Peyto Exploration & Development Corp

Latest Results (15.08.2026):

Peyto Exploration & Development Corp. reported its results for the second quarter of 2026 (Q2 2026). Production rose to 145,320 boe/d (up 10% year‑over‑year), funds from operations were $227.7 million ($1.09 per diluted share), and the company generated $140.6 million of free funds flow while spending $84.9 million of capital. Peyto maintained a low-cost profile (total cash costs $1.32/Mcfe), strong margins (71% operating margin) and reduced net debt to $1,015.9 million as it continued diversification and hedging activity.

Production

Q2 2026 production averaged 145,320 boe/d (758.2 MMcf/d gas, 18,959 bbls/d NGLs), +10% YoY and +7% on a per‑share basis; Peyto brought 15 wells on production in the quarter.

Cash flow and liquidity

Funds from operations: $227.7M in Q2 2026 (up 19% YoY; +15% on a diluted per‑share basis at $1.09). Free funds flow was $140.6M for the quarter. Total capital expenditures were $84.9M.

Earnings and profitability

Adjusted earnings were $105.0M (≈ $0.50 diluted share), reported earnings $106.3M. Peyto posted a 29% profit margin and a trailing‑12‑month ROCE of 18% and ROE of 16%.

Hedging and market diversification

Peyto recorded realized hedging gains in the quarter (company noted $36.7M) and realized natural gas price after hedging of $3.42/Mcf — a 108% premium to AECO 7A. Hedge coverage: ~505 MMcf/d for H2 2026 at $4.02/Mcf and ~404 MMcf/d for 2027 at $3.31/Mcf; hedges and diversification secure ~ $485M of revenue for H2 2026 and ~$590M for 2027 to date. Peyto also signed a 10‑year 50,000 MMBtu/d supply agreement with Centrica (deliveries from 2029, priced vs Dutch TTF).

Costs and netbacks

Total cash costs were $1.32/Mcfe (including $0.28/Mcfe royalties); cash costs before royalties $1.04/Mcfe. Field netback was $3.38/Mcfe and cash netback $3.16/Mcfe. Operating costs and interest per Mcfe improved versus Q2 2025.

Balance sheet and shareholder returns

Peyto reduced net debt by $72.4M in Q2 to $1,015.9M at June 30, 2026. Dividends paid were $71.8M in the quarter (total payout ratio ~70% for Q2). Shareholders' equity rose to $3,044.7M.

Activity and capital program

Q2 2026 drilling: 10 gross spuds, 14 completions and 15 wells brought on production. Peyto invested in facilities and land (26 gross sections acquired in the quarter). The company reiterates 2026 capex guidance of $450–$500M to add 43,000–48,000 boe/d by year‑end.

Outlook

Peyto emphasizes continued focus on low costs, market diversification and mechanistic hedging to protect cash flow amid commodity volatility. Management expects to operate four rigs for the balance of 2026 and will manage production exposure to weaker summer markets as needed.