Peyto Reports First Quarter 2025 Results

Core Insights - Peyto Exploration & Development Corp. reported strong operating and financial results for Q1 2025, driven by increased natural gas prices and effective risk management strategies [3][6][25]. Financial Performance - Funds from operations (FFO) reached $225.2 million, or $1.12 per diluted share, a 10% increase from Q1 2024 [6][40]. - Earnings for the quarter totaled $114.1 million, or $0.57 per diluted share, reflecting a 14% year-over-year increase [6][9]. - The company reduced net debt by $65.7 million, bringing it down to $1.28 billion [6][46]. - Total capital expenditures were $102.1 million, with a total payout ratio of 76%, down from 89% in Q1 2024 [6][54]. Production and Pricing - Average production volumes increased by 7% year-over-year to 133,883 boe/d, with natural gas production averaging 710.5 MMcf/d [6][9]. - The realized natural gas price after hedging was $4.17/Mcf, 89% higher than the AECO 7A monthly benchmark of $1.92/GJ [6][13]. - The company recorded $50.8 million in realized hedging gains during the quarter [6][13]. Cost Structure - Cash costs totaled $1.42/Mcfe, a 6% decrease from $1.51/Mcfe in Q1 2024, maintaining the lowest cash costs among Canadian producers [6][15]. - Operating margin stood at 71%, with a profit margin of 32% [6][16]. Capital Expenditures and Drilling Activity - Peyto drilled 19 wells (18.2 net) and completed 13 wells (13.0 net) during the quarter [10][21]. - The company invested $15.5 million in gathering and processing facilities, enhancing its operational capacity [10]. Market Outlook - The company remains optimistic about future natural gas prices, supported by increasing U.S. LNG export demand and ongoing natural gas demand for AI-driven data centers [25][26]. - Peyto's capital guidance for 2025 is set between $450 million and $500 million, with plans to adjust based on commodity price fluctuations [26].