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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 MagicPinstripeson Apr 03, 2022 5:53pm
156 Views
Post# 34571570

RE:Other Gassy stocks

RE:Other Gassy stocksSportster,

I am a former owner of Pine Cliff. I had about 50,000 shares worth that I sold off prior to their earnings and turned around and bought Birchcliff - which was substantially off its 52 week high. I made a really nice profit on the sale with PNE at its 52 week high (it has now since gone higher) but my investment into Birchcliff has advanced at a greater percentage than PNE comparatively speaking, with Birchcliff eclipsing it's 52 week high and then some.

While it's true that PNE has one of the lowest decline rates in the business, it's mostly because the wells are older. It's true that PNE is expected to be debt free later this year, but if you look at the numbers, you'll see that they've only managed to turn a profit this year due to it being a banner year in Oil and Gas. Their operation expenses are killing them. For example, Peyto's OpEx are 134m at 100K boe/d and Pine Cliff's are at 88m for 21K boe/d. They are spread out in three major geographic areas and have almost no plans to grow. They seem to be happy to be stagnent around 21,000 boe/d. They have over 339m shares issued and plan to issue a dividend for the first time in their history ($0.01/quarter I believe) which will eat up a good portion of their cash flow. No share buybacks or increased capital expenditures on the horizon other than maintaining the production they have. They did recently acquire a private company for cash which increased their production by around 2,000 boe/d to where it stands now at 21K. They also have a huge liability in terms of abandonment costs that will be partially offset by provincial and federal funds, but it's not going away. It's much larger than Peyto's future abandonment costs as they also have some oil in the mix. 

The longer I was invested in them, the more I saw that it just wasn't a great investment for me long term and I'm happy to have exited the position with a nice profit in the interim.


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