40,000 30,000 boe / d 54,500 50,000 44,341 20,000 40,239 41,382 34,022 34,647 34,292 36,222 10,000 0 (1) (2) 2004 2005 2006 2007 2008 2009 2010 2011…
  10. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 10
    Production / Capital Expenditures Full Year Full Year Guidance Guidance (2) (3) 2004 2005 2006 2007 2008 2009 2010 2011 2012 Production Light oil & NGL (bbl/d) 2,172 3,842 3,735 5,483 7,595 6,937 6,539 7,000 8,700 Heavy oil…
  11. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 11
    Capital Program Efficiency 3-Year 5-Year Average Average Trust Era 2008 2009 2010 2008-10 2006-10 2004-10 FD&A Cost (P + P) (1) Excluding FDC (C/boe) 13.11 11.63 5.90 9.54 9.59 9.00 Including FDC (C/boe) 16.06 21.00 13.17 15.92…
  12. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 12
    Per Share Metrics - For Comparison to Non-Dividend Paying Companies Debt and Dividend Adjusted CAGR 1-Year 3-Year 5-Year Trust Era Oil Reserves (bbl/share) 29% 17% 15% 15% Total Reserves (boe/share) 26% 14% 12% 14% Oil…
  13. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 13
    Reserve Growth / Contingent Resources Proved Probable 250 Oil-Equivalent Reserves (MMboe) 229 200 187 197 168 89 141 146 61 68 150 52 123 43 107 39 100 37 30 126 129 140 50 102 103 116 77 86 0 2003 2004 2005 2006 2007…
  14. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 14
    Oil Reserve Growth Heavy Oil Light Oil & NGL 250 th Oil & NGL Reserves (MMboe) R w Gro AG %C 19% 208 200 13 175 40 158 143 29 150 32 122 21 111 12 96 13 100 89 8 14 168 146 110 122 126 50 81 82 98 0 2003…
  15. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 15
    NPV of Reserves / Contingent Resource Net Present Value At December 31, 2010 (10%, pre-tax) - Blns Forecast prices and costs Proved + Reserves at December 31, 2010 Proved (1P) Probable (2P) (based on Sproule price forecast…
  16. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 16
    Long Range Plan - Construction Long Range Plan = Well-by-well economic model of Baytex Projects all PDP wells individually All organic development projects currently identified within existing land base, using existing…
  17. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 17
    Projected Production 100,000 90,000 80,000 70,000 60,000 BOED 50,000 40,000 30,000 20,000 10,000 0 2012 2013 2014 2015 2016 2017 Heavy Oil - Lloyd Heavy Oil - Seal Cold Heavy Oil - Seal Thermal Light…
  18. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 18
    Seal Heavy Oil Resource Play Seal Primary Development Land position - Crown Purchases 1999-2005 Seal Production - 67,000 acres (105 sections) of 100% land 20,000 5 Hz wells Q3/11 - Estimated original oil in place (OOIP) per…
  19. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 19
    Seal Multi-Lateral Cold Horizontal Total Number of Laterals Total (2) Wells Single Two Three Four Six/Seven Eight Eight Laterals 2004 2 2 --- --- --- --- --- --- 2 2005 4 4 --- --- --- --- --- --- 4 2006 2 2 --- --- --- --- ---…
  20. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 20
    Seal Thermal EOR Development Modular development - Readily executable 10-well module size - Traditional oil and gas area with strong services presence and infrastructure - CAPEX = 31 million Recovery per 10-well module (Baytex…
  21. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 21
    Seal Cliffdale Thermal EOR Pilot New development area - Seven miles east of Harmon Valley - Not planned for large-scale cold Pre-Steam Post-Steam development 500 - Oil viscosity four times higher than 450 Cycle 1 SOR = 2.7 BS/BO…
  22. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 22
    Seal Reserves Recognition Dec 31/05 Dec 31/06 Dec 31/07 Dec 31/08 Dec 31/09 Dec 31/10 Reserves (MMbbl) Total Proved 2.2 8.5 20.2 27.0 31.2 45.0 Proved plus Probable 4.0 13.0 28.7 39.2 54.7 83.9 Locations Assigned Reserves…
  23. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 23
    Lloydminster Heavy Oil 9 Months 2011 Production = 20,600 boe/d (42% of total Baytex volumes) Oil Gravity = 11 to 18 API YE 2010 Reserves (2P) = 85 mmboe (37% of total Baytex reserves) Reserve Life Index (2P) = 11.2 years Land…
  24. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 24
    Kerrobert SAGD Development Obtained as part of SW Saskatchewan acquisition in July 2009 Baytex redevelopment to date 3,500 Two wells on production - Drilled, completed and equipped 3 new well 3,000 August 2011 pairs and 2…
  25. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 25
    Profit Investment Ratio (PIR) 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x S. AB. Plains Belly River - Vt Non-core Haynesville - Hz Pine Creek Cardium - Hz Core Haynesville - Hz Niton Rock Creek - Hz Shallow Gas Multi-Zone - Vt…
  26. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 26
