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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 May 22, 2024 5:01pm
106 Views
Post# 36052814

RE:RE:RE:Finally! A day to buy!! EOM

RE:RE:RE:Finally! A day to buy!! EOM
stockmarket1 wrote:  You mean a change in Dividend from monthly to quarterly? Or reducing the payment amount but still stay monthly? Just curious. :)



MikeySwoosh wrote: AGM held after close. Does chairman Gray survive another year? Likely the reason for the price pressure today. A new chairman could certainly mean a change in dividend policy, which actually would be welcomed by many of us. Hard to argue against debt reduction over lofty dividends when Peyto has an average interest north of 7%. Anyway, we'll see what happens. 

Voting results from last year's AGM:
https://www.peyto.com/Files/News/2023/20230613DirectorPressRelease.pdf



I'm not sure what it would look like, but I think a base quarterly dividend of say $0.15 paired with a special dividend would be lot more fiscally responsible, much like Tourmaline does it. Some sort of commitment to pay down debt, not just an attitude of "if we happen to have FCF after the dividend we will will pay down debt". Commit say 75% of FCF to returning capital to shareholders via the dividend and NCIB (as many other O&G comapanies are doing) and the remaining 25% to debt repayment. If the cost of capital was cheap(er) or net debt was lower, the current dividend philosophy would much more easily be justified. The problem is that Peyto is fixated on this $0.11/month. It was clear that they were eager to reinstate it as soon as cash flows justified it coming out of the pandemic. Their DNA is that of an income trust as they were 15 years ago, and they're too stubborn to change it, much like their hedging practices (though that's fortunately turned out reasonably well over the course of time, and I think some sort of hedging is definitely prudent when your a price taker). Don Gray was founder, and I believe the CEO at the time they converted to an income trust, and has remained chairman ever since, so until he gets voted out, which many investors seem to want to make happen, "Peyto Energy Trust" will likely carry on, despite what seems best for shareholders as far as financial stewardship.
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