Peyto Reports Third Quarter Results and Preliminary 2026 Capital Program

Core Insights - Peyto Exploration & Development Corp reported strong operating and financial results for Q3 2025, with production averaging 129.8 Mboe/d, an 8% increase year over year, despite a 1.5% decline from Q2 2025 due to wet weather and low natural gas prices [3][4][21] - The company plans a preliminary capital budget of $450 to $500 million for 2026, aiming to add 43,000 to 48,000 Boe/d of new production to offset a base production decline of 26-28% [4][23][25] Production and Financial Performance - Production volumes for Q3 2025 averaged 129,762 boe/d, with natural gas at 684.9 MMcf/d and NGLs at 15,611 bbls/d, reflecting an 8% increase year over year [4][5] - Funds from operations (FFO) reached $198.9 million, or $0.98 per diluted share, with free funds flow of $69.1 million for the quarter [4][5] - The realized natural gas price after hedging was $3.57/Mcf, significantly higher than the AECO 7A index, which averaged $0.94/GJ [4][10] Capital Expenditures and Drilling Activity - Total capital expenditures for Q3 2025 were $126.3 million, with 20 wells drilled and 18 brought on production [4][6][7] - The company has contracted a fifth rig to enhance drilling activity, focusing on prolific zones in the Notikewin, Falher, and Bluesky formations [6][7] Hedging and Market Diversification - Peyto's hedging strategy secured over $715 million in revenue for 2026, with a hedge position protecting approximately 450 MMcf/d of natural gas production at over $4/Mcf [4][10][15] - The company has diversified its market exposure, which contributed to a realized natural gas price significantly above the AECO benchmark [10][17] Financial Health and Debt Management - Net debt was reduced by $20.5 million in Q3 2025, totaling $1.22 billion at the end of the quarter, down from $1.36 billion a year earlier [4][5][46] - The company amended and extended its credit facilities, increasing the revolving credit facility to $1.05 billion and extending the maturity date to October 2029 [21][22] Future Outlook - Peyto remains optimistic about the natural gas market, anticipating increased demand driven by electrification and LNG exports [27][28] - The company plans to maintain a disciplined approach to capital expenditures and hedging to support shareholder returns and balance sheet strength [28][32]