Q2 2024 Peyto Exploration & Development Corp Earnings Call Transcript
Key Points
- Peyto Exploration & Development Corp (PEYUF) generated $155 million of funds from operations and $51 million of earnings despite low gas prices.
- The company's systematic hedging program realized $68 million in gains, contributing significantly to their financial performance.
- Peyto's operating margin of 62% is commendable, especially in a low gas price environment, showcasing efficient business operations.
- The drilling program achieved record average lateral lengths of over 2,300 meters, indicating operational efficiency and potential for increased productivity.
- The newly acquired Repsol lands showed a sustained 30% increase in average well productivity, with costs similar to or slightly cheaper than legacy lands.
- Low gas prices have been a significant challenge, with AECO prices being the lowest since 2019.
- The company had to shut down the sour gas sweetening side of the Edson gas plant due to economic inefficiencies, impacting production.
- There is a potential risk of a rail strike affecting frac sand availability and the ability to move liquids, although the company does not foresee a significant impact.
- Peyto has shut in some production and is managing existing production to minimize exposure to low gas prices, which could affect overall output.
- The company is targeting a year-end exit of 135,000 BOEs a day, contingent on gas prices improving, which introduces uncertainty.
Good day and thank you for standing by. Welcome to the 2024 Second Quarter Peyto's Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, JP Lachance, President and CEO. Please go ahead.
Thanks, Marvin. Good morning, folks, and thanks for joining Peyto's second quarter conference call. I'd like to remind everybody that all statements made by the company during this call are subject to the same forward-looking disclaimer and advisory set forth in the company's news release issued yesterday.
Present with me to answer your questions in the room here is Riley Frame, our VP of Engineering and Chief Operating Officer; Tavis Carlson, our VP of Finance and CFO; Lee Curran, our VP of Drilling and Completions; Todd Burdick, our VP of Production; and Derick Czember, our VP of Land and Business
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