Canada's Peyto Q1 earnings rise 50%, production hits record

Overview

• Canada natural gas producer's Q1 production rose 10% yr/yr to record levels

• Q1 earnings rose 50% yr/yr, reaching C$171.1 mln

• Company raised monthly dividend by 9% to C$0.12/share

Outlook

• Peyto plans 2026 capital spending of C$450 mln to C$500 mln

• Company targets adding 43,000 to 48,000 boe/d of new production by year-end 2026

• Peyto says it will manage production to limit exposure to weaker priced markets through summer

Result Drivers

• PRODUCTION GROWTH - Record Q1 production volumes rose 10% yr/yr, driven by successful capital program and expanded gathering systems

• STRONG REALIZED GAS PRICES - Realized natural gas price after hedging was 73% above AECO 7A benchmark, supported by market diversification and hedging gains

• LOWER CASH COSTS - Cash costs fell 10% yr/yr, with declines in royalties, operating and interest expenses boosting margins

Company press release: ID:nGNX8vCVmv

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "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$27.50, about 7.4% above its May 12 closing price of C$25.60

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

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