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).

TSX:PEY - Post by User

Peyto Exploration & Development Corp

Bullboard Posts

Comment by ceremonyon Jul 05, 2018 8:22pm

56 Views

Post# 28275554

RE:RE:congrats unless nat gas prices rise

Well Mr Deloitte's WAG is probably as good as anybody elses. Please don't tell me you are basing investment decisions on "according to Deloitte?" lol

EquityInvest wrote: Ceremony, its a good thing that the forecast for natural gas prices is quite positive. We should see Peyto's sp rise with it:

"Alberta’s AECO natural gas benchmark is estimated to average about C$1.70 per thousand cubic feet this year and climb 18 percent to C$2 next year, according to Deloitte. The price is seen advancing to C$3.20 in 2023, an 88 percent gain from this year."

https://www.oilandgas360.com/canadian-oil-prices-set-to-climb/

ceremony wrote: you own a Corporate Bond of perhaps questionable quality.

and corporate bonds can go down in price for a couple reasons.
business conditions worsen...
or interest rates go UP.

yes the share price of peyto, because it resembles a corporate bond
sooo much, could FALL if interest rates RISE.

and because peyto hedges so much, even if nat gas prices
rise they may not see much benefit from it.

all because they want to protect the dividend.

why is this like a corporate bond now?

let's take a look at the new presentation's 5 year outlook, shall we.

in 2017 peyto earned $178m.
in 2022 management at peyto thinks they will earn $179m.
that seems like not a lot of PROGRESS in 5 years.

capital investments starting next year are expected to FLAT as a pancake.
Dividends, or your coupon, are expected to be UNCHANGED for the forseeable
future. that is not THAT exciting to me!

here is something interesting. According to peyto management, after chopping
the payout almost 50%, they still do NOT
expect to pay their dividend out of EARNINGS in 2019 and 2020. iow, the amount
they pay out to shareholders will EXCEED the earnings of the company.

debt is coming down, but only reluctantly and SLOWLY, and is still projected to be
over $1b in 2022. iow not that much different than today.

I look at the peyto 5 year plan and I see a company stuck in neutral.

the share price is low, and also seems to be stuck in neutral.
the YIELD on the stock is comprable to a BOND.

this boring stock seems to act more like a bond, which don't move around very much.

and that takes me back to my original idea (I love to bring this board fresh new original
ideas that you CAN"T get anywhere else)

and that is...

congrats. you now own a corporate bond.