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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 SecondhandGnuson Dec 26, 2022 12:10pm
602 Views
Post# 35191899

Peyto in 2023

Peyto in 2023A few Boxing Day deals wrt to Peyto for those of you with room in your Christmas stockings:

--PEY has already made its major infrastructure investments in Brazeau/Chambers, unlocking its most profitable area for further growth;
--Despite bad hedges being a sunk cost, investors can't help but be affected by them when calculating future CF and multiples.  The worst hedging is now over, which gives the company a positive tailwind as it goes from godawful, to really bad, to plain old bad and (sooner than we think) to a minor inconvenience;
--Some of the share price benefits were paid forward with Darren Gee's retirement gift of a dividend increase, but Peyto should get another bump once the new $$ hit shareholders' accounts at the end of Jan '23 (along with new ratio updates on investment websites);
--Debt reduction continues on a net basis, but especially so for the various debt ratios.  Interest costs have rapidly decreased despite higher rates;
--Peyto is and has been growing, and the land purchases and small/mid-sized acquisitions will fuel reasonably-priced growth. I understand those who want faster debt reduction, but I've been pretty consistent in saying that their new land has been their best use of capital for the mid/long term;
--The market should start incorporating new gas powerplant direct service income within the next few months;
--Reserve values will increase significantly when released within a few months from both exploration success and higher future price assumptions;

Peyto is still cheap via essentially all metrics despite rising nicely in 2022.  There are a few possible obstacles for 2023, but today isn't the day to ponder such things. My best to you all both within and beyond your investing profit and loss statements.
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