Peyto Exploration Announces Impressive Reserves and Growth
Peyto Exploration Optimizes Production and Records Growth in Reserves
CALGARY, Alberta – Peyto Exploration & Development Corp. (TSX: PEY) is thrilled to share outstanding results from its independent reserve report effective December 31, 2024, highlighting a milestone in reserves development. According to the evaluation conducted by GLJ Ltd., Peyto marked its 26th year of excellence in reserves development.
Key Highlights of the 2024 Capital Program
The year 2024 was noteworthy for Peyto as it represented the first year of drilling high-quality assets obtained in the Repsol Canada Limited Partnership transaction. This significant capital program allowed Peyto to achieve record reserves.
Record Reserves and Production Growth
The drilling program for 2024 resulted in an impressive production of 457 billion cubic feet equivalent (BCFe) of new Proved Developed Producing (PDP) reserves, achieved at a remarkably low Finding, Development, and Acquisition (FD&A) cost of $1.00 per thousand cubic feet equivalent. This efficiency continues to underscore Peyto's commitment to maintaining a low-cost structure in reserves expansion.
Exceptional Operational Performance
In December 2024, Peyto recorded its highest-ever production at 136,000 barrels of oil equivalent per day (Mboe/d), consisting of 721 million cubic feet per day (MMcf/d) of gas and significant liquids production. This performance has led to a capital efficiency of $9,700 per barrel of oil equivalent per day, marking a highlight in the company’s operational history.
The successful execution of Peyto's hedging and marketing strategies has resulted in an average field netback of $3.26 per Mcfe, showcasing the company's ability to sustain profits even amid fluctuating market conditions.
Plans for Continued Growth and Capital Expenditure
As part of its ongoing commitment to growth, the Board of Directors has approved a capital budget for 2025 ranging between $450 million and $500 million. This investment is expected to facilitate the addition of 43,000 to 48,000 boe/d by the end of the year, compensating for an anticipated base production decline of 27%.
Securing Revenue Certainty for Future Projects
Peyto’s proactive hedging strategy has fortified its revenue streams, securing prices for approximately 473 MMcf/d of natural gas at an average price exceeding $4 per Mcf. When combined with revenues from liquids, the total revenue protection for Peyto exceeds $800 million, ensuring that shareholder dividends and capital program needs are well covered.
Historical Performance and Future Outlook
Over the previous 26 years, Peyto has established itself as a significant player in Alberta’s Deep Basin, amassing a total of 11.2 TCFe of natural gas and associated liquids. Today, 59% of these reserves have been developed, affirming the consistent return on investment for shareholders.
Metrics that Showcase Company Growth
In 2024, Peyto successfully converted 166%, 199%, and 239% of its annual production into new reserves across PDP, Total Proved (TP), and Total Proved Plus Probable (P+P) reserve categories, respectively. This showcases a robust reserve replacement and a commitment to sustainable development.
Commitment to Shareholders
Throughout its operational history, Peyto has returned an impressive $3.1 billion to shareholders in dividends, with a notable focus on ensuring returns through sustainable practices and efficient capital allocation.
Summary of Future Developments
Peyto ends the year with optimistic forecasts for the future amidst current low natural gas prices. Its cost structure and smart hedging strategies position the company to successfully navigate market fluctuations while continuing to create value.
Frequently Asked Questions
What are the key highlights of Peyto's 2024 capital program?
Peyto's 2024 capital program recorded a production of 457 BCFe of new PDP reserves at a finding cost of $1.00/Mcfe, alongside a record production rate of 136 Mboe/d in December.
How much has Peyto invested in capital for 2025?
Peyto has a capital budget of $450 to $500 million approved for 2025, aimed at adding significant production by year-end.
What is the outlook for Peyto's reserves growth?
Peyto has successfully replaced more reserves than produced in 2024, with a replacement rate of 166% for PDP reserves, demonstrating strong growth potential.
How does Peyto's hedging strategy work?
Peyto employs a proactive hedging strategy to secure prices for a substantial amount of natural gas, establishing revenue certainty amidst market volatility.
What has been Peyto's total return to shareholders over years?
Peyto has returned approximately $3.1 billion to shareholders in dividends while focusing on sustainable growth and capital efficiency.
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