GregC24 wrote: houbahop wrote: "But yeah let's take these hedges that are now in the black and use it to generate unhedged growth... putting all the initial production into a flooded market. "
I have been decrying the same, for months. They have done this mistake in 2017 and it placed shareholders in a near death situation a couple of years later. Now, if they repeat the same mistake of being voluntarely blind instead of being pro active about the situation, someone on the Board of Directors is not doing its job. Capex should be adjusted, not only for seasonality, but also according to prevailing spot and prevailing futures price. Growing production in a flooded market is NOT a good use of Capex dollars. And this is exactly what they said they would do in 2024:
"The Board of Directors of Peyto has approved a 2024 capital budget of $450–$500 million. The capital program is projected to add between 40,000 and 45,000 boe/d of new production by year end and offset the estimated 25% decline in base production allowing Peyto to target an exit rate between 135,000 to 140,000 boe/d."
In the meanwhile, Mr. Rose of Tourmaline said its 2024 production would be kept at the same level as its 2023 exit rate. Mr. Rose is doing his job while someone at Peyto's is playing hide & seek on this issue and some others. Totally irresponsible...
" It wasn't smart then, and it's not smart now. I have told Darren this before, and he told me his job isn't to take a position on gas prices. That may be true but the hedges have an NPV and that mpneynis fungible. The decision to deploy capital should be based on the unhedged position, as it's an independent choice."
Chesapeake CEO a few days ago...
"While we will benefit from a strong hedge position, we are responding accordingly with our 2024 capital and operational plan. First, we are reducing capital by nearly 20% and production approximately 15% from the preliminary outlook we provided last quarter. Under our revised capital program, we plan to limit our turn-in-line count to 30 to 40 wells with the majority having already occurred in January and February, drop two frac crews, leaving one frac crew in each basin and drop two rigs, resulting in four rigs in the Haynesville beginning in March and three rigs in the Marcellus beginning midyear.
We believe limiting turn-in-lines and building DUCs is the prudent response to today's market. Doing so will shorten our cycle of supply to appropriately and effectively meet market demand. This results in shorter cycle capital efficient decisions that will ultimately offer incremental capacity of up to 1 Bcf per day by the fourth quarter, ensuring we have ample supply to provide customers when demand recovers. Ultimately, our plan is designed to maintain productive capacity which positions us to quickly return to over 3 Bcf per day with minimal incremental capital investment. We will be prudent in our approach, bringing production back online efficiently as consumer demand warrants. Overall, our 2024 program demonstrates Chesapeake's continued focus on capital discipline, operational efficiency and free cash flow generation, while building the capacity to consistently deliver for consumers and shareholders through all demand cycles.
Simply put, Chesapeake is built for the volatility we are experiencing today and our strategy is positioning the company to thrive as the market rebalances into 2025."