Peyto Exploration & Development Corp. · TSX:PEY
Peyto Exploration & Development — Shareholder Meeting (May 2022)
44 slides from Peyto Exploration & Development's shareholder meeting presentation, May 12, 2022
Slide 1: May 12, 2022
May 12, 2022
Slide 2: Advisory Regarding Forward-Looking Statements
Advisory Regarding Forward-Looking Statements PEYTO Exploration & Development Corp. “We are going to tell you about our vision of Peyto’s future today. We will also tell you where we think commodity prices are going to go. These are called forward looking statements. We are being truthful and using
Slide 3: Agenda
Agenda 2022 AGM PEYTO Exploration & Development Corp. 1. New to 2. Our Natural Peyto? Gas World 3. Our 2021 4. 2022 Results Outlook 5. Our Future 6. Q&A 3 5/12/2022
Slide 4: New To Peyto?
New To Peyto? Who We Are PEYTO Exploration & Development Corp. N 5th Largest Canadian Gas Producer ∼ 635 MMcfe/d N 10th Largest Canadian Gas Processor 970 MMcf/d capacity N Pure Play Alberta Deep Basin Multizone stacked resource, 5.4 TCFe 2P reserves N Long Reserve Life Asset 9yr PDP, 25yr 2P, sweet
Slide 5: Peyto is an Environmental Leader
PEY.TO Peyto is an Environmental Leader PEYTO Exploration & Development Corp. Notes: Intensities are based on total subsector emissions and relevant production amounts. They represent overall averages, not facility intensities. *Calculated on a barrel of oil equivalent (boe) basis by converting prod
Slide 6: We Heat Your Homes
PEY.TO We Heat Your Homes PEYTO Exploration & Development Corp. Natural Gas X X Safe Reliable Affordable 6 https://www.efficiencyalberta.ca 5/12/2022 http://www12.Statcan.gc.ca
Slide 7: Our Natural Gas World
Our Natural Gas World Zooming In On Peyto PEYTO Exploration & Development Corp. 7 5/12/2022
Slide 8: Global Natural Gas Markets
Global Natural Gas Markets 385 BCF/d Global Marketplace in 2019* (pre-Covid) PEYTO Exploration & Development Corp. Half of all 28% of Russia (CIS) world exports market 83 BCF/d 56 BCF/d Europe North America 27 BCF/d Export 23 BCF/d 109 BCF/d Supply 54 BCF/d 102 BCF/d Demand 31 BCF/d 7 BCF/d Export M
Slide 9: North American Natural Gas
North American Natural Gas Domestic and Export Markets PEYTO Exploration & Development Corp. LNG Canada 2 BCF/d 17 BCF/d Supply (2025) 11 BCF/d Demand Peyto 6 BCF/d Export (US) 95 BCF/d Supply 6 BCF/d Import (CND) 83 BCF/d Demand 18 BCF/d Export Europe needs 31 BCF/d of imports (27 BCF/d coming from
Slide 10: WCSB Natural Gas Market
WCSB Natural Gas Market Current Export Pathways PEYTO Exploration & Development Corp. AECO Gas Market 17 BCF/d Supply 9 BCF/d Demand 8 BCF/d Export (US) Peyto 1.5 1.0 Empress Emerson 2 2.0 1.0 2.5 Dawn Ventura 2.0 Henry Hub 10 Non-GAAP measures and ratios do not have any standardized meaning under I
Slide 11: Our Natural Gas World: Natural Gas Is Accelerating Our Clean Energy Future
Our Natural Gas World Zooming In On Peyto PEYTO Exploration & Development Corp. NATURAL GAS IS ACCELERATING OUR CLEAN ENERGY FUTURE. 11 5/12/2022
Slide 12: Natural Gas Is The Solution
Natural Gas Is The Solution USA Has Made the Biggest Reduction PEYTO Exploration & Development Corp. Absolute Change in CO2 Emissions from 2009-2019 (million tonnes of CO2) China India Indonesia Vietnam Saudi Arabia Iran Russian Federation And help Turkey these guys South Korea Canada get off coal!
