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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

Post by TerribleEngon Sep 17, 2021 3:18pm
254 Views
Post# 33878879

Not sure how commonly this is understood.

Not sure how commonly this is understood.This summer the BC summer supreme court ruled that the province violated the treaty rights of the Blueberry River First Nation by allowing Forestry and Natural gas on it's land without consultation (on the effects to their ability to hunt, fish and forage). 

This is huge in two major ways: BC has suspended all land sales and more importantly the issuing of new drilling permits until it updates its process. The Blueberry first nation land claim and treaty rights contain almost the entirety of the Montney formation in BC. For people not familiar, the liquids rich north Montney (overpressurized section) is almost entirely in BC. 

While this is bad for the Canadian O&G industry, as it is precedent setting. It will probably greatly slow the timing for issuing individual well permits and increase costs long term. 

Short term this will increase the value of lands that Peyto has in the Deep basin, being entirely within Alberta and connected to the NGTL. More opportunistically, if this is extended in duration, should allow Peyto to grow into new egress coming online during a period of high prices and take marketshare permanently. 

Blueberry River is also applying for an injunction to suspend the process of the NEBC connector, which will further bottleneck growth out of the Montney by limiting egress for liquids and NGLs longer term. 

I think Peyto will successfully be able to fill all their infrastructure. I doubt the BC Government will appeal to the federal court, as the current government could care less about the long term damage this precedent sets and the PR impact of reconciliation. If they don't however, then it gives each of the hundreds of bands a veto on almost every project going forward in the province. 

I think this partially explains the outperformance of players without BC montney assets. 


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