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JUNE PRESENTATION – Baytex Energy Corp.

Baytex Energy Corp. · Jun 10, 2013 · 49 slides

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Slides

  1. JUNE PRESENTATION – Baytex Energy Corp. – slide 1
    June Presentation
  2. JUNE PRESENTATION – Baytex Energy Corp. – slide 2
    Investment Highlights Focus on per share growth in production and reserves Organic Oil Growth Long-term, Low-Cost Inventory Sector-leading capital efficiency Operational excellence Meaningful Dividend Focus on dividend growth…
  3. JUNE PRESENTATION – Baytex Energy Corp. – slide 3
    Corporate Profile Summary of Securities Trading Symbol TSX / NYSE: BTE Average Daily Volume (1) Canada: 755,700 / U.S.: 229,300 Shares Outstanding (Current) 123.2 million Market Capitalization / Enterprise Value 4.8 billion / 5.5…
  4. JUNE PRESENTATION – Baytex Energy Corp. – slide 4
    Operating Areas 7
  5. JUNE PRESENTATION – Baytex Energy Corp. – slide 5
    Corporate Growth Strategy Exploit existing oil assets at Peace River (multi-lateral wells), Lloydminster (growing use of horizontal wells) and North Dakota (Bakken-Three Forks development) Near Term (1-2 years) Cold Development…
  6. JUNE PRESENTATION – Baytex Energy Corp. – slide 6
    Oil-Equivalent Production Growth (1) Percent Oil 73% 71% 73% 76% 77% 76% 79% 84% 87% 89% (1) Based on mid-point of guidance range of 56,000 58,000 boe/d. Gas converted to oil-equivalent at 6 mcf: 1 boe. 9
  7. JUNE PRESENTATION – Baytex Energy Corp. – slide 7
    Reserve Growth / Contingent Resources 292 229 252 187 197 168 141 146 107 123 2P RLI (years) 8.0 9.5 10.1 11.5 11.7 12.2 12.6 13.9 13.0 14.5 Oil Weighting 83% 78% 79% 83% 85% 84% 89% 91% 92% 93% Low (C1) 622 MMboe…
  8. JUNE PRESENTATION – Baytex Energy Corp. – slide 8
    Balance Sheet Strength ( millions) Q1 2013 Credit Facilities Unused Used Bank Loan (1) 156 Long-Term Debt (2) 452 Working Capital Deficiency 78 Undrawn 544 million, or 78%(1) Total Monetary Debt 686 Debt to EBITDA (3) 0.9x…
  9. JUNE PRESENTATION – Baytex Energy Corp. – slide 9
    Heavy Oil Differential WCS and Maya 20 WCS - WTI Maya - WTI 10 PIRA Energy Group Forecast (May 2013) 0 (10) US/bbl (20) Transportation bottlenecks led to (30) inland crude price discounts relative to waterborn…
  10. JUNE PRESENTATION – Baytex Energy Corp. – slide 10
    Marketing Transportation Options Trucking Flexibility Rail a Key Component of Market Access - Optimizes value of production - Initially expected rail to comprise 10% of our sales portfolio - Helps mitigate downstream upsets - Has…
  11. JUNE PRESENTATION – Baytex Energy Corp. – slide 11
    2013 Oil Marketing Portfolio Heavy Oil Sales Portfolio WTI Hedging Q2 / 2013 % Hedged 49% Fixed Price US98.40/bbl Q3 / 2013 % Hedged 42% Fixed Price US97.87/bbl Q4 / 2013 % Hedged 37% Fixed Price US97.40/bbl Percentage…
  12. JUNE PRESENTATION – Baytex Energy Corp. – slide 12
    Heavy Oil Hedge Coverage Q2/2013 Q3/2013 Q4/2013 FY 2014 Fixed Physical Delivery (Pipeline) Blended WCS (bbl/d) 8,833 9,500 9,500 2,000 Equivalent Heavy Production (bbl/d) 6,802 7,315 7,315 1,540 % of Gross Heavy Production 16% 16%…
