Canada's Peyto Q4 earnings rise as production hits record

Overview

• Canada natural gas producer's Q4 production rose 6% yr/yr to a record 140,794 boe/d

• Q4 earnings rose 61% yr/yr to C$125.9 mln, with diluted EPS at C$0.61

• Funds from operations for Q4 climbed 23% yr/yr, aided by higher production and hedging gains

Outlook

• Peyto plans 2026 capital expenditures between C$450 mln and C$500 mln

Result Drivers

• HIGHER PRODUCTION - Q4 production volumes increased due to ramp-up from new wells targeting high-rate Notikewin and Falher formations

• HEDGING AND DIVERSIFICATION - Realized natural gas prices were boosted by hedging gains and exposure to premium markets outside AECO

• LOWER CASH COSTS - Q4 cash costs fell 10% yr/yr due to lower royalties, operating, and interest expenses

Company press release: ID:nGNX15sW8D

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

• Wall Street's median 12-month price target for Peyto Exploration & Development Corp is C$27.00, about 0.3% above its March 9 closing price of C$26.92

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago

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