Peyto Delivers Strong Reserves Additions in 2025

Core Insights - Peyto Exploration & Development Corp. has released its independent reserves report effective December 31, 2025, marking 27 years of successful reserves development [1] - The company reported significant growth in reserves and production, with a capital budget of $450–$500 million approved for 2026 to offset a projected decline in base production [3][4] 2025 Highlights - In 2025, Peyto added 504 BCFe (84 MMboe) of new Proved Developed Producing (PDP) reserves at a Finding, Development and Acquisition (FD&A) cost of $0.94/Mcfe, the lowest in 23 years [4] - The company achieved record production in December 2025 of 145 Mboe/d, generating a capital efficiency of $9,900/boe/d [4] - The average field netback was $3.61/Mcfe ($21.66/boe), resulting in a recycle ratio of 3.8 times, the highest in 22 years [4] 2026 Capital Budget - The approved capital budget for 2026 is projected to add between 43,000 and 48,000 boe/d of new production, which will more than offset an estimated 26% to 28% decline in base production [3] - The capital program will utilize four to five drilling rigs to drill 70–80 net horizontal wells, with the remaining budget allocated for optimization and maintenance projects [3] Reserves and Valuation - Peyto's PDP reserves increased by 7% to 509 MMboe, Total Proved (TP) reserves increased by 6% to 926 MMboe, and Total Proved plus Probable (P+P) reserves also increased by 6% to 1,450 MMboe [4] - The before-tax, 10% discounted net present value (BT NPV10) of the company's reserves is $5.0 billion on a PDP basis, $6.9 billion on a TP basis, and $9.4 billion on a P+P basis [4] - The debt-adjusted BT NPV10 of the company's P+P reserves was assessed at $40 per share, with $25 per share attributable to developed reserves and $15 per share to undeveloped reserves [11] Production and Decline Rates - The company estimates a total base decline rate of approximately 26-28% for 2026, based on December 2025 production levels [22] - The Reserve Life Index (RLI) for PDP reserves remains at 10 years, while TP and P+P reserves have RLIs of 18 and 28 years, respectively [4][40] Market Diversification and Hedging - Peyto's active hedging program has secured prices for approximately 475 MMcf/d of natural gas for 2026 at an average price over $4.00/Mcf, providing significant revenue certainty [4][5] - The company's market diversification strategy to non-AECO hubs is expected to enhance revenue stability, particularly during periods of price volatility [6][7] Historical Performance - Over the past 27 years, Peyto has invested a total of $9.4 billion in the Canadian economy, developing 7.2 TCFe of total developed natural gas and associated liquids at an average cost of $1.31/Mcfe [10] - The company has consistently delivered a compound annual growth rate (CAGR) of 20% in PDP reserves per share since inception [4]