  13. JUNE PRESENTATION – Baytex Energy Corp. – slide 13
    Key Projects Overview 16
  14. JUNE PRESENTATION – Baytex Energy Corp. – slide 14
    Peace River Oil Sands 306 net sections of oil sands leases 551 million barrels of economic contingent resource * Primary Development Production (Q1/13) 18,400 bbl/d 2P Reserves (YE12) 64 mmbbls Project Inventory(1) 238 net…
  15. JUNE PRESENTATION – Baytex Energy Corp. – slide 15
    Peace River Multi-Lateral Cold Horizontal Primary (Cold) Development (1) Well Design 8-10 laterals Completed Well Cost 2.6-3.4 MM Production (30-day IP) 300-700 bbl/d EUR 275-550 mbbl Capital Efficiency 5,000-9,000 per bbl/d…
  16. JUNE PRESENTATION – Baytex Energy Corp. – slide 16
    Peace River Production Performance Production Performance (1) 600 500 400 Bbl/d 300 200 2010 (13 wells) 100 2011 (17 wells) 2012 (20 wells) 2011 (23 wells, including 6 high productivity) 0 0 3 6 9 12 Month…
  17. JUNE PRESENTATION – Baytex Energy Corp. – slide 17
    Peace River Cliffdale Thermal EOR Development Recovery per 15-well Module (Baytex estimates based on Cliffdale pilot) - CAPEX = 55 million - Recovery factor 30% based on numerical reservoir simulation - Oil rate = 2,000 bbl/d…
  18. JUNE PRESENTATION – Baytex Energy Corp. – slide 18
    Peace River - Cliffdale Development Operation of first commercial 10-well module commenced in December 2011 Construction of 15-well module commenced in Q1/13 with drilling expected to begin mid- year 10-Well Module Q1/13…
  19. JUNE PRESENTATION – Baytex Energy Corp. – slide 19
    Cliffdale 1 Cycle Progression 30,000 Steam Volume = 61,100 BW Cumulative Oil Production for Each Cycle SOR = 2.1 Peak Weekly Rate = 336 bbl/d 25,000 20,000 Steam Volume = 26,100 BW Cycle SOR = 1.8 Cycle (bbls) Peak…
  20. JUNE PRESENTATION – Baytex Energy Corp. – slide 20
    Peace River Oil Sands Low Environmental Impact Baytex Cliffdale Thermal Project Non-Mining Oil Sands Development 23
  21. JUNE PRESENTATION – Baytex Energy Corp. – slide 21
    Lloydminster Lloydminster Heavy Oil Heavy Oil 730 net sections; 217 million barrels of economic contingent resource * Area Statistics Production (Q1/13) 18,600 bbl/d 2P Reserves (YE12) 116 mmbbls Oil Gravity 11 to 18 API…
  22. JUNE PRESENTATION – Baytex Energy Corp. – slide 22
    Lloydminster Development Vertical Wells Completed Well Cost 450,000 Production (30-day IP) 30-50 bbl/d EUR 30-50 mbbl Project Inventory (1) 200 net locations Capital Efficiency 11,250 per bbl/d Development Cost 11.25/bbl…
  23. JUNE PRESENTATION – Baytex Energy Corp. – slide 23
    Bakken / Three Forks Development 126 net sections; 27 million barrels of economic contingent resource * SASKATCHEWAN Bakken-Three Forks Baytex Lands Production (Q1/13) 2,800 bbl/d 2P Reserves (YE12) 34 mmbbl NORTH DAKOTA…
  24. JUNE PRESENTATION – Baytex Energy Corp. – slide 24
    Bakken / Three Forks Development Current development predominantly in the Three Forks formation Additional potential to develop Middle Bakken Evolution of frac staging: initially 6 stages/well 20 stages/well in 2011 30+…
