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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Orecap Invest Corp | TSXV:OCI | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.06 | 0.055 | 0.06 | 0.06 | 0.06 | 0.06 | 119,000 | 17:36:43 |
Hot Features
Premium
Peyto Exploration & Development Corp. ("Peyto") (TSX:PEY) is pleased to present
its operating and financial results for the first quarter of the 2013 fiscal
year. Peyto's production per share grew for the fourteenth consecutive quarter
with first quarter operating margins of 77%(1) and profit margins of 27%(2).
First quarter 2013 highlights were as follows:
-- Production per share up 26%. First quarter 2013 production increased 35%
(26% per share) from 245 MMcfe/d (40,903 boe/d) in Q1 2012 to 332
MMcfe/d (55,372 boe/d) in Q1 2013.
-- Funds from operations of $0.69/share. Generated a company record $103
million in Funds from Operations ("FFO") in Q1 2013 up 32% (23% per
share) from $78 million in Q1 2012 due to increased production volumes.
-- Operating costs less than $2/boe. Industry leading operating costs were
further reduced from $0.33/mcfe ($1.96/boe) in Q1 2012 to $0.31/mcfe
($1.87/boe) in Q1 2013. Total cash costs, including royalties, operating
costs, transportation, G&A and interest were $1.02/mcfe ($6.10/boe),
resulting in a $3.44/mcfe ($20.64/boe) cash netback or 77% operating
margin.
-- Capital investment of $169 million. An organic capital program of $169
million was executed in the quarter resulting in production additions of
10,300 boe/d at quarter end. The annualized cost (trailing twelve
months) to build new production was $18,900/boe/d (including capital for
Peyto's enhanced liquids extraction facilities but excluding the Open
Range acquisition). A total of 31 gross wells were drilled during the
first quarter.
-- Earnings of $0.25/share, dividends of $0.18/share. Earnings of $36
million were generated in the quarter while dividends of $27 million
were paid to shareholders, representing a before tax payout ratio of 26%
of FFO.
-- Dividend increase to $0.08/share. The Board of Directors has approved a
dividend increase of $0.02/share, starting in May 2013, to be paid on
June 14, 2013 to shareholders of record as of May 31, 2013.
(1) Operating Margin is defined as funds from operations divided by revenue
before royalties but including realized hedging gains/losses.
(2) Profit Margin is defined as net earnings for the quarter divided by
revenue before royalties but including realized hedging gains/losses.
Natural gas volumes recorded in thousand cubic feet (mcf) are converted to
barrels of oil equivalent (boe) using the ratio of six (6) thousand cubic
feet to one (1) barrel of oil (bbl). Natural gas liquids and oil volumes in
barrel of oil (bbl) are converted to thousand cubic feet equivalent (Mcfe)
using a ratio of one (1) barrel of oil to six (6) thousand cubic feet. This
could be misleading, particularily if used in isolation as it is based on an
energy equivalency conversion method primarily applied at the burner tip and
does not represent a value equivalency at the wellhead.
First Quarter 2013 in Review
The first quarter of 2013 was a continuation from the fourth quarter of 2012,
with record levels of capital invested into the exploration and development of
Peyto's Deep Basin resource plays. As a result, production continued to grow
throughout the quarter while a strict focus on maintaining industry leading cash
costs ensured funds from operations also grew proportionately. Peyto's realized
natural gas prices were similar to the first quarter of 2012, although less
supported by hedging gains, while realized liquids prices were down 10%. Despite
the improvement in underlying natural gas prices, North American drilling
activity did not increase, allowing Peyto to continue building and developing
new production at its industry leading capital efficiencies. The enhanced
liquids extraction facilities at Peyto's Oldman gas plant became fully
operational at the start of the quarter, achieving the designed process
temperatures and additional liquid recoveries, and thus increasing the price
Peyto realizes for its production stream. Subsequent to the quarter, Peyto
replaced its secured borrowing base revolving bank facility with an unsecured
covenant based facility with 37% greater borrowing capacity. This new credit
facility gives Peyto the ability to pursue even more opportunities at a lower
cost of capital. At quarter end, 65% of the new borrowing capacity of $1.15
billion was utilized resulting in a net debt to annualized FFO ratio of 1.8
times. The strong financial and operating performance delivered in the quarter
resulted in an annualized 12% Return on Equity (ROE) and 10% Return on Capital
Employed (ROCE).
