Peyto Exploration & Development Corp

Latest Results (15.01.2026):

Peyto Exploration & Development Corp. reported Q3 2025 results with strong cash generation and profitability: funds from operations of $198.9 million ($0.98 diluted/share), free funds flow of $69.1 million, net earnings of $90.7 million ($0.45 diluted/share), and dividends of $66.4 million. Production averaged 129,762 boe/d (up 8% year‑over‑year). The company highlighted low cash costs, substantial hedging gains, a reduced net debt position, and a preliminary $450–$500 million capital program for 2026.

Key financials

Q3 2025 FFO: $198.9M (29% YoY increase); free funds flow: $69.1M; earnings: $90.7M. Total capital expenditures in the quarter were $126.3M and dividends paid were $66.4M (total payout ratio 99% for the quarter).

Production and operations

Production averaged 129,762 boe/d (684.9 MMcf/d gas, 15,611 bbl/d NGLs), +8% YoY (+5% per share). In Q3 Peyto drilled 20 gross wells, completed 16 and brought 18 on production; commissioned a new Sundance field compressor.

Prices, hedging and marketing

Realized natural gas price after hedging/diversification was $3.57/Mcf (3.3× AECO 7A). The quarter included substantial realized hedging gains (reported ≈$89M) and Peyto exited with hedge coverage ~450 MMcf/d for Q4 2025 and ~429 MMcf/d for 2026 (average fixed prices > $4/Mcf for those volumes).

Costs and margins

Cash costs were $1.21/Mcfe (lowest since Q4 2023), royalties $0.08/Mcfe, operating $0.51/Mcfe, transportation $0.30/Mcfe, G&A $0.06/Mcfe and interest $0.26/Mcfe. Operating margin was 72% and profit margin 29% (trailing 12‑month basis).

Balance sheet and liquidity

Net debt fell to $1.22 billion at Sept 30, 2025 (down $126.1M vs Dec 31, 2024). Peyto amended and extended its credit facility to $1.05B (maturity Oct 23, 2029) and repaid a $50M term loan using the increased revolver.

2026 preliminary program and outlook

Peyto proposed a preliminary 2026 capital budget of $450–$500M targeting 70–80 horizontal wells, expecting to add ~43,000–48,000 boe/d of new production to more than offset an annual decline of 26–28%. Management remains constructive on gas demand and intends to retain a five‑rig program early in 2026, subject to market conditions.