  25. JUNE PRESENTATION – Baytex Energy Corp. – slide 25
    North America Resource Play Comparables Half Cycle Payouts The above chart represents the Top North American Resource Plays as ranked by Peters & Co., as at January 2013. Commodity assumptions: 2013: WTI oil US97.11/bbl, NYMEX gas…
  26. JUNE PRESENTATION – Baytex Energy Corp. – slide 26
    North America Resource Play Comparables Rate of Return The above chart represents the Top North American Resource Plays as ranked by Peters & Co., as at January 2013. Commodity assumptions: 2013: WTI oil US97.11/bbl, NYMEX gas…
  27. JUNE PRESENTATION – Baytex Energy Corp. – slide 27
    Corporate Growth Strategy
  28. JUNE PRESENTATION – Baytex Energy Corp. – slide 28
    2013 Operating Plans Targeting 8% Oil Growth Conventional Development 2013 Capital Budget and Wells Drilled - 430 million for conventional development Target production of 56,000 to 58,000 boe/d. Amount Wells Drilled ( millions)…
  29. JUNE PRESENTATION – Baytex Energy Corp. – slide 29
    Corporate Growth Strategy Long Range Plan Production (boe/d) Drilling Plan: 2013 - 2017 (total of net wells) Peace River Region: 8% CAGR - Oil Multi-lateral wells (8-10 laterals) 238 6% CAGR Boe Thermal (CSS) 110 Lloydminster…
  30. JUNE PRESENTATION – Baytex Energy Corp. – slide 30
    Why Invest in Baytex Superior Asset Base Income Payout Proven Track Record - Low cost development - Committed to paying a - Best-in-class balance sheet inventory oil focus meaningful dividend - Sophisticated risk - Sector leading…
  31. JUNE PRESENTATION – Baytex Energy Corp. – slide 31
    Supplementary Information - Oil Projects 34
  32. JUNE PRESENTATION – Baytex Energy Corp. – slide 32
    Cold Lake SAGD Acquisition 120 million purchase closed COLD LAKE / ARDMORE October 2, 2012 SUGDEN 100% W.I. in approximately 46 sections of oil sands leases Regulatory approval received for a LINDBERGH commercial SAGD…
  33. JUNE PRESENTATION – Baytex Energy Corp. – slide 33
    Cold Lake SAGD Reservoir Characteristics GP Channel - Viscosity: 40,000 - 120,000 c.p. - Porosity: 36% - Depth: 375 metres - Permeability: 3 darcies - Channel Thickness: 30 metres - Bitumen Saturation: 80% - Average Clean Net…
  34. JUNE PRESENTATION – Baytex Energy Corp. – slide 34
    Supplementary Information - Financial 37
  35. JUNE PRESENTATION – Baytex Energy Corp. – slide 35
    Share Ownership Breakdown Ownership Breakdown Institutional 77% Retail 21% Europe/Asia - Institutional 5% Insiders 2% Insiders 2% US - Retail 5% 100% Canada 74% US - Institutional 14% Canada - Institutional 58% U.S. 19%…
  36. JUNE PRESENTATION – Baytex Energy Corp. – slide 36
    2013E Funds from Operations (C mm) and Debt to FFO Heavy Oil Differential (% of WTI) 18% 23% 28% WTI (US/bbl) 80 515 (1.5x) 489 (1.7x) 464 (1.8x) 90 563 (1.3x) 534 (1.4x) 505 (1.5x) 100 611 (1.1x) 579 (1.3x) 548 (1.4x)…
  37. JUNE PRESENTATION – Baytex Energy Corp. – slide 37
    2013E Funds from Operations Sensitivities Funds from Operations Impact (C Millions) With Current Without Hedges Hedges WTI +/- US1.00/bbl 11.9 14.8 Natural Gas +/- C0.25/mcf 3.0 3.3 Heavy Oil Differential +/- 1% 10.6 15.2…
