RE:RE:RE:RE:RE:RE:RE:RE:Energy TrendsI was short some gas players since the summer of 2018, when all the trouble with the choke points at James River on NGTL (mainly NE Montney players). Not Peyto due to their large dividend. I did short Peyto in late 2019 when it was obvious that the basis trades and the hedges they were putting on couldn't support the capex budget anymore. Paying out that dividend hurt.... a lot while I was short. The market was in a structural glut, and then I got lucky with covid. I covered all my positions on the day Russia/SA went to war on price (in the mid $1 range).
I waited for the dust to clear, bought ARX/VII later that spring. Then really backed up the truck on Peyto Jan 2021 in the $3 range. At that point Peyto was making 30% FCF, and it was clear that the gas market was rebalancing. At one point gas/energy was 70% of my portfolio, and Peyto was about half of that.
I have continued to reinvest dividends, and institute my own buyback opportunistically. Now a days, Peyto is around 20% of my portfolio, as I have slowly re-weighted things. The big re-weighting was on the Freeport Explosion.
I do wish Peyto didn't have those hedges and large basis trades, so they could have capitalized on the windfall and went debt-free. They could have then used a clean balance sheet to survive the cycle. But I have matured to that idea, and now just build that into my model. Going forward I think stocks like Peyto will benefit with rates going down and investors looking for yield moving funds around. The lower rates will also help Peyto out on their debt service.