RE:RE:Peyto taking a page from Birchcliff...........my12by61 wrote
"Focusing so heavily on the spot price for NG is an off-base approach for this stock. The majority of Pey's products are presold using the futures market with only a minority of products sold at spot market pricing."
Huh??? I appreciate the reply sir....but......
Off-base??? My assessments are based on solid facts & fundamentals. No speculation or guess work. I don't know what you mean by selling at the "futures market", but ALL producers no matter WHO you are sell & get their revenue by selling at spot OR from hedging (which i'm guessing iswhatyou really mean here). This isrocket science......it'spretty much straight forward & simple enough to understand
If you stil dont get it......I'll make this eassyyy for you. Look at the hedges they have in-place for 2024 & combine that with whatever volmues are leftover to sell at spot. And you'll get a VERY good estimate what their revenue for the qtr/year will be. And i'll REPEAT again here, they will pull in the SAME revenue at~130K boepd that they were getting from 100K. The difference? The massive deterioration in NG prices.......THATS WHY the Repsol deal was done! To maintain the divvy & Capex
Without it ....Peyto would have been up s creek like Birch. But what folksdon't realize is that the end result for both Birch & Peyto is the same.....borrowing to SUSTAIN the dividend. No matter which path is taken.......
And ill emphasize again.......there's NO justification for Peyto to be trading at these INSANE levels with NG so low.........There are better bargains elsewhere in the market with less risk & better risk/reward. The problem here is that naive investors are chasing unsustainble roi's through passive income .....blindly.....without thinking it through.
GLTA