    Heavy Oil Differential Summer (high demand) season (Apr Sep) Winter (low demand) season (Oct Mar) 60 50 Lloyd Blend Differential (% of WTI Price) 40 30 20 2012 Hedges 10 0 2005 2006 2007 2008 2009 2010 2011…
  27. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 27
    Midstream Heavy Oil Fundamentals Infrastructure Development Market Reach Circa 2000 Pacific 2015 - 2020 Cushing 2006 - 2011 USGC 2006 - 2013 Source: Canadian Association of Petroleum Producers Crude Oil Forecast,…
  28. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 28
    Downstream Heavy Oil Fundamentals Mid-Continent Refining Margins Maya Coking (USGC) Brent Crking 50 Bonny Lt Crking WTI Cracking Forcados Cracking 40 Basrah Cracking Refining Margin (US/bbl) Arab Lt. Cracking 30 Arab Hvy…
  29. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 29
    Light Oil Projects Light Oil Resource Plays Viking Bakken / Three Forks 30
  30. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 30
    Light Oil Resource Potential Contingent Resource (2) Estimated (millions of barrels of oil) Initial Rate (1) Recovery (1) Well Cost (1) Potential Net Low (C1) Best (C2) High (C3) (Boe/d / well) (Mboe/well) (Mln/well) Locations (1)…
  31. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 31
    Bakken / Three Forks Type Log Lodgepole Scallion Upper Bakken Shale Middle Bakken Future Middle Bakken Target Bakken Lower Bakken Shale B1 Current Three Forks Target B2 B3 Three Forks Potential Future Target in…
  32. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 32
    Viking Light Oil Development Redwater, Alberta Viking Production (boe/d) - 93% of current Viking production 1,400 - Unfracd multi-lateral wells (up to 8 1,200 laterals per quarter section) 1,000 - 27 net prospective sections…
  33. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 33
    Bakken/Three Forks Impact of Learning Curve 100 1280-Acre (2 Mile-Long) 2009-2011: IP = 435 bbl/d, EUR = 440 mboe 1280-Acre (2 Mile-Long) 2004-2008: IP = 190 bbl/d, EUR = 150 mboe Before Tax ROR (%) 80 640-Acre (1 Mile-Long)…
  34. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 34
    Oil Hedge Coverage 2012 2013 2014 WTI Crude Oil % of Crude Oil Volumes Hedged (1) Fixed Price 2012 average: US95.73/bbl 29% 0% 0% (2) Costless Collars Floor-Ceiling: 2012: US97.50/bbl - US105.92/bbl) 3% 0% 0% 32% 0% 0% Heavy…
  35. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 35
    Interest Rate Hedge Positions Interest Rate (for Series A Sr Unsecured Debentures) Hedged Amount (C million) 150 Swap Type Receive-Fixed Floating Rate 3-month BA + 787.5 bps Fixed Rate 915 bps Term of Contract Oct 2009 - Sept…
  36. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 36
    Balance Sheet Improvement 3.0 Debt / FFO 2.0 3.0 1.0 1.9 1.3 1.6 1.4 1.2 1.1 0.0 4 5 6 7 8 9 0 /0 /0 /0 /0 /0 /0 /1 31 31 31 31 31 31 31 c…
  37. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 37
    Credit Metrics Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Sept 30 2004 2005 2006 2007 2008 2009 2010 2011 Credit Facility (C Millions) Approved credit facility 250 250 300 370 485 515 550 700 Bank line undrawn 89 127 173 128…
  38. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 38
    2011E Funds From Operations (C Millions) Strip Q4/11 Heavy Oil Differential (% of WTI) 10% 15% 20% 80 538 526 515 Q4/11 WTI 90 554 542 529 (US/bbl) 100 571 558 543 2011 Funds From Operations using November 8, 2011 strip = C553…
  39. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 39
    2012E Debt to Funds From Operations Heavy Oil Differential (% of WTI) 10% 15% 20% Strip 90 1.0x 1.1x 1.4x WTI 100Strip 0.7x 0.8x 0.9x 1.0x (US/bbl) 110 0.5x 0.7x 0.8x Total debt to Funds From Operations using November 29,…
  40. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 40
    Tax Treatment of Dividends Tax Treatment of Dividends US Recipients Canadian Is dividend taxable Is Foreign Tax Is refund available Type of Recipient withholding tax to recipient in Credit available for for excess Cdn w/h rate…
  41. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 41
    Tax Treatment of Dividends European Corporate Recipients Canadian Is dividend taxable Is Foreign Tax Is refund available If recipient is tax Country of withholding to recipient in Credit available for excess Cdn exempt, is w/h tax…
  42. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 42
    Total Return Performance Baytex Energy S&P/TSX Oil & Gas E & P Index S&P/TSX Capped Energy Trust Index S&P/TSX Composite Index S&P 500 1400 1200 1000 800 600 400 200 0 Jul-04 Jul-05 Jul-06 Jul-07…
  43. BMO Capital Markets Unconventional Resource Conference – Baytex Energy Corp. – slide 43
    Contact Information Anthony W. Marino President and CEO Baytex W. Derek Aylesworth Chief Financial Officer (587) 952-3100 (587) 952-3120 Baytex Brian Ector Baytex Vice President, Investor Relations (587) 952-3237 Baytex…

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