Annual and Special Meeting of Shareholders Calgary, Alberta Raymond Chan June 1, 2016 Chairman of the Board
Board of Directors Director Role/Committee(s) Raymond T. Chan Chairman of the Board James L. Bowzer President and Chief Executive Officer John A. Brussa Reserves, Nominating and Governance Edward Chwyl Lead Independent Director, Compensation, Reserves Naveen Dargan Audit, Compensation R.E.T. (Rusty) Goepel Nominating and Governance Gregory K. Melchin Audit, Nominating and Governance Mary Ellen Peters Audit, Compensation Dale O. Shwed Reserves 2
Officers Officer Position James L. Bowzer President and Chief Executive Officer Rodney D. Gray Chief Financial Officer Richard P. Ramsay Chief Operating Officer Geoffrey J. Darcy Senior Vice President, Marketing Brian G. Ector Senior Vice President, Capital Markets and Public Affairs Kendall D. Arthur Vice President, Lloydminster Business Unit Murray J. Desrosiers Vice President, General Counsel and Corporate Secretary Cameron A. Hercus Vice President, Corporate Development Ryan M. Johnson Vice President, Central Business Unit Chad L. Kalmakoff Vice President, Finance Gregory A. Sawchenko Vice President, Land Gregory M. Zimmerman Vice President, U.S. Business Unit 3
Agenda 1) Business of the Meeting a) Presentation of 2015 Annual Financial Statements b) Election of Directors c) Appointment of Auditors d) Advisory Vote on Executive Compensation e) Share Award Incentive Plan i) Unallocated Awards ii) Plan Amendments f) Reduction in Stated Capital 2) Corporate Presentation 3) Q&A Session 4
Annual and Special Meeting of Shareholders Calgary, Alberta James Bowzer June 1, 2016 President and Chief Executive Officer
Advisory Forward-Looking Statements In the interest of providing Baytex's shareholders and potential investors with information regarding Baytex, including management's assessment of Baytex's future plans and operations, certain statements made by the presenter and contained in these presentation materials (collectively, this "presentation") are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). The forward-looking statements contained in this presentation speak only as of the date of this presentation and are expressly qualified by this cautionary statement. The information contained in this presentation does not purport to be all-inclusive or to contain all information that potential investors may require. Specifically, this presentation contains forward-looking statements relating, but not limited, to: our business strategies, plans and objectives; our focus on per share growth in production, cash flow and reserves; our target to fund our capital program from internally generated funds from operations; our ability to mitigate the volatility in Western Canadian Select price differentials by transporting our crude oil to market using railways; our annual average production rate and capital budget for 2016; our plans to develop our three key resource plays (Eagle Ford, Peace River and Lloydminster), including the number of wells to be brought on production in the Eagle Ford in 2016; the proportion of our expenditures to be made in the Eagle Ford; our drilling plans in the Eagle Ford, Peace River and Lloydminster; the number of drilling rigs and frac crews working on our Eagle Ford lands in 2016; our plan to bring shut-in production back on line; our expectation that we will realize further improvements in capital efficiencies through cost reductions; our target for all-in capital efficiencies; the rate of return for an individual well in the Eagle Ford, Peace River and Lloydminster under various pricing assumptions for West Texas Intermediate light oil (“WTI”) and the oil price at which the wells break-even; our expectation that our development opportunities will provide attractive returns; for individual wells in the Eagle Ford, Peace River and Lloydminster, the cost to drill, complete and equip a well, initial production rates, liquids weighting, estimated ultimate recoveries (EUR) and single well economics (including internal rate of return, net present value, payout and capital efficiency); our Eagle Ford shale play, including the growth potential of the assets, initial production rates from new wells, our plans to use “stack and frac” pilots to target three zones in the Eagle Ford formation in addition to the overlying Austin Chalk formation, our assessment of the results of the “stack and frac” pilots, individual well economics, cumulative recoveries, drilling efficiency and the pricing benchmarks used for our liquids production; our Peace River heavy oil resource play, including years of drilling inventory remaining, reservoir characteristics, individual well economics for multi-lateral horizontal wells (including well design, drilling and completion costs, initial production rates, capital efficiency ratio, internal rate of return and estimated ultimate recoveries (EUR)); our Lloydminster heavy oil property, including years of drilling inventory remaining, the impact of drilling horizontal wells and individual well economics for horizontal wells (including drilling and completion costs, initial production rates, capital efficiency ratio internal rate of return and estimated ultimate recoveries (EUR) and our expectation that multi-lateral drilling will result in improvements in capital efficiencies); that we retain significant leverage to increases in crude oil prices, have a significant inventory of development projects and have strong levels of financial liquidity; and the sensitivity of our 2016 funds from operations to changes in WTI prices, heavy oil differentials, natural gas prices and Canada-United States foreign exchange rates. In addition, information and statements relating to reserves are deemed to be forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, that the reserves described exist in quantities predicted or estimated, and that the reserves can be profitably produced in the future. Although Baytex believes that the expectations and assumptions upon which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Baytex can give no assurance that they will prove to be correct. These forward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and pricing differentials between light, medium and heavy gravity crude oil; well production rates and reserve volumes; our ability to add production and reserves through our exploration and development activities; capital expenditure levels; our ability to borrow under our credit agreements; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; interest and foreign exchange rates; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; our ability to develop our crude oil and natural gas properties in the manner currently contemplated; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Baytex at the time of preparation, may prove to be incorrect. 6
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