Slide 13: The Energy Switch
The Energy Switch How Does Peyto Help? PEYTO Exploration & Development Corp. Good for the environment Need this to grow a lot! 13 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to
Slide 14: The Energy Transformation
The Energy Transformation How Can Peyto Help? PEYTO Exploration & Development Corp. Develop low cost, affordable natural gas Lower environmental impact of development Invest capital where we live Offer employment opportunities for Albertans Share our resources with the world 14 Non-GAAP me
Slide 15: The Peyto Strategy
The Peyto Strategy PEYTO Exploration & Development Corp. 15 5/12/2022
Slide 16: Year Growth Per Share
PEY.TO 21 Year Growth Per Share PEYTO Exploration & Development Corp. YoY +12% +5% +119% +53% Historical Per Share (or unit) and Shares (units) Outstanding numbers (end of period) have been adjusted to reflect the May 27, 2005 2:1 stock split BOE factor - 6 mcf = 1 bbl of oil equivalent 16 Non-GAAP
Slide 17: Continuously Improving Emissions
PEY.TO Continuously Improving Emissions PEYTO Exploration & Development Corp. Peyto GHG Emissions Intensity 29.0 26.0 24.7 23.9 22.3 21.1 19.8 19.6 19.3 2013 2014 2015 2016 2017 2018 2019 2020 2021E in GHG Emissions Intensity* KgCO2e/BOE (Scope 1,2,3) Peyto Flaring and Venting of Methane 9.3 8.3 8.2
Slide 18: Total Shareholder Return Model
PEY.TO Total Shareholder Return Model PEYTO Exploration & Development Corp. Organic growth for LNG exports? Future Prospects Past Profits BOE factor - 6 mcf = 1 bbl of oil equivalent 18 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable t
Slide 19: 2021 Results
Peyto’s 2021 Results PEYTO Exploration & Development Corp. 19 5/12/2022
Slide 20: 2021 Results: What we did
Peyto’s 2021 Results What we did… PEYTO Exploration & Development Corp. Sundance CRDM, U. FLHR, M. FLHR, ML. FLHR, NTKN & WLRC 2021 Capital Activity $365MM Total GSA Wells Drilled 95G/86N Wells Wild River CRDM 69G/65.5N Total Annual Production = 91,051 boe/d (Up 14% from 2020) Whitehorse Exit Produc
Slide 21: Cecilia Acquisition
Peyto’s 2021 Results Cecilia Acquisitions $35MM – Effective Jan 1/21 PEYTO Exploration & Development Corp. • YE21 Rates: • Base: 2,750 boe/d PEY Cecilia Gas Plant • New: 12,650 boe/d (20 new wells Original Throughput: online, 3 reactivations) 16mmcf/d sales and • Total: 15,400 boe/d (7,100 through 1
Slide 22: Production Performance by Vintage
Peyto’s 2021 Results Production Performance by Vintage PEYTO Exploration & Development Corp. Year Over Year Performance - All Cardium Year Over Year Performance - All Wilrich 5,000 11/29 Paid Out! 7,000 2/23 Paid Out! Gross Recombined Gas Rate (mcf/d) Gross Recombined Gas Rate (mcf/d) 6,000 4,000 +6
Slide 23: Best Year Ever
Peyto’s 2021 Results Best Year Ever PEYTO Exploration & Development Corp. 2021 Wells Sorted by Species Price Deck: 2021 Actuals + Feb 8, 2022 Strip 500% 450% 2021 Capital Program IRR = 121% Included $750k/well for FLS Feb 8 Gas WTI 400% Strip ($C/GJ) ($US/bbl) 2022 3.90 85 350% 2023 3.28 75 300% 202
Slide 24: PDP Reserve Additions
Peyto’s 2021 Results PDP Reserve Additions PEYTO Exploration & Development Corp. PDP Additions [mboe] / FD&A [$/mcfe] 2020YE 37,044 / 1.06 Evaluation 2021 YE 62,488 / 0.97 Evaluation % Change 69% / -8.5% http://www.peyto.com/Files/News/2022/2021ReservesPressRelease.pdf 24 Non-GAAP measures and ratio
Slide 25: Reserve Value (NPV5/share)
Peyto’s 2021 Results Reserve Value (NPV5 /share) PEYTO Exploration & Development Corp. http://www.peyto.com/Files/News/2022/2021ReservesPressRelease.pdf 25 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented b
Slide 26: Build it for less than we sell it
Peyto’s 2021 Results “Build it for less than we sell it” PEYTO Exploration & Development Corp. 2021 2014 2015 2016 2017 2018 2019 2020 2021 Land/Acq/Disp Seismic Drilling PDP FD&A $/mcfe ($2.25) ($1.64) ($1.44) ($1.36) ($1.18) ($1.55) ($1.06)($0.97) Compl. Wellsite Facilities Cash Costs $365MM $/mcf
Slide 27: 2022 Plans
Peyto’s 2022 Plans PEYTO Exploration & Development Corp. 27 5/12/2022
Slide 28: 2022 Outlook
Peyto’s 2022 Plans 2022 Outlook PEYTO Exploration & Development Corp. Drill ~90Hz Wells (Liquids Rich Natural Gas) vs 91 in 2021 Expand Infrastructure New Chambers Gas Plant (prepaid equipment) Increase Opportunities Expand Undeveloped Land Base Diversify Markets Continue to Evaluate New Pipe/Ba
Slide 29: Brazeau PrivateCo Addition and Area Growth