  38. JUNE PRESENTATION – Baytex Energy Corp. – slide 38
    Other Commodities / FOREX Hedge Coverage Q2/2013 Q3/2013 Q4/2013 FY 2014 Natural Gas % of Volumes Hedged at Fixed Price (1)(2) 24% 24% 24% 6% Average Fixed Price (US/mmBtu) 3.92 3.94 3.89 4.45 % of Volumes Hedged Using Collars (1) 28%…
  39. JUNE PRESENTATION – Baytex Energy Corp. – slide 39
    Distribution / Dividend History Payout Ratio - Net of DRIP (% ) Monthly Dividend (C) Payout Ratio - Before DRIP (% ) 120% 0.30 100% 0.25 Payout Ratio (Percent of FFO) Monthly Dividend (C) 80% 0.20 60% 0.15 40% 0.10…
  40. JUNE PRESENTATION – Baytex Energy Corp. – slide 40
    Capital Program Efficiency 3-Year 5-Year Average Average 2010 2011 2012 2010-12 2008-12 FD&A Cost (P + P) (1) Excluding FDC (C/boe) 5.90 12.46 4.19 7.05 8.60 Including FDC (C/boe) 13.17 18.57 11.61 14.06 15.22 Recycle Ratio (P…
  41. JUNE PRESENTATION – Baytex Energy Corp. – slide 41
    Per Share Metrics For Comparison to Non-Dividend Paying Companies Debt and Dividend Adjusted CAGR 1-Year 3-Year 5-Year Long-Term Oil Reserves (bbl/share) 14% 17% 15% 15% Total Reserves (boe/share) 12% 16% 13% 13% Oil Production…
  42. JUNE PRESENTATION – Baytex Energy Corp. – slide 42
    Appendix: Heavy Oil Pricing 45
  43. JUNE PRESENTATION – Baytex Energy Corp. – slide 43
    Midstream Heavy Oil Fundamentals Infrastructure Development Source: Canadian Association of Petroleum Producers Crude Oil Forecast, Markets and Pipelines Report, June 2012. 46
  44. JUNE PRESENTATION – Baytex Energy Corp. – slide 44
    Midstream Heavy Oil Fundamentals Near-Term Pipeline Projects: Enbridge Mainline 1. Toledo (Line 17) Partial Twin: 80,000 bbl/d Early-2013 2. Line 9 Reversal: 240,000 bbl/d Early-2014 3. Line 5 Expansion: 50,000 bbl/d Early-2013 4.…
  45. JUNE PRESENTATION – Baytex Energy Corp. – slide 45
    Midstream Heavy Oil Fundamentals Near-Term Pipeline Projects: Seaway and Flanagan South Source: Enbridge 48
  46. JUNE PRESENTATION – Baytex Energy Corp. – slide 46
    Midstream Heavy Oil Fundamentals Crude Oil Rail Exports North Dakota Western Canada 600 J.P. Morgan YE13 Estimate 500 (400 mbbl/d load capacity) 400 YE13 Estimate based Mbbl/d on North Dakota experience (300 mbbl/d load…
  47. JUNE PRESENTATION – Baytex Energy Corp. – slide 47
    WCSB Heavy Oil Production / Potential Midstream Capacity 4,000 3,500 Heavy Oil to Market (mbbls/day) TransMtn Expansion (mid-2017) - 450kbd 3,000 Blended Heavy Production Forecasts Keystone XL (mid-2015) - 400kbd (PIRA /…
  48. JUNE PRESENTATION – Baytex Energy Corp. – slide 48
    US Gulf Coast Heavy US Gulf Coast Heavy Oil Demand Oil Demand U.S. imports of Canadian heavy oil Total U.S. heavy oil imports fell to 3.6 rose to 1.59 million bbl/d in February million bbl/d in February 2013 on 2013 (increase of…
  49. JUNE PRESENTATION – Baytex Energy Corp. – slide 49
    Portfolio Management of Differentials Canadian heavy oil differentials: market developments and outlook WCS volatility has been caused by a combination of factors: 250,000 +/- bbl/d drop in US Midwest refinery runs in Oct-Nov 2012…

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