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Peyto Exploration & Development Corp T.PEY

Alternate Symbol(s):  PEYUF

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

Comment by houbahopon Oct 11, 2019 7:15am
131 Views
Post# 30220856

RE:RE:RE:RE:Q3 Financial results estimate

RE:RE:RE:RE:Q3 Financial results estimate
I am a bit surprised by your implied desire to see increased capex.
Like TerribleEng has mentioned earlier, the value of a boe/d of a mix of 80% Natgas and 20% liquid is less than $ 7 000. Peyto's disburse $10 000 for it.

Since 15'Q3, Peyto has invested $1.52B in capex to keep production at current levels.
Peyto Enterprise value is $1.5B at current share price.

Can't you see Peyto's myopic approach has helped (yet not alone) bring share price at $2.50.
Peyto's Balance Sheet looks ugly. Treating debt like a no issue might not be a problem for the BOD, the CEO, the employees or the suppliers of material and service. but it is a huge one for shareholders. As long as Mr. Gee says the debt is not a problem and insiders sells in the gutter, fear will prevail among investors in the shares. But this is the plan and it is working pretty well.

The other strategy would have been to cut the capex program in half, reducing production to less than 50 000 boe/d, reduce debt to $600m and have $200m available for the NCIB. peyto would today be in a position of strenght to get back to full operation when the time is right.

Now is too late. the plane has hit the cliffs. ;)
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