Peyto Exploration & Development Corp T.PEY

$7.5

[ngtraderng]

If it does come down to $7.5 it should be a good buying opportunity.

[Investnowplease]

I have invested a large sum into Peyto, for me anyways. Its a very well run company, with super low costs. Most bought at around the 8$ mark.  i believe there break even cost is around $1.50 for its gas isnt it? Might be wrong though. At that amount they are generating huge surplus cashflow.  why is there no love for this stock? I bet was it was an easy double from $8. 

[Yasch22]

This post has been removed in accordance with Community Policy

[Investnowplease]

Thank you explains allot.  Debt to caskflow is managable now though.   That would be below 2x. well as far as stock price goes they hit a low of 1.20 ish.  Thats roughly a 8x.   Yes good but compare to say nuvista which went from a low of .25 to now 8 ish that is 32x.  just saying that imo there is plenty if upside left in comparision to peers. Im in and plan to go

[TerribleEng]

Full-cycle breakevens are closer to $2.20/GJ. The cash price that gets quotes is only the operational cost. Once you factor in the Drilling & completion cost, and the cost of land acquisition it goes from that $1.50 mark to $2.20/GJ, maybe a bit more. You need to consider full cycle costs, otherwise the company ceases to exist as they would run out of drilling locations. The other thing is you

[Investnowplease]

Not pumping.   Disagree on your thoughts on NVA. They where never in a position to merge.  Painted pony was a disaster and over extended themselves. Then the commodity crashed. Nva's asset are top quality. There issue was the bought a property in The 500m range. Then the commodity price fell into the toilet with the covid crash. The now have wells that are a resource play that is

[Investnowplease]

Additionally i like that you quote ful cycle econs unlike most companies.  Thats true numbers.   Clearly an insider. 

[TerribleEng]

Yeah I get that. They were in an OXY type situation. They bought things and then the revenue didn't materialize because commodity prices fell so they couldn't support the burden. They are a very viable and profitable company now, just when comparing investment returns and looking at 10x versus 32x... it's very sensitive to the company that dropped to $0.30. If they had only dropped to

[Investnowplease]

Totally agree. They are 14 x at even 60c.   as far as gas goes im a true believe in supply and demand.  Demand will go up, supply isnt there. Natural declines with investment at present levels are not being arrested.  That takes time. Short term there will be issues imo.  Long term who knows.  Fracs crew utilization is not at precocid levels. That says allot and speaks

[sportstermathew]

You have to be pretty stupid to ring up more debt in this market unless you drill new wells that are paying back so handsomly it is a no brainer. Or unless you do a takeover, and then it well better be a darn good one. So I don't think Peyto's debt will be any higher than at present unless they can bring in so much cashflow within 12 months. Lets put it this way, you can make a killing

[Investnowplease]

I added a few thousand today as well. Pretty much full for my portfolio.  Added more baytex and more Keyera. They lag as well. There cashflow is a given no matter what. Cant argue with 7% div either

[TerribleEng]

Exactly. When people talk about debt between two companies I typically use two though processes: 1) What would the company look like without any debt? 2) What could they buy now if they took on that debt today. For 1, gas companies are trading for a $25K per flowing BOE so Peyto would need to sell off 40% of the company or so. Leaving it with 60K in production and around 500mmcf in plant capacity.

[houbahop]

Assuming a conversion of 1:6 for the 11% of Peyto's oil and LNG production to convert it into mcf of natgas equivalent, Peyto's full cycle break-even including interest on debt, g&a, bonus, royalties, depletion, depreciation,amortization, etc $2.50/mcf * Depletion, depreciation, decommissioning provision, etc: $1.30/mcf Operation cost: $0.56/mcf G&A and stock options: $0.06/mcf

[Oldnagger]

Very informative analysis, but I would think that whatever happens to nat gas in Europe would be largely irrelevant to Peyto as a North American producer !!  

[TerribleEng]

You are right and I have been saying similar on the demand side. An overseas pricing of an importer is largely irrelevant to Peyto. What isn't though is that the Biden admin in the last week or so had been going out to Qatar, Australia, and North Africa to increase investment in natural gas to avoid shortages incase of sanctions on Russia. This admin is bonkers, and they are messing with the