Peyto Exploration & Development Corp T.PEY

Alternate Symbol(s): PEYUF

Energy Oil & Gas E&P

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).

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Peyto Exploration & Development Corp > Peyto: Avoiding AECO Damage While Optimizing An Acquisition

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Comment by malx1on Oct 31, 2024 1:37pm

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Post# 36290937

RE:Peyto: Avoiding AECO Damage While Optimizing An Acquisition

GregC24 wrote: https://seekingalpha.com/article/4730201-peyto-avoiding-aeco-damage-while-optimizing-an-acquisition?mailingid=37248509&messageid=2800&serial=37248509.987&source=email_2800&utm_campaign=rta-stock-article&utm_medium=email&utm_source=seeking_alpha&utm_term=37248509.987

Greg, thanks for posting. It's funny, a few years ago there was a bunch of whining about PEY's hedgebook. Now we see what was whined about is now fashionable again. And on and on, we go in circles, I mean, cycels. Shareholders afraid of hedges are often too near-sighted, lost in myopia of the latest Q rather than focusing on the next 5yrs.

Economies of Scale, a real thing.

Peyto mitigates AECO natural gas price volatility by completely avoiding AECO.
The company's hedging program is notably profitable. Not many commodity companies can claim that.
Peyto's strategy includes supplying natural gas to electricity generators. That market has different pricing.
The strategy of effectively "selling ahead" avoids the destructive volatility of the Canadian natural gas market.
The acquired acreage appears to have greater profitability from lower operating costs combined with a more valuable production mix.