RE:RE:RE:RE:RE:Expectations for end of 2nd quarter??You are correct and if you calculate the debt to EBITDA numbers under the the "pay down debt" scenario versus the "grow production/CF" scenario, the net debt/EBITDA result is almost identical. I wonder if many investors have calculated this?
The benefit of the "grow production/CF" scenario is that their cost efficiency per mcf improves dramatically. Cash costs (excluding royalties) should decrease by 0.17/mcf in 2022 compared to 2020. Full plants means peak efficiency. Also, the new ~15,000 boe/d production is earning positive returns for the company.
The writing is on the wall. Peyto will generate large FCF this year and in 2022/2023. Maintenance capital is only around $200 million this year.
Ozhoks wrote: If debt would have been an issue, how come peyto valuation become 1/6 till the bottom, and then how it soared 6x with the same debt of 1b+$?? Instead, thanks to debt that frightened some investors and created fortune for others.
As long as business principles are valid, no need to concern debt repayment at tough environmental conditions.
So we may see another 6x increase of valuation.. by increasing the debt, not paying it down at all. I would run away from a company who is trying to pay down its debt, rather than borrowing more for growth. Peyto should stop talking about its debt imho.
If environmental conditions (ng price and futures, market access etc) keep as usual, expect steady increase of sp, including the end of q2 and beyond.
If Peyto focuses on loyal investors again besides business, I expect accelerated gains in short term. Hope to see environmentalist drilling growth much more than planned for this year.