Peyto Exploration & Develop. (PEY.TO) Buy,…

Peyto Exploration & Develop. (PEY.TO)

25.41

-0.00 (0.00%)

as of Oct 28, 2026, 8:00:00 pm Market Closed.

322 watching

COMMENT

One of the lowest cost producers. Difficulty past year has been debt so had to do a stock issue. Also growing very quickly and declines were very high but are starting to slow down. Still trying to understand how they will look in 2011. Currently doesn't have balance sheet strength to grow. Could see another 15%-20% decline. Because of hedging, distribution should be safe but it could be cut for their financial stability. This could give a buying opportunity.

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HOLD

Has one of the longest reserve lives of royalty trusts. Gas weighted so distribution is potentially at risk, especially if he is right and gas prices stay down for 1 or 2 years. No balance sheet issues. Could be acquired.

PAST TOP PICK

(A Top Pick June 4/08. Down 38.51%.) Sold this last fall. Major gas play. Have grown their reserves through the drill bit. Possibility of distributions being cut.

SELL

Very gas weighted. Originally it was very much of a growth story and people were paying for growth. Their operation is tight gas giving very high initial production rate but very steep declines. Need a lot of capital to fund their growth so are a little bit stretched on the balance sheet. Well hedged through 2009 so we should be able to maintain distributions if gas prices improve. Good quality assets. Consider selling and coming back in at a lower level.

DON'T BUY

This is a gas play. Great divergence of opinion on whether this is where you want to be positioned. Could cut the distribution to protect capital. 2-3 years oil and gas have nowhere to go but up.

DON'T BUY

Primarily natural gas, which is not his favourite commodity. Concerns about their debt levels.

BUY

(Market Call Minute.) Have a good level of leverage.

DON'T BUY

(Market Call Minute.) Her outlook on gas is unfavourable and is going to be quite weak for the rest of 2009. Would prefer and oilier name.

DON'T BUY

(Market Call Minute.) Debt levels are too high.

DON'T BUY

Yield of about 17.5%, which is telling you that it is somewhat chancy. Despite forecasts of reductions in cash for distribution, it is still running ahead of the $1.80 so there is a bit of a cushion. Thinks there are others that are more attractive.

BUY

(Market Call Minute.) 20 years reserve life. Great asset for any oil sands miner looking to have a stable source of natural gas.

BUY

In terms of gas exposure, distributions and payout ratio is one of the best out there. When they convert into a regular company in 2011, he thinks they will get back on track. 10.6% yield.

COMMENT

Mainly a gas producer. Had a dramatic growth rate in the early years. Low debt level. There are other trusts that are more attractive. Not a bad place to be.

BUY

Yield is not that great but on the other hand, with the tax pools they have, you are not looking at taxes any time soon.

TOP PICK

Natural gas. Have touched only 25% of their undeveloped acreage. Grow reserves from drill bit rather than acquisition. Tax pools probably keep them out of a taxable position until 2014/2015. Looking for distributions to increase. Capital gain will only be 4% or 5% and the rest of it will be distributions.

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Peyto Exploration & Develop. (PEY.TO)