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Peyto Exploration & Development Corp T.PEY

Alternate Symbol(s):  PEYUF

Peyto Exploration & Development Corp. is a Canada-based oil and natural gas company. The Company conducts exploration, development and production activities in Canada. It is a Canadian energy company involved in the development and production of natural gas, oil and natural gas liquids in Alberta’s deep basin. The Company’s total Proved plus Probable reserves are 5.6 trillion cubic feet equivalent (929 million barrels of oil equivalent) as evaluated by its independent petroleum engineers. Its production’s weight is approximately 89 per cent to natural gas and 11 per cent to natural gas liquids.


TSX:PEY - Post by User

Comment by MikeySwooshon Nov 15, 2022 1:03am
224 Views
Post# 35098792

RE:RE:RE:RE:5 rigs

RE:RE:RE:RE:5 rigs
newcoin wrote:

Mr. Swoosh,
I am new to PEY so not familiar with the mechanics. What exactly do you mean by the company not being engineered to be a beta play for dividends or capital appreciation? Please explain, I really want to know what you're thinking.

 

MikeySwoosh wrote: I'm not trying to be a wet blanket, but just an FYI...Peyto has only been running four rigs since last week (before the Q3 report). They were operating rig 438 from Ensign as well prior to that. 

https://riggertalk.com/drilling_rigs.php

Search for Peyto or the Ensign rig directly.

Anyway, nothing to worry about if the budgeted 2023 exit production of 120K (organic) BOE/day is achieved. Let's just not lose sight of the fact that PEY is not engineered to be a beta play, so temperance is probably the best when it comes to expectations of oversized dividends (despite the most recent announcement) or capital appreciation. 
Newcoin, I was just suggesting that Peyto runs a much more conservative ship compared to a lot of their peers in the industry. They hedge a good portion of their production (more than most) and mostly stick to their knitting as far as what they do, and where they do it. They don't do anything transformational, as far as acquisitions or how they may spend their capital, which isn't inherently good or bad...but it's predictable, so they shouldn't (assuming valuation is fair) make outsized moves up or down relative to their peers. That's essentially what "beta" is. I own some BIR as well, which is entirely unhedged, so I would expect it to move more dramatically in either direction as commodity prices fluctuate. It's a higher beta stock. There's a lot more nuance to it than that though, so it's not as simple as suggesting or concluding that if gas prices stay elevated (and strengthen) over the next few years Peyto will inherently underperform its peers, or conversely, their SP will be less impacted by a drawdown in commodity prices, but those are the MORE LIKELY scenarios, again assuming the market is valuing them fairly in the current context. Either way, Peyto is an excellent operator, so as long as you're constructive on O&G in the coming years, I would own PEY, as it will at the very least allow you to sleep a little better at night. 
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