Peyto Delivers Strong Reserves Additions in 2025

Executive Summary

• Peyto released its independent reserves evaluation for year‑ended 31 Dec 2025, showing a record addition of 504 BCFₑ (84 MMboe) of Proved Developed Producing (PDP) reserves at an FD&A cost of $0.94/MCf – the lowest in 23 years.
• FY 2025 capital spending was $475 M, funded 55 % by funds from operations; the company returned $265 M to shareholders as dividends and reduced net debt by $170 M.
• The Board approved a 2026 capital budget of $450‑$500 M, targeting 43–48 kboe/d of new production and offsetting an expected 26‑28 % decline in base production.

Key Details

• Reserves Growth (2025)
• PDP reserves ↑ 7 % to 509 MMboe; Total Proved ↑ 6 % to 926 MMboe; P+P ↑ 6 % to 1,450 MMboe.
• FD&A costs: PDP $0.94/MCf ($5.66/boe), TP $0.96/MCf, P+P $0.83/MCf.

• Recycle ratios: PDP 3.8× (2.9× excl. hedges); TP 3.7×; P+P 4.3×.

• Financial Highlights

• Capital investment: $475 M (55 % from operations).
• Dividends paid: $265 M.
• Net debt reduced by $170 M to $1.18 B.

• BT‑NPV₁₀ (debt‑adjusted) per share: PDP $19, TP $28, P+P $40 (using 3CA price forecast).

• Production & Efficiency

• Record Dec 2025 production: 145 Mboe/d (763 MMcf/d gas, 18,270 bbl/d NGLs).
• Capital efficiency: $9,900/boe/d.

• Field netback: $3.61/MCf ($21.66/boe).

• 2026 Capital Program

• Budget: $450‑$500 M.
• Planned new production: 43–48 kboe/d by year‑end.
• Drilling plan: 70‑80 net horizontal wells (≈80 % of budget).

• Hedge book: ~475 MMcf/d gas locked at >$4.00/MCf, providing >$830 M fixed revenue.

• Future Undeveloped Reserves

• Gross future locations: 1,636 (1,070 PDP, 566 P+P).
• Estimated undeveloped inventory: 4.8 TCF gas / 111 MMbbl NGLs; capital required $5.9 B.

• Projected BT‑NPV₁₀ from future development: $15 per share (debt‑adjusted).

• Risk & Mitigation

• Low‑permeability sandstone reservoirs with minimal water production risk.
• Active market diversification and systematic hedging reduce commodity price exposure.
• 95 % of wells owned/controlled; abandonment plan includes $13 M spend in 2026.

Notable Quotes

• “Our lowest FD&A cost in 23 years, record production, and a robust hedge book give us confidence that we can sustain growth while delivering strong returns to shareholders.” – Jean‑Paul Lachance, President & CEO

Materiality: Material – Positive (significant reserve additions, dividend payout, debt reduction, and forward‑looking capital plan).