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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 PabloLafortuneon Sep 29, 2023 11:48am
162 Views
Post# 35661788

RE:RE:RE:Looks like

RE:RE:RE:Looks like Just to update my earlier narrative on natural gas, it was down today and now its right back up. This has been going on for a few days (finally). The story it seems is that production is now barely up over last year (0.5 to 1% vs 2% a couple months ago and even higher before that).

Initially it was pipeline maintenance aka "transitory" but now the question is, is it transitory or not. We know that much fewer new natgas wells are being added to production compared to a year ago. Now there are whispers of wells being shut in (none of this is evidence as I'm just repeating what someone posted on twitter who is probably repeating what someone else is saying, and so on...). 

Because if production is flat to declinining, Canadian imports are down, Mexico exports are up, LNG is up and demand naturally is up, then storage becomes irrelevant because its like having cash in the bank but spending way more than you have coming in - sooner or later, the bough is going to break.  (Only weather is the great unknown of course).

It wouldn't surprise me (purely amateur opinion, work of fiction really) if the well shut in story was partially true. If you're a natgas producer, unless you're fully hedged, you're looking at Q4 as basically a write off - you got $2.70ish in October, $2.95 in November and $3.35 in December for an average below $3.00.  Management must manage - they can't control pricing but surely they can stop doing the things that lose money.

My conclusion: the natgas price fireworks are about to start, weather permitting. IMO, prices are going to firm up significantly in the next 2 months. Please draw your own conclusions, do not rely on my amateur narrative. GLTA.
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