In-Line Q1/26 Results; Benefits of Consistent Hedging Shine Through

研报英文原文证据摘录

In-Line Q1/26 Results; Benefits of Consistent Hedging Shine Through

estimate the company will be able to fund its capital program and new dividend

CFPS $4.24 $4.90↓ $4.63↓

down to roughly NYMEX US$2.50/mcf in 2027 (assuming strip for liquids/gas basises).

EBITDA $1,006 $1,216↓ $1,147↓

Who wouldn't want to hedge? AECO 7A prices averaged ~$2.70/mcf in the quarter,

but Peyto's hedges ($0.37/mcf benefit) and marketing activities ($1.61/mcf benefit) Oil & Liq (b/d) 16,047 17,754↑ 19,107

resulted in an average realized gas price of ~$4.70/mcf. The company has ~515 mmcf/ NGas (MMcf/d) 708 768 808

d (~60% of gas volumes) hedged from Q2-Q4/26 at an average price of $3.96, and ~350 Consensus Estimates

mmcf/d (~40%) hedged in 2027 at $3.35/mcf. We would highlight that in 2027/2028, 2025A 2026E 2027E

Peyto has ~55/140 mmcf/d of NYMEX:AECO basis swaps in place (average price of

CFPS $4.88 $4.50

US$0.92/US$1.05), which it can marry with NYMEX swaps. With fixed hedges set to fall

Valuationoff materially by 2028 (only ~26 mmcf/d fixed), this offers the company an option to

lock in AECO hedges at an attractive price. Note that Cal27/28 basis is currently sitting at 2025A 2026E 2027E

~US$1.75/mcf. EV/EBITDA 6.3x 5.1x 5.2x

Activity update. PEY achieved record volumes as it had 5 rigs running throughout P/E 12.4x 10.0x 11.6x

Q1/26, primarily targeting the Notikewin, Falher and Wilrich formations. Alongside D/CF 1.3x 0.8x 0.7x

spring break-up, the company has dropped to two rigs but will ramp back up to 4-5 QTR. CFPS Q1 Q2 Q3 Q4

afterwards. The company plans to target higher liquids locations in the Falher (~35 bbl/

2025A $1.12 $0.95 $0.98 $1.19

mmcf) and Cardium (~60 bbl/mmcf) formations post break-up.

2026E $1.41a $1.07 $1.14 $1.28

Key Changes 2027E $1.21 $0.99 $1.09 $1.33