What happened to the "sweet spot"?I seem to recall a few President;s Reports ago that DG had refered to a production level of about 100 mboe/d range being the sweet spot of production versus production costs to get the most out of PEY's current assets. Does anyne else recall that report and did that production philosophy change?
In the recent Monthly Report (was there a name change here from President's Report and does that reflect modesty on JP's part or is he not producing it himself anymore?), that 2021 production increased less than 15% in 2022 for a production cost increase of more than 30% (not counting acquisitions). To me th increase in costs ( it seems way more than what other peers have budgeted for of 20% increase). do not justify the gains especially with a falling NG price.
I would tie this to Houbapop's comment of producer's "drill baby drill" mentality driving the NG price down it seems to me that in the singular case of Peyto, (other producers have different scenarios), that finding and holding that "sweet spot" of costs versus maxed profit while they pay down debt, if they can, would be the smart path not only for them but the industry as a whole.
Did I get that 100 mboe/d target wrong? Am I being naive in thinking that they can hold that production level within a few mboe/d or does that number have to fuctuate within the range that they are producing now because of decline rates etc,,,? Did the "sweet spot" production policy leave with DG or has the sweet spot level moved with inflation?
GLTA
GLTA