Morningstar | Peyto's Hedging Doesn't Provide Same Relief as in Quarters Past
Fourth-quarter average AECO prices increased 40% from the third quarter, but narrow-moat Peyto Exploration & Development’s natural gas realizations remained constant at CAD 2.43 per thousand cubic feet. Pricing realizations improved in line with AECO prices, but the company only recognized a CAD 0.34 hedging gain in the fourth quarter compared with CAD 0.99 in the third quarter. The stock was down almost 4% on the announcement of the lower-than-expected pricing. Peyto also reported fourth-quarter average production of 86.7 thousand barrels of oil equivalent per day, up 2% sequentially but down 20% from the year-ago quarter. Production was slightly above our expectations, driven by higher-than-expected drilling due to the increase in AECO prices.We intend to incorporate these financial and operating results in our model shortly, but for now, our CAD 8 fair value estimate and narrow moat rating are unchanged.
Peyto Energy is an unincorporated open-ended limited purpose trust established under the laws of the Province of Alberta. Through its direct and indirect subsidiaries, Co. is engaged in the acquisition, exploration, development and production of oil and natural gas in Western Canada.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.