Canada’s Peyto reverses Q2 loss
Canadian Deep Basin producer Peyto Exploration & Development said August 11 higher production and surging commodity prices helped it reverse a second quarter loss, with earnings of C$12.8mn (US$10.2mn) in Q2 2021 against a loss of C$22.5mn in the year-ago period.
Revenue, net of realised hedging losses, nearly doubled, to C$140.5mn from C$73.9mn, while cash flows from operating activities increased 137% yr/yr, to C$85.9mn from C$36.2mn. With capital expenditures climbing 53%, to C$57.1mn, free cash flow recovered to C$28.8mn from a negative position of C$1.05mn.
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Total production in the quarter averaged 88,738 barrels of oil equivalent/day, up 14% year-on-year, with gas leading the way, climbing to 458.7mn ft3/d from 401.8mn ft3/d. And Peyto’s average realised price for natural gas, net of hedging and market diversification costs, jumped to C$2.06/’000 ft3 from C$1.44/’000 ft3in Q2 2020.
Without the diversification costs and hedging losses, Peyto’s realised natural gas price in Q2 would have reached C$3.68/’000 ft3. Those realised price impacts are expected to diminish by early next year as some high cost basis deals expire, it said.