CALGARY, Alberta, March 11, 2025 (GLOBE NEWSWIRE) -- In a release issued under the same headline on Tuesday, March 11, 2025, by Peyto Exploration & Development Corp., please note that in the table under Hedging, the following amounts in the line for "Natural Gas" should be "4.14" for 2025 and "4.02" for 2026, not "4.01" and "4.51", respectively. The corrected release follows:
Peyto Exploration & Development Corp. ("Peyto" or the "Company") (TSX: PEY) is pleased to report operating and financial results for the fourth quarter and 2024 fiscal year, and senior management additions.
Full Year and Q4 2024 Highlights:
- Delivered $199.0 million in funds from operations1,2 ("FFO"), or $1.00/diluted share, and $79.6 million of free funds flow3 in the quarter. Annual FFO totaled $712.8 million or $3.62/diluted share, and annual free funds flow totaled $246.7 million.
- Annual capital expenditures4 of $457.6 million resulted in record production of 136 Mboe/d (720.7 MMcf/d gas, 15,708 bbl/d NGLs) in December, yielding a trailing 12-month capital efficiency5 of $9,700 boe/d. Peyto booked a record 6.0 Bcfe of Proved Developed Producing ("PDP") reserves per well in 2024, up 40% from 2023. Peyto delivered a 66% annual operating margin6 and a 24% annual profit margin7, resulting in a 9% return on capital employed8 ("ROCE") and a 10% return on equity8 ("ROE"), on a trailing 12-month basis.
- The Company's disciplined hedging and diversification program in 2024 protected revenues from the sharp decline in benchmark natural gas prices. The 2024 average price for the AECO daily benchmark sunk to an annual average of $1.38/GJ, yet Peyto realized an average price of approximately $2.89/GJ ($3.32/Mcf). The Company exited 2024 with a strong hedge position, which currently protects approximately 480 MMcf/d and 366 MMcf/d of natural gas production for 2025 and 2026, respectively, at prices greater than $4/Mcf. Peyto's hedging and diversification program protects future revenues for the sustainability of the Company's dividends, capital program, and debt repayment. Additionally, this program minimizes the impacts of potential US tariffs.
- Peyto generated earnings of $78.2 million, or $0.39/diluted share, in the quarter and $280.6 million, or $1.42/diluted share, in 2024. Approximately 92% of earnings, or a record $258.4 million ($1.32/share) of dividends were returned to shareholders in 2024. Since inception, Peyto has returned over $3 billion of dividends to shareholders or a cumulative $22.63/share.
- As previously announced, Peyto developed a record 457 BCFe of PDP reserves and increased reserves by 7%, 5%, and 5% in the PDP, Total Proved ("TP"), and Total Proved plus Probable ("P+P") reserves categories, respectively. PDP Finding, Development and Acquisition9 ("FD&A") costs of $1.00/Mcfe are amongst the lowest in the industry. When combined with an average field netback of $3.26/Mcfe in 2024, this resulted in a 3.3 times recycle ratio10 (2.6 times on an after-tax cash netback11 basis), the Company's best recycle metrics over the last 20 years. Refer to more details in the February 20, 2025 press release.
- Fourth quarter production volumes averaged a record 133,426 boe/d (708.1 MMcf/d of natural gas, 15,409 bbls/d of NGLs), an 11% (7% per share) increase year over year, mainly due to strong well results from Peyto's drilling program. Annual production averaged 125,202 boe/d during 2024, a 19% (9% per share) increase from 2023 due to the Company's drilling program and a full year of operations from the Repsol Canada Energy Partnership acquisition (the "Repsol Acquisition").
- Quarterly cash costs12 totaled $1.36/Mcfe, including royalties of $0.21/Mcfe, operating expense of $0.50/Mcfe, transportation of $0.27/Mcfe, G&A of $0.05/Mcfe and interest expense of $0.33/Mcfe. Peyto achieved the 10% target reduction of operating expense announced earlier in 2024 in the quarter bringing costs of the Repsol assets closer to Peyto's legacy assets. Peyto continues to have the lowest cash costs of Canadian producers in the oil and natural gas industry.
- Total capital expenditures were $117.5 million in the quarter. Peyto drilled 16 wells (16.0 net), completed 23 wells (23.0 net), and brought 23 wells (23.0 net) on production.
