Peyto Exploration & Development Corp T.PEY

Alternate Symbol(s): PEYUF

Energy Oil & Gas E&P

Peyto Exploration & Development Corp. 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 Alberta Deep Basin is a geologic setting situated on the northeastern front of the Rocky Mountain belt in the deepest part of the Alberta sedimentary basin. It acquired Repsol Canada Energy Partnership (Repsol Assets), which included around 23,000 barrels of oil equivalent per day of low-decline production and 455,000 net acres of mineral land. The acquisition includes five operated natural gas plants with combined net natural gas processing capacity of around 400 million cubic feet per day, 2,200 kilometers (km) of operated pipelines, and a 12 MW cogeneration power plant. These assets include Edson Gas Plant and the Central Foothills Gas Gathering System. The Company has a total proved plus probable reserves of approximately 7.8 trillion cubic feet equivalent (1.3 billion barrels of oil equivalent).

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Peyto Exploration & Development Corp

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Comment by boarderex86on Jan 09, 2018 11:42pm

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Post# 27319991

RE:RE:RE:RE:RE:RE:RE:RE:RE:LNG pipeline

Yes, right now Im sure they wish they could send gas to Dawn for 70-odd cents but they had to sign 10 YEAR contracts to get that price. That said, this is only one contract that they passed on. I dont know what the timeline will be but demand for natural gas is growing and current prices are below the marginal cost of supply. Low prices will only stimulate more demand. This means prices must go up. Personally I would like Peyto to cut back spending and stop growing production YoY. This will lead to lower decline rates and provides flexibility for debt repayment and dividend. I just dont see drilling as a prudent allocation of capital right now. In fact, I wouldnt mind a dividend cut if growth plans were also cut. This would at least position them for more aggressive growth when prices return to normal.

Chris_toronto wrote: Interesting info Boarderex but you got to admit that even Peyto itself wishes now that they signed on to those contracts. The problem for Peyto will be this summer (and in following years) when they probably won't be able to sell much of their production. That's their only line of business. If they can't sell gas what are they in business for? How will they pay their own bills? (let alone any of their shareholders dividends).

It's the middle of a cold winter and aeco is between $1.50 - $1.90. What do you think it will be at in 3 to 4 months? How do you see Peyto operating in coming years if situation persist since hedging at a profit is no longer an option? Others can continue to operate because they have access to outside markets, Peyto doesn't. Simple but very serious dilemma.

boarderex86 wrote: ... In short, there is no major issue with export pipelines but reaching distant markets can be costly. Those small number of producers who signed up for the long term contracts to Dawn hub basically got a discount on their toll in exchange for committing to 10 year contracts. In this moment, Ceremony is enjoying the opportunity to highlight that low cost service into dawn probably looks attractive right now but they are literally 2 months into a 10 year contract. Only time will tell if that would have been a good deal or not over the course of the next decade.