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Peyto Exploration & Development Corp. (PEY.TO)

Toronto - Toronto Real Time Price. Currency in CAD
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2.61000.0000 (0.00%)
As of 11:18AM EDT. Market open.
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  • O
    Oco
    Big news. This is the plant that Peyto is supplying. https://www.powermag.com/construction-begins-on-new-gas-plant-in-alberta/
    Macquarie Capital and a handful of other development sponsors announced they have successfully closed financing for the C$1.5 billion ($1.2 billion U.S.)
    Macquarie Capital and a handful of other development sponsors announced they have successfully closed financing for the C$1.5 billion ($1.2 billion U.S.)
    www.powermag.com
  • J
    JP
    so where do people see it being fairly valued? 5, high single digits? I agree with fracking being hamered by low oil price means less gas byproduct therefore should help support prices. I also think the future of power generation is in renewable energy but it still needs some FF generation to help for at least the next 10-20 years until we can deploy enough generation and storage. NG is perfect to help for this transition period.
  • O
    Oco
    Quite the surge up, from $2 bucks to $3 bucks in a few short weeks! They are just getting started. The gas market is starting to signal more supply is needed. Henry and AECO did a decent spike up. California is having rolling blackouts due to insignificant gas generating capacity (capacity product) with too much intermittent renewables (energy product) on the system. Other states are heading to a similar dynamic, more volatile grids that need rapid-response capacity (i.e. NG) to partner with low-cost renewables . US coal power generation shrunk by 30% in H1 2020. Coal plants a retiring ahead of schedule in Alberta due to poor economics. NG is going to eat most of coals market share up. Then fracking associated gas has significant supply destruction underway, meaning less gas dumping in the market. Then LNG starts up again, then Canada LNG. We have the marking of a sharp supply-demand rebalance and good times ahead for Peyto, one of the lowest-cost producers, aka most profitable producers. It has been a long wait, this is my bullish thesis and I'm not going to be selling. I have never been so excited by winter haha. Peyto is how you hedge your covid winter blues ;)
    https://www.cnn.com/2020/08/17/us/california-blackouts-investigation/index.html
    About 3.3 million California homes may lose power during rolling blackouts on Monday and the state's governor is demanding an investigation into the power outages.
    About 3.3 million California homes may lose power during rolling blackouts on Monday and the state's governor is demanding an investigation into the power outages.
    www.cnn.com
  • O
    Oco
    I missed the earnings call, did we learn anything new outside what was already stated in the ER? Big Sunny update?
  • J
    JP
    why is this dog waking up all of a sudden??? i like it since I have a big chunk of shares bought in the mid 1s but I had forgotten about this lately.
  • F
    Foster
    I always like reading Darren Gee's monthly newsletter and he is one of few who does that. I have to tell you, the tone of the last couple have been pretty bleak especially considering this latest was sent after the huge recent spike in gas. I still want to know if Big Sunny is ongoing, completed or stopped in place? He does not mention that and I don't think his last conference call did either? Any one else know? This is the perfect time to be injecting gas into Big Sunny when the price of gas is going up everywhere but Alberta.
  • O
    Oco
    So Tourmaline, yes, yes, Peyto indicator for results next week.
  • B
    Brett
    At what price do they bring back the dividend ?
  • O
    Oco
    My take is: Peyto is so underpriced, it has a market cap of $230M, yet it has a free cashflow of $110M (note: it has $1.2B in debt, $3.6B assets), that is a crazy value (PE = 1.73!) considering the company just weathered some really challenging conditions, profitable for 20 years straight(!), and it still showing strength against those headwinds. That's an impressive performance. Of the earnings, they paid out $46M in dividends, that is a 17% return (the div requiring only 42% of free cash flow). Seems pretty safe at this price point. How is the Carona virus going to significantly affect NG prices? Gas is not the same commodity as oil, it accesses regional markets (i.e. US, Europe), not international, and is affected by the supply/demand characteristics in those specific gas markets. People still need power and heat (even if some start remote working), now folks at home and the office during all times, now we double-counting consumption. As this happens all the oil frackers reduce capex and stop drilling because of the oil price war (their breakeven is $50 oil), the associated gas dumping slows and declines fast. Basically, frackers will milk their investment dry with super fast depletion rates on the gas, just as demand is increasing. Then there is a massive gas demand crunch and prices increase. If that happens this company is poised to go into explosive returns when the gas markets recover, NA gas demand has been growing 6% yoy, that is cranking up even more, just record coal power retirements show no sign of slowing. Then who is going to make the most money, respond the fastest, the company with the lowest production cost in Canada (that's Peyto), with new access to the henry hub (i.e. price alignment) thanks to some infrastructure/contracting upgrades. If gas, doubles in value (back to normal range) this company is then making $427M free cash flow. It has no problem managing that debt in any case, probably pay it down. What is the straw that breaks the camels back in the market? Who is poised to benefit, these guys?