| Three Months Ended Dec 31 | % | Year Ended Dec 31 | % | |||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
| Operations | ||||||||||||
| Production | ||||||||||||
| Natural gas (Mcf/d) | 708,105 | 622,963 | 14 | % | 659,209 | 553,745 | 19 | % | ||||
| NGLs (bbl/d) | 15,409 | 16,175 | -5 | % | 15,334 | 12,657 | 21 | % | ||||
| Thousand cubic feet equivalent (Mcfe/d @ 1:6) | 800,558 | 720,014 | 11 | % | 751,212 | 629,686 | 19 | % | ||||
| Barrels of oil equivalent (boe/d @ 6:1) | 133,426 | 120,002 | 11 | % | 125,202 | 104,948 | 19 | % | ||||
| Production per million common shares (boe/d) | 676 | 631 | 7 | % | 640 | 587 | 9 | % | ||||
| Product prices | ||||||||||||
| Realized natural gas price - after hedging and diversification ($/Mcf) | 3.43 | 3.87 | -11 | % | 3.32 | 3.57 | -7 | % | ||||
| Realized NGL price - after hedging ($/bbl) | 64.78 | 64.32 | 1 | % | 65.77 | 70.22 | -6 | % | ||||
| Net sales price ($/Mcfe) | 4.28 | 4.79 | -11 | % | 4.26 | 4.56 | -7 | % | ||||
| Royalties ($/Mcfe) | 0.21 | 0.30 | -30 | % | 0.22 | 0.32 | -31 | % | ||||
| Operating ($/Mcfe) | 0.50 | 0.55 | -9 | % | 0.53 | 0.49 | 8 | % | ||||
| Transportation ($/Mcfe) | 0.27 | 0.26 | 4 | % | 0.30 | 0.27 | 11 | % | ||||
| Field netback(1) ($/Mcfe) | 3.35 | 3.73 | -10 | % | 3.26 | 3.51 | -7 | % | ||||
| General & administrative expenses ($/Mcfe) | 0.05 | 0.06 | -17 | % | 0.05 | 0.05 | 0 | % | ||||
| Interest expense ($/Mcfe) | 0.33 | 0.40 | -18 | % | 0.36 | 0.29 | 24 | % | ||||
| Financial ($000, except per share) | ||||||||||||
| Natural gas and NGL sales including realized hedging gains (losses)(2) | 315,098 | 317,246 | -1 | % | 1,172,079 | 1,046,925 | 12 | % | ||||
| Funds from operations(1) | 198,956 | 200,319 | -1 | % | 712,758 | 670,471 | 6 | % | ||||
| Funds from operations per share - basic(1) | 1.01 | 1.05 | -4 | % | 3.64 | 3.75 | -3 | % | ||||
| Funds from operations per share - diluted(1) | 1.00 | 1.05 | -5 | % | 3.62 | 3.72 | -3 | % | ||||
| Total dividends | 65,140 | 63,811 | 2 | % | 258,369 | 239,006 | 8 | % | ||||
| Total dividends per share | 0.33 | 0.33 | 0 | % | 1.32 | 1.32 | 0 | % | ||||
| Earnings | 78,228 | 87,795 | -11 | % | 280,570 | 292,635 | -4 | % | ||||
| Earnings per share - basic | 0.40 | 0.46 | -13 | % | 1.43 | 1.64 | -13 | % | ||||
| Earnings per share - diluted | 0.39 | 0.46 | -15 | % | 1.42 | 1.62 | -12 | % | ||||
| Total capital expenditures(1) | 117,525 | 115,218 | 2 | % | 457,607 | 412,919 | 11 | % | ||||
| Corporate acquisition | - | 699,358 | -100 | % | - | 699,358 | -100 | % | ||||
| Total payout ratio(1) | 93% | 90% | 3 | % | 102% | 98% | 4 | % | ||||
| Weighted average common shares outstanding - basic | 197,388,049 | 190,196,093 | 4 | % | 195,737,374 | 178,894,013 | 9 | % | ||||
| Weighted average common shares outstanding - diluted | 198,746,631 | 191,271,677 | 4 | % | 197,084,973 | 180,311,890 | 9 | % | ||||
| Net debt(1) | 1,348,574 | 1,362,777 | -1 | % | ||||||||
| Shareholders' equity | 2,696,329 | 2,714,943 | -1 | % | ||||||||
| Total assets | 5,505,890 | 5,909,642 | -7 | % | ||||||||
(2) Excludes revenue from sale of third-party volumes
2024 in Review
The year 2024 was one of Peyto's most successful in 26 years of operations. Natural gas prices sunk to multi-year lows across North America as storage inventories remained elevated coming out of a warm 2023/2024 winter. The Company, nevertheless, delivered a strong year of results with its disciplined hedge strategy and diversified market portfolio, record well results from the drilling program, and continued industry leading cost structure. Peyto's field netback of $3.26/Mcfe and PDP FD&A costs of $1.00/Mcfe combined to generate a recycle ratio of 3.3 times, meaning the Company is generating 3.3 times the cash flow, at the field operating level, relative to the cost of finding and developing new reserves. On an after-tax cash netback basis (including G&A, interest costs and current tax), Peyto delivered a strong 2.6 times recycle ratio. Integration and optimization of the Repsol assets was a significant focus for Peyto in 2024. The Company successfully executed multiple projects, including the shut-in of approximately 3,500 boe/d of low-value sour gas and ethane production to reduce operating expenses, resulting in per-unit costs decreasing from $0.55/Mcfe in Q1 to $0.50/Mcfe in Q4. Since closing the Repsol Acquisition, Peyto has grown production on the acquired lands to 50,000 boe/d with a drilling program that outperformed recent years by 40%. The Company reported funds from operations of $712.8 million, earnings of $280.6 million, and returned $258.4 million of dividends to shareholders while decreasing net debt by $14.2 million from year-end 2023. Additionally, Peyto grew production volumes to a record 136 Mboe/d day (720.7 MMcf/d gas, 15,708 bbl/d NGLs) in December 2024 from 127 Mboe/d (656.2 MMcf/d gas, 17,166 bbl/d NGLs) in December 2023, representing a $9,700/boe/d exit capital efficiency. Operating and profit margins remained strong in 2024 at 66% and 24%, respectively, despite the significant drop in benchmark gas prices.
Capital Expenditures
Peyto drilled 75 gross (73.3 net) horizontal wells in 2024 and brought 72 gross (70.3 net) wells on production. The combination of longer horizontal wells, refreshed inventory resulting from the Repsol Acquisition, and high grading the locations on legacy Peyto lands has resulted in sustained production improvements of 25%, as compared to prior years and a 40% increase in per-well recovery, on a PDP basis, as per the Company's most recent reserves report. Drilling costs per meter were down 2% from 2023, while completion costs per meter were down 1%. The Company continued to increase the number of extended reach horizontal wells drilled in 2024, resulting in an 11% increase in average horizontal length from 2023.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| Gross Hz Spuds | 99 | 123 | 140 | 126 | 135 | 70 | 61 | 64 | 95 | 95 | 72 |
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