Peyto Exploration & Development Corp T.PEY

Looks like

[shenty46]

Looks like peyto would be generating around one billion free cash flow in 2023.

[houbahop]

Hopefully you will still have some PEY shares or options to sell by then.

[wreckhouse]

only a billion ! hope peyto gets a bug in their butt & increases the didi by .025 this 1/4 to keep the per % up over 5%  We are on the right track . BCRNW

[sportstermathew]

I wonder if Gee's comments today helped with the stronger price as compared to most oil and gas today.  CR sucked as others did like JOY etc. Their numbers are going to be good.  2nd, 3rd and 4th quarters even better.  When the buying last week came in on CR up to $5.25 range I was actually thinking of moving everything into PEY and then we have this rise in PEY again. 

[TerribleEng]

This is where I have Peyto for the year based on their hedges and their strip. I think I am light on the liquids pricing but I will get first strip pricing soon after talking with some people. I would expect to see a major dividend increase after Q2. Going into 2023 is looking absolutely unreal if hedging losses slow down and gas tightness moves into 2023. Heating Value

[houbahop]

Allow me to  underline some discrepencies with my assumptions, starting with the easy ones: - Your share outstanding numbers are from 20'Q2 - 21'Q4 royalties were $28.3m - Capex and acquisition will total close to $152m in 22'Q1. - Expect a $10m end of year bonus in 22'Q4 (although paid with options or increase share number) - 21'Q4 revenues after basis and hedging loss

[TerribleEng]

Yeah my share numbers are old. I used to update them QoQ, but then stopped as they never materially changed. I don't list anything here based on sharecount, but current shares are 168 or so. The royalties I have are definitely old and using the old run-rate, had a newer value on another sheet but I had formulas frozen...I'll post a new copy of the working sheet with actual live values

[Yasch22]

This post has been removed in accordance with Community Policy

[houbahop]

At current strip pricing for oil and Nastgas for 2022 and 2023, Peyto is in a position to generate $370m ($2.20/share) in FCF this year and $470m ($2.80/share) in 2023. 2024 is all open with very few hedges and Natgas prices that has a big upside potential with all the energy demand shift to Europe. $800m ($4.75/share) seems to be a very achievable target with Natgas prices above $4.50cad/Gj and

[TerribleEng]

Good work Houba. I have similar figures for 2023. The big wildcard is does PEY wait for the backwardated prices to lift 2023 pricing or do they hedge out now leading the rise? They already have half their production for winter hedged $2 below current strip. With summer pricing April+ on the verge of lifting, I am really curious as to what they do. Could materially lift 2023 FCF past $600M. Also

[houbahop]

Like you've mentioned in a previous post, a hedging strategy should be used to reduce cash flow risk of capex $$$. Darren claims cash invested in a new well is paid back inside a year, for most wells. If, for instance, they hedge 60% of 2023 production before the beginning of 2023, they are gambling with 2023 Natgas prices. In a contango future strip, it pays off, but in steep backwardation

[TerribleEng]

Preaching to the choir. I think the vast majority of investors would appreciate that as a general strategy. It would also align with market forces. Markets backwardated-> Spot rising and market tight->Hedge less [No current prod - some fraction of Capex]. Contango->Spot signaling a glut->Hedge current more [Some current prod - All capex]