  • N
    N13
    Capital budget for 2020 approved.....all from free cash flow. It's amazing that a 500 Mil. market cap company has that much free cash flow. https://ca.finance.yahoo.com/news/peyto-exploration-development-corp-confirms-220010902.html
  • O
    Oco
    Added some more. Peyto was worth this price back March 2009 and March 2003 (not inflation adjusted), then look at what happened. Yes Alberta is swimming in NG, but change is coming, NOVA system upgrade (2019-21), coal power plant retirements (4 in 2019 alone), coal to gas conversations and LNG Canada (2024). Also, storage is at very low levels, let's hope for a cold winter next year. Then you have the condensate, which makes up an increasing portion of Peyto revenues, that is what the oil sand operations need to dilute bitumen, you have TMX, Line 3 and Keystone, something has got to go, the curtailment gets lifted, production ramps up assisted by higher oil prices and increased oil by rail. This company has been well managed and profitable through the worst times, now they are a lean mean machine ready for some major upside when commodity prices increase. The market has got to start valuing in this upside eventually.
  • F
    Foster
    @Feng, @Ryan, @N13, @Krosstika I am a little disappointed that Peyto seems to have lost momentum as most gassers in the states are still rising due to low oil. Note, EQT, AR, RRC have been on fire because of the curtailment of oil drilling in Texas and N. Dakota. Meanwhile, I tried to get some info directly from Peyto via the investor relation link at their corporate web site. This is going back weeks ago. I also followed up with a voice message a week ago and have not received any response to either. I was simply questioning the status of the Big Sunny storage facility and I was also asking if they are still moving forward with plans for the floating LNG platform in partnership?
  • N
    N13
    @Foster I see what you mean and hope this is the future trend but I've seen this before....a bit of a run up and then Peyto's share price corrects shortly thereafter....so I don't get too excited with these moves. I do feel we are at a turning point and the next year or two will be very rewarding. Hopefully this is a start of a new trend.
    Rewarding.us
    rewarding.us
  • F
    Foster
    I keep nibbling away buying more shares at these low prices to average down. Now I finally own enough to be paying closer attention. You can pick your poison with U.S. energy plays and all you worry about these day is bankruptcy. What specific pipeline is required to alleviate much of Peyto's gas and or liquids transport to market issues? Perhaps there is more than one? Is it the TRP pipeline going east, or a pipeline going to the west coast? I know the big Trans Mountain pipeline through BC is for heavy crude and will not be completed for perhaps 5 year if ever. I am simply asking what pipeline constraints I need to be following for Peyto's success and when it might be complete. Is @Krosstika still out there? How about @Feng, @N15, I don't see you guys on the message board recently.
  • F
    Foster
    This trading is a mystery in both countries. The truth is, Peyto is holding up MUCH better than any of my U.S. Energy. Nevertheless, Natural Gas in U.S. is up 14 cents today! Note, that is higher than it was before the crash began over two weeks ago. I find Peyto share price peculiar since Peyto can turn the gas up any time they choose. Granted, oil is a different issue entirely, and mostly political at this point. With oil production plunging in the states, one has to think pure gas plays will be the only beneficiary.
  • O
    Oco
    The Alberta power market just went to Alert mode 2 in this cold, one alert away from blackouts, sitting at max price cap $999MWh. Reserve margin gone. 2 old tired coal units malfunctioned. Market is signalling new gas fired capacity is needed, and it is coming in a big way.
  • M
    Mike
    Peyto is thee only company that owns complete supply chain which computes into a lower cost producer.

    There is obvious forces trying to influence Canadian producers. Might be long term but worthwhile buy the dips.
  • J
    JJames
    Why does it keep plummeting? I don't see anything mentioned on their website about restructuring or anything? It used to go up when natural gas did, but now it just goes down, down, down...something's up, maybe?
  • F
    Foster
    I actually think the market was relieved with the dividend cut. First of all, the market and anyone here should have expected it. Every energy company is using any excess cash to hunker down and shore up their balance sheet for bad times and build out any ongoing projects that may help them in the coming good times. We need to look elsewhere for dividends without giving up on Peyto. Good Luck!