Peyto Reports Third Quarter Results and Preliminary 2026 Capital Program
Executive Summary
- Peyto reported record Q3 2025 funds from operations of $198.9 M ($0.98 per diluted share) and earnings of $90.7 M ($0.45 per diluted share).
- Production averaged 129,762 boe/d (up 8% YoY); cash costs fell to $1.21/MCf, delivering a 72% operating margin and 29% profit margin.
- The company announced a credit‑facility amendment increasing the revolving line to $1.05 B and a preliminary 2026 capital budget of $450–$500 M aimed at adding 43–48 k boe/d of new production.
Key Details
- Financial Performance
- Funds from operations (FFO): $198.9 M vs. $154.5 M YoY (+29%).
- Free funds flow: $69.1 M (up from $26.7 M YoY).
- Net earnings: $90.7 M vs. $51.0 M YoY (+78%).
- Dividends paid: $66.4 M ($0.33 per share), total payout ratio 99%.
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Net debt reduced by $20.5 M to $1.22 B.
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Production & Operations
- Average production Q3 2025: 129,762 boe/d (684.9 MMcf/d gas, 15,611 bbl/d NGLs).
- Year‑over‑year production increase: +8% (gas +7%, NGLs +15%).
- Drilled 20 horizontal wells (10 Notikewin, 3 Wilrich, 3 Falher, 2 Viking, 2 Bluesky); completed 16; brought 18 on production.
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Total well‑related capex: $92.6 M; gathering & processing capex: $33.3 M (incl. new Sundance compressor).
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Cost & Margin Metrics
- Cash costs: $1.21/MCf (down 16% YoY).
- Operating margin: 72%; profit margin: 29%.
- Net sales price: $4.31/MCf (10% higher YoY).
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Field netback: $3.45/MCf; cash netback: $3.14/MCf.
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Hedging & Pricing
- Realized natural‑gas price after hedging/diversification: $3.57/Mcf (3.3 × AECO 7A).
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Hedging gains: $89.2 M; total hedge position Q4 2025 – 450 MMcf/d at $4.36/Mcf fixed price.
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Credit Facility
- Revolving credit facility increased to $1.05 B; maturity extended to Oct 23 2029.
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$50 M term‑loan balance repaid using the new revolver; no change to borrowing costs or covenants.
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2026 Preliminary Capital Budget
- Planned spend: $450–$500 M, ~80% on well‑related activities (70–80 horizontal wells).
- Expected new production: 43–48 k boe/d, offsetting an anticipated 26–28% base‑production decline.
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Major pipeline looping project in Sundance; additional plant turnarounds and optimization projects; $13 M allocated for closure activities.
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Outlook
- Target year‑end 2025 production: ~145,000 boe/d.
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Positive long‑term natural‑gas demand outlook driven by Alberta electrification, oil‑sands growth, LNG Canada ramp‑up, and U.S. power & export expansion.
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Conference Call
- Q3 2025 results call: Nov 14 2025, 9:00 a.m. MT / 11:00 a.m. ET (webcast link provided).
Notable Quotes
“We delivered a historically strong operating margin of 72% and continue to generate robust cash flow that supports our dividend, debt reduction, and growth plans,” – Jean‑Paul Lachance, President & CEO.