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).

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Peyto Exploration & Development Corp > Conference call 12 noon AST or 11 EST

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Comment by TerribleEngon May 12, 2022 12:50pm

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Post# 34678288

RE:RE:Conference call 12 noon AST or 11 EST

Seeing strong inflation on the well servicing side and the construction side. Double digit increases. During Chambers construction they had increases mid construction as they were losing guys. I think on the rigs he mentioned three rate increases since last summer.
Going to go balls to the wall until Q4. May drill right through Xmas and keep drilling as prices are hot.Will definitely be at the high end and may go over $400M in capex due to cost creep.
Rig crews have been on long term contract with Peyto for years. Loyal, but also want to keep attrition low and need some breaks.
Production looks very strong, winter 2022/23 pricing is looking good.
Some talk about Peyto taking LNG export contracts to assume JKM/TTF pricing like ARX and TOU. Doubt anything will come from that, the answer sounded less than enthusiastic.
Peyto will pay increased taxes (shocker) and will not change behavior to minimize it.
Hard to get gear and equipment for new infrastructure. (This will likely keep gas pricing high assuming demand doesn't fall out, at this time that risk looks minimal). Supplies for this year are secure but visibility into next year is starting to get strained.
Biggest concern is steel availability and pricing. My own company and all the companeis my friends work in are in the same boat. There is just no inventory, costs are up over double, and their capex budget is extremely sensitive to that. Peyto may adjust designs to limit steel usage (probably not a good idea). Peyto has mill allocation, so their ability to complete well is in better shape than some of the other comapanies. This is going to be a major throttle on industry and prevent supply response from curtailing gas prices.
Expect 5% dilution in stock count going forward. (Not a fan of this, some companies pay out the options out of company cash instead of issuing new shares, so that the costs are visible, share count stable and keep things under control).