Peyto Exploration & Development Corp T.PEY

I really like to see this purchase...

[sportstermathew]

From Peyto's reserve report:

STRATEGIC ACQUISITIONS The Company made two acquisitions effective January 1, 2021, both directly adjacent to and contiguous with Peyto’s Greater Sundance core area, and both with infrastructure footprints that can be interconnected with Peyto’s gathering system and plant network. Neither acquisition was included in the December 31, 2020 reserve report.

The combined acquisition cost was $35 million and included 114 gross (106 net) producing wells with stable, ultra-low decline (less than 5%/yr) production of approximately 2,900 boe/d (95% gas). Also included are 54 gross sections of land (81% interest), in which the Company has internally identified over 100 future drilling prospects. The properties contain a combined 11.5 net inactive wells reflecting a low liability content and carrying an attractive Alberta LMR above 3.

[TerribleEng]

Ditto. I am glad to see Peyto looking at acquisitions when it makes sense. They need to be continually weighing their options of drilling, buying or returning cash. That was a very reasonable acquisition for what I think turned out to be very cheap. $9000/boe/d plus a 30mmcf gas plant with refrigeration is a steal... The extra $16.5M in Ventura bucks sweetens the deal. That hub is still trading

[Yasch22]

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[TerribleEng]

Yasch, This deal looks like a slam dunk on both a valuation and future opportunity basis. What makes this deal even sweeter is the low decline rate of these assets for less than Peyto's own D&C costs. Peyto would normally spend $9000/boe/day; get a well with a 30% rate decline and not 5%; plus also not get a freebie plant.

[Yasch22]

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[Oldnagger]

To recap 15 to 16 more kboepd through drilling plus 6 or more from Cecila makes 107/ 86 = 22% production increas

[sportstermathew]

Hi guys, I am no where near happy about where we stand at present, glad that we are moving back up but a long way to go. Don't get me wrong I think it will be a much much harder climb back up, only half of what we fell until production and earnings etc. push us to new levels.  And only then. I agree paying debt to some degree will be very important long term, but I don't think Gee

[Water_Man]

Yasch22 It's the former & still named "Apache Plant" https://albertaog.ca/flows.php?plant=Apache%20Cecilia%2012-34%20Plant Paramount Resources Ltd would have got this in 2017 when Apache Corp left Canada. Shell Cecila is a different plant. It was part of the Shell's purchase of Duvernay (Cecilia 9-29-57-21) which Shell sold to Tourmaline. :)