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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 TerribleEngon Sep 24, 2021 1:07pm
148 Views
Post# 33914531

RE:Dividend Predictions

RE:Dividend PredictionsI think you are really close. 

I am leaning toward $0.02/month until debt gets down to 1x Net/EBITDA which is basically the Canadian average. That could be done by paying down debt, but I would greatly prefer they fill out their infrastructure and start generating positive returns on those idle assets. 

You can either pay down $1 in debt to avoid $0.05 in interest... or put $1 in CAPEX to generate $1 in EBITDA and it services $20 in debt. It's the quickest way to deleverage if you can add production from FCF and don't need to take debt to build plants.

I think we will get back to a monthly dividend once it gets to a material amount, as it encourages more stable ownership. Eliminates the dividend capture crowd that can lead to volatility. $40M/yr is basically immaterial to the company at this point and won't impact capex at all, I would prefer an NCIB with buying only below a floor. That would keep volume on the stock high and it's a bit more tax efficient.    
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