CA - Peyto: Another Hedging Win

2024-05-15 23:49:23 ET

Summary

• Peyto consistently shows profit in hedging, a unique value-added operation in the industry.
• The Repsol acquisition has one-time costs necessary for optimization procedures.
• More drilling on the acquired acreage is expected to grow Peyto's liquids production and keep average costs steady or maybe even decrease average costs.
• The first Repsol acquisition wells drilled have led to a 30% improvement over previous capital campaigns.
• Management repaid some debt this quarter.

Peyto (PEYUF) (PEY:CA) is a company that consistently shows a profit in its hedging. Not many companies have a consistent hedging program (period). Annual losses in hedging are not common. In the current quarter, the company realized prices for natural gas that were roughly 50 % ahead of the AECO benchmark for the quarter. This is clearly a value-added operation that is unique to this company compared to many in the industry....

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