Peyto Exploration & Development (PEY) Q1 2026 earnings summary

Executive summary

• Achieved record-breaking Q1 2026 production of 148,000 BOEs/day, up 10% year-over-year, with record funds from operations and earnings per share.

• Funds from operations reached CAD 293 million (CAD 1.41/share), up 30% year-over-year, and net earnings were CAD 171 million (CAD 0.82/share), a 44% increase.

• Successfully navigated market volatility and operational challenges with a focus on execution.

• Monthly dividend increased by 9% to CAD 0.12/share, effective May 2026, reflecting confidence in financial strength.

• Net debt reduced by CAD 89 million in Q1, with leverage ratio down to 1.0x EBITDA.

Financial highlights

• Production averaged 147,500 BOEs/day for Q1, up 10% year-over-year or 7% per share.

• Natural gas and NGL sales including hedging gains totaled CAD 429.6 million, up 21% year-over-year.

• Operating margin at 77% and profit margin at 39%, the highest in the last decade.

• Cash costs were CAD 1.28/Mcfe, down 10% year-over-year, driven by lower interest, royalties, and operating costs.

• Realized gas price was CAD 4.69/Mcf, 73% above AECO monthly average, aided by hedging and market diversification.

Outlook and guidance

• Capital investment planned at CAD 450–500 million for 2026, targeting 70–80 net wells and 43,000–48,000 BOE/d of new production by year-end.

• Hedging program secures over CAD 715 million of revenue for the remainder of 2026 and CAD 510 million for 2027.

• Drilling program shifted toward more liquid-rich zones to enhance liquids production.

• 70% of summer gas volumes hedged at just under CAD 4/Mcf, minimizing spot AECO exposure.

• Management expects continued debt repayment and dividend sustainability, even if natural gas prices weaken.