Peyto enters gas supply agreement with Centrica

• Peyto Exploration & Development Corp. announced a 10-year natural gas supply agreement with Centrica Energy, effective in 2029.
• The contract commits Peyto to deliver 50,000 MMBtu of natural gas daily, priced against the European Title Transfer Facility (TTF) benchmark.
• Deliveries will occur at the AECO hub in Alberta, providing Peyto with direct LNG price exposure and diversifying sales away from traditional North American benchmarks.
• This follows a strong Q1 2026 earnings release (May 12, 2026) where Peyto reported record production of 147,513 boe/d, record FFO of $293.0 million, and a 9% dividend increase to $0.12 per share.
• Historically, Peyto has progressively expanded its hedging and diversification program, moving from domestic AECO pricing to TTF-linked contracts to mitigate regional price volatility.

• The Centrica agreement is a strategic, expected step in Peyto's long-term diversification strategy. It does not represent a sudden shift in operations or an unexpected windfall.
• The 2029 start date means the deal has no immediate impact on current cash flows or production economics. It serves as a long-term revenue stabilizer rather than a near-term catalyst.
• Pricing against TTF introduces European gas market dynamics, which can be more volatile than domestic AECO pricing. While it offers upside during European supply tightness, it also exposes Peyto to global LNG competition and macroeconomic demand shifts.
• The deal aligns with previous management commentary on diversifying into premium markets. It is a routine execution of a stated strategy rather than a material deviation.

• Peyto Exploration & Development Corp. is a Calgary-based natural gas and NGL producer focused on low-cost, high-margin plays in Alberta.
• Flagship projects include the Notikewin, Wilrich, Falher, Viking, and Bluesky formations, known for their low permeability sandstone reservoirs and minimal water production risks.
• The company emphasizes a disciplined capital allocation strategy, prioritizing low FD&A costs (record $0.94/MMcfe in 2025), high recycling ratios, and consistent shareholder returns.
• Peyto's operational model relies on horizontal drilling, advanced completion techniques, and continuous facility optimization to maintain industry-leading cost structures.