Author Topic: PEY.TO - Peyto Exploration & Development  (Read 20299 times)

ValuePadawan

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Re: PEY.TO - Peyto Exploration & Development
« Reply #60 on: March 09, 2020, 11:23:44 AM »
Iím betting on survival, but thereís risk.

Interesting I was wondering if you thought if it got really bad if Peyto could sell assets to pay down debt? Or in this market would there be no buyers?

Asset prices are low (they commented on the call that they've never seen Crown land auctions so low), so no, my guess is if they have to sell then the equity is a 0. In fact, they are in buying mode.

The key is that after several years of not investing to grow, decline rates have come down a ton and are now likely in the low 20% range (depending how much they invest this year. That really helps with cash generation. They can also cut the divi. So if they really wanted to pay down debt they could do so at a serious rate, without letting go of any assets that might be valuable in the future.

Gotcha thanks for sharing your opinion I appreciate it


mcliu

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Re: PEY.TO - Peyto Exploration & Development
« Reply #61 on: March 09, 2020, 12:01:15 PM »
I would be surprised if they have capacity to buy. They're over-levered as is, and nobody's lending in this environment. They'll need to focus on rolling over debt.

petec

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Re: PEY.TO - Peyto Exploration & Development
« Reply #62 on: March 09, 2020, 01:03:58 PM »
I would be surprised if they have capacity to buy. They're over-levered as is, and nobody's lending in this environment. They'll need to focus on rolling over debt.

They are buying land. Itís on the call.
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mcliu

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Re: PEY.TO - Peyto Exploration & Development
« Reply #63 on: March 09, 2020, 01:46:03 PM »
I would be surprised if they have capacity to buy. They're over-levered as is, and nobody's lending in this environment. They'll need to focus on rolling over debt.

They are buying land. Itís on the call.

Okay, my bad, yes land purchases can be done. I meant they probably don't have the balance sheet to acquire other companies.

petec

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Re: PEY.TO - Peyto Exploration & Development
« Reply #64 on: March 09, 2020, 02:18:54 PM »
I would be surprised if they have capacity to buy. They're over-levered as is, and nobody's lending in this environment. They'll need to focus on rolling over debt.

They are buying land. Itís on the call.

Okay, my bad, yes land purchases can be done. I meant they probably don't have the balance sheet to acquire other companies.

Agreed although interestingly they didn't rule it out on the call, which I found odd.
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ValuePadawan

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Re: PEY.TO - Peyto Exploration & Development
« Reply #65 on: March 09, 2020, 02:44:30 PM »
If NGL prices drop from where they were last year $43-$44 to $28-30 this year and volumes of liquids remain similar to last year they would make $50M less from NGLs and with already low profits that 50M is critical to repay debt. I think they should cut the dividend wholesale and focus on debt and if things turn around maybe small amounts of buybacks.

bizaro86

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Re: PEY.TO - Peyto Exploration & Development
« Reply #66 on: March 09, 2020, 03:41:18 PM »
I would be surprised if they have capacity to buy. They're over-levered as is, and nobody's lending in this environment. They'll need to focus on rolling over debt.

They are buying land. Itís on the call.

Okay, my bad, yes land purchases can be done. I meant they probably don't have the balance sheet to acquire other companies.

Agreed although interestingly they didn't rule it out on the call, which I found odd.

That IS interesting. Everyone I've ever talked to at Peyto is always so proud about how they never do acquisitions (only 1 small one very early on in entire corporate history)

NewValueinvestor

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Re: PEY.TO - Peyto Exploration & Development
« Reply #67 on: March 19, 2020, 06:43:55 PM »
If NGL prices drop from where they were last year $43-$44 to $28-30 this year and volumes of liquids remain similar to last year they would make $50M less from NGLs and with already low profits that 50M is critical to repay debt. I think they should cut the dividend wholesale and focus on debt and if things turn around maybe small amounts of buybacks.

I just Bought this stock a few days ago after looking at it's statements and thought it was a great buy at 1.04$ but if their revenues drop so much it could be a huge hit and possibly breach their debt covenants and create forced selling of assets into a down market.

In this market sentiment I'm not even sure if they can issue equity without massively diluting the equity at a firesale.

I thought it was a great opportunity but reading replys here I'm kind of antsy. It looks like PEY is pretty much a call option on natural gas.

petec

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Re: PEY.TO - Peyto Exploration & Development
« Reply #68 on: March 19, 2020, 07:41:29 PM »
If NGL prices drop from where they were last year $43-$44 to $28-30 this year and volumes of liquids remain similar to last year they would make $50M less from NGLs and with already low profits that 50M is critical to repay debt. I think they should cut the dividend wholesale and focus on debt and if things turn around maybe small amounts of buybacks.

I just Bought this stock a few days ago after looking at it's statements and thought it was a great buy at 1.04$ but if their revenues drop so much it could be a huge hit and possibly breach their debt covenants and create forced selling of assets into a down market.

In this market sentiment I'm not even sure if they can issue equity without massively diluting the equity at a firesale.

I thought it was a great opportunity but reading replys here I'm kind of antsy. It looks like PEY is pretty much a call option on natural gas.

Itís a levered gas E&P. What else would it be?
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