Canada’s Peyto Bounces Back in Q4
Canadian Deep Basin producer Peyto Exploration & Development bounced back in Q4 2020, registering net earnings of C$66 (US$52.2)mn after absorbing a Q3 2020 net loss of C$11.3mn, it said March 4.
It was the company’s only profitable quarter in 2020; on the year, it had a net loss of C$35.6mn against 2019 earnings of C$133.5mn.
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The Covid-19 pandemic, Peyto noted, affected global hydrocarbon demand and “severely impacted” commodity prices for the year, producing the lowest combined natural gas and liquids price – C$2.23/’000 ft3-equivalent – the company has experienced in its 22-year history.
“Despite posting a C$0.40/share profit in the fourth quarter of 2020, the company recorded its first annual loss in 21 years ($0.22/share loss),” it said. “Thankfully, the effect of the Covid-19 pandemic appears to be coming to an end and commodity prices have significantly improved, setting the stage for a much brighter future in 2021.”
Natural gas production in Q4 averaged 433.3mn ft3/day, up 9%, while liquids production was steady at about 11,200 b/d. For the year, gas production was off 2%, to 409.6mn ft3/day, while liquids output rose 4%, to 11,308 b/d.
Peyto is expecting late-2020 momentum in gas markets to continue in 2021, and remains optimistic that improving commodity prices and lower market diversification costs will “substantially increase” funds flow beyond the budgeted capital program of C$325-$350mn.
“This free cashflow, when realized, will be initially used to reduce indebtedness, and subsequently strengthen Peyto’s balance sheet while the company continues to consider its ability to increase dividends to shareholders,” it said.