Peyto’s 2022 Plans Brazeau PrivateCo Addition and Area Growth PEYTO Exploration & Development Corp. PrivateCo Acquisition • $22 million, effective Jan 1, 2022 Chambers Development • 81.8 Gross (73.0 Net) 120,000 sections of land 100,000 New Plant Field Gas (mcf/d) (expands to 352 net 80,000 sections
Slide 30: Increased Facility Ownership And Control
Peyto’s 2022 Plans Increased Facility Ownership And Control PEYTO Exploration & Development Corp. Cutbank Peyto Gas Plants YE 2020 WI Kakwa 1 Oldman 125 mmcf/d 100% 2 Nosehill 125 mmcf/d 100% Cecilia Oldman (with Deep Cut) 3 Wildhay 90 mmcf/d 100% W & Oldman North 4 Galloway * 60 mmcf/d 89% shutin W
Slide 31: Extended Reach Horizontals
Peyto’s 2022 Plans Extended Reach Horizontals PEYTO Exploration & Development Corp. Peyto’s ERH program continues to yield great results including our latest and longest at 6070m MD and 3136m hz 31 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be
Slide 32: Updated Template Economics At Recent Strip
Peyto’s 2022 Plans Updated Template Economics At Recent Strip PEYTO Exploration & Development Corp. AECO WTI April 28 Strip $C/GJ $US/bbl 2022 6.54 96.41 2023 4.71 84.95 2024 3.64 76.68 Brazeau / Chambers Greater Sundance 2025 3.57 71.01 2026 3.82 67.16 Cardium Notikewin Wilrich ERH Notikewin Wilric
Slide 33: Lower Costs to Preserve Profit
Peyto’s 2022 Plans Lower Costs to Preserve Profit PEYTO Exploration & Development Corp. PEY 2014 PEY 2019 PEY 2021 PEY Goals 87% Gas @$3.43/GJ*1.15 HC 13% NGLs@$53/bbl 88% Gas @$4.00/GJ*1.15 $5.04 $2.23 $3.61 ∼$5.45 12% NGLs@$70/bbl=(70%of Revenue $4.52/mcfe $0.91/mcfe hedge loss $100 CND WTI) $/mcf
Slide 34: Future
Peyto’s Future PEYTO Exploration & Development Corp. 34 5/12/2022
Slide 35: Deep Basin Lands Go A Long Way
Peyto’s Future Deep Basin Lands Go A Long Way PEYTO Exploration & Development Corp. 1,000 Peyto Lands 900 800 700 Net Sections 600 Net Peyto Sections 500 400 300 200 100 - Net Sections of Cardium, Dunvegan, Notikewin, Falher, Wilrich, Bluesky, Cadomin, Montney & Duvernay Net Sections – Developed Are
Slide 36: Large Hz MSF Inventory
Peyto’s Future PEYTO Large Hz MSF Inventory Exploration & Development Corp. Done1 To Do Total Total Total Total Hz(Vt) Hz Locations Vertical Hz Locations Unbooked3 Wells Wells Booked2 2 (2) 440 200 460(9) 424 5 1 5 4 1 2 23 90 197 192 73 7 75 51 21 117 147 103 2 39 15 409 297 135 4 44 54 34 12 2 87
Slide 37: Steady Production Growth With Less Than CF
Peyto’s Future Steady Production Growth With Less Than CF PEYTO Exploration & Development Corp. $8 $7 $4.19 100,000 $17,500/boe/d $6.16 $6 $20,600/boe/d $17,300/boe/d $16,800/boe/d $15,100/boe/d $10,900/boe/d ∼$9,000/boe/d $5 $12,000/boe/d $3.48 AECO 7A ($/GJ) $11,600/boe/d 2012 WI BOED Capex $618MM
Slide 38: Rising Gas Prices?
Peyto’s Future Rising Gas Prices? PEYTO Exploration & Development Corp. Demand Driven Demand Driven Supply Driven Market Market Market ? 38 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities
Slide 39: The Future of Gas Prices
Peyto’s Future The Future of Gas Prices PEYTO Exploration & Development Corp. Will this “cliff” push fwd? 39 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the section entitled
Slide 40: Balance Sheet Priority
Peyto’s Future Balance Sheet Priority PEYTO Exploration & Development Corp. $2,000 $250 $1,800 $1,600 $200 Q4 2014, $173 $1,400 Total Net Debt ($MM) Quarterly FFO ($MM) $1,200 $150 $1,000 $800 $100 $600 $400 $50 $200 $0 $0 Q4 1999 Q2 2000 Q4 2000 Q2 2001 Q4 2001 Q2 2002 Q4 2002 Q2 2003 Q4 2003 Q2 20
Slide 41: Dividend Sustainability
Peyto’s Future Dividend Sustainability PEYTO Exploration & Development Corp. $3,000 $2,500 $2,000 Peyto Ctd. Earnings (MM$) $1,500 Q4/21 $1,000 $500 $0 Q4 1999 Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2
Slide 42: 2023 And Beyond: The Next Steps
2023 And Beyond The Next Steps PEYTO Exploration & Development Corp. 42 Non-GAAP measures and ratios do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the section entitled "Non-GAAP and Other Financial Measur
Slide 43: Questions?
Questions? PEYTO Exploration & Development Corp. 43 5/12/2022
Slide 44: Appendix: Energy Policy
Appendix: Energy Policy The Energy Triangle – Pick Two PEYTO Exploration & Development Corp. 1. Energy Security 3. Environmental Impact 2. Affordability 44 5/12/2022
Peyto Exploration & Development — Shareholder Meeting (May 2022) on 6ix