----------------------------------------------------------------------------
3 Months Ended Mar. 31 %
2013 2012 Change
----------------------------------------------------------------------------
Operations
Production
Natural gas (mcf/d) 297,191 220,811 35%
Oil & NGLs (bbl/d) 5,840 4,101 42%
Thousand cubic feet equivalent (mcfe/d
@ 1:6) 332,230 245,417 35%
Barrels of oil equivalent (boe/d @
6:1) 55,372 40,903 35%
Product prices
Natural gas ($/mcf) 3.49 3.53 (1)%
Oil & NGLs ($/bbl) 75.88 84.83 (11)%
Operating expenses ($/mcfe) 0.31 0.33 (6)%
Transportation ($/mcfe) 0.12 0.12 -
Field netback ($/mcfe) 3.67 3.75 (2)%
General & administrative expenses
($/mcfe) 0.02 0.04 (50)%
Interest expense ($/mcfe) 0.21 0.23 (9)%
Financial ($000, except per share)
Revenue 133,203 102,496 30%
Royalties 10,591 8,835 20%
Funds from operations 102,856 77,645 32%
Funds from operations per share 0.69 0.56 23%
Total dividends 26,766 24,912 7%
Total dividends per share 0.18 0.18 -
Payout ratio 26 32 (19)%
Earnings 36,405 26,868 35%
Earnings per diluted share 0.25 0.19 32%
Capital expenditures 169,099 98,632 71%
Weighted average common shares
outstanding 148,672,664 138,312,078 7%
As at March 31
Net debt (before future compensation
expense and unrealized hedging gains) 749,546 512,627 46%
Shareholders' equity 1,197,254 1,027,231 17%
Total assets 2,281,287 1,800,394 27%
----------------------------------------------------------------------------
Three Months ended Mar. 31
($000) 2013 2012
----------------------------------------------------------------------------
Cash flows from operating activities 92,543 59,383
Change in non-cash working capital 7,775 16,367
Change in provision for performance based
compensation 2,538 1,895
----------------------------------------------------------------------------
Funds from operations 102,856 77,645
----------------------------------------------------------------------------
Funds from operations per share 0.69 0.56
----------------------------------------------------------------------------
(1) Funds from operations - Management uses funds from operations to analyze
the operating performance of its energy assets. In order to facilitate
comparative analysis, funds from operations is defined throughout this
report as earnings before performance based compensation, non-cash and
non-recurring expenses. Management believes that funds from operations
is an important parameter to measure the value of an asset when combined
with reserve life. Funds from operations is not a measure recognized by
Canadian generally accepted accounting principles ("GAAP") and does not
have a standardized meaning prescribed by GAAP. Therefore, funds from
operations, as defined by Peyto, may not be comparable to similar
measures presented by other issuers, and investors are cautioned that
funds from operations should not be construed as an alternative to net
earnings, cash flow from operating activities or other measures of
financial performance calculated in accordance with GAAP. Funds from
operations cannot be assured and future distributions may vary.
Exploration & Development
Peyto continued to explore and develop many of its liquids rich, sweet gas
resource plays in the Deep Basin throughout the first quarter of 2013. A total
of 31 wells were drilled across the land base, targeting the many prospective
zones, as shown in the following table:
Field
Total
Kisku/ Wells
Zone Sundance Nosehill Wildhay Ansell Berland Kakwa New Area Drilled
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cardium 2 1 3
Notikewin 3 2 5
Falher 4 4 1 9
Wilrich 1 1 2 3 2 2 11
Bluesky 3 3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 10 6 6 4 2 1 2 31
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The majority of the activity focused on the Notikewin, Falher and Wilrich
formations of the Spirit River group. Despite the lower natural gas liquids
yields from these deeper Spirit River formations, economic returns were still
determined to be greater due to the improved natural gas prices combined with
greater productivity and recoveries.
In particular, considerable development occurred in the Falher formation where
Peyto has now drilled 38 horizontal wells since the start of 2012 and sees
significant unbooked drilling inventory that can continue to be proven. Drilling
costs in the Falher to date have averaged $2.6 million/well, while completion
costs have averaged $1.6 million/well.
In addition, Peyto has drilled a total of six Bluesky horizontal wells since the
second quarter of 2012, helping to prove up substantial existing and future
inventory in this formation. To date, Bluesky drilling and completion costs have
averaged $2.9 million/well and $1.6 million/well, respectively.
Overall, Peyto continues to validate an ever greater inventory of profitable
drilling locations within the numerous formations across its Deep Basin lands.
Capital Expenditures
During the first quarter of 2013, Peyto spent $75.5 million to spud 31 gross
(28.3 net) horizontal wells and $41.2 million completing 25 gross (23.5 net)
wells. Wellsite equipment and tie-ins accounted for $14.6 million, while a total
of $36.0 million was invested in new pipelines and facilities including the
balance of capital for the Oldman gas plant Deep Cut equipment. New lands were
acquired for $0.8 million, or $373/acre, while new seismic accounted for $1.0
million.
In the quarter, 25 gross (23.1 net) wells were brought onstream which
contributed 10,300 boe/d to the quarter end exit rate of 59,000 boe/d. Pipeline
and facility capital of $36.0 million included the addition of one compressor
each to the Wildhay and Nosehill gas plants; the construction of a strategically
located 47 km pipeline from Peyto's Ansell property to its Swanson gas plant;
the installation of natural gas fired power generation equipment at the Oldman
gas plant; and the completion of the Oldman natural gas liquids ("NGLs")
extraction facilities. These newly installed Deep Cut facilities are performing
as designed, achieving process temperatures ranging from -75C to -80C and
recovering an additional 12 to 15 bbl of high value NGLs per MMcf of sales gas.
Financial Results
Alberta monthly natural gas prices averaged $2.91/GJ in the first quarter 2013,
resulting in a Peyto unhedged realized price of $3.31/mcf before hedging gains
of $0.18/mcf. Meanwhile, Edmonton light oil prices averaged $88.60/bbl from
which Peyto realized $75.72/bbl, before hedging gains of $0.16/bbl, for its
natural gas liquids blend of condensate, pentane, butane and propane. Combined,
Peyto's unhedged revenues totaled $4.30/mcfe ($4.46/mcfe including hedging
gains), or 153% of the dry gas price, illustrating the benefit of high heat
content, liquids rich natural gas production.
Royalties of $0.36/mcfe, operating costs of $0.31/mcfe, transportation costs of
$0.12/mcfe, G&A of $0.02/mcfe and interest costs of $0.21/mcfe, combined for
total cash costs of $1.02/mcfe. These industry leading total cash costs resulted
in a cash netback of $3.44/mcfe or a 77% operating margin.
Depletion, depreciation and amortization charges of $1.73/mcfe, along with a
provision for future tax and market based bonus payments reduced the cash
netback to earnings of $1.22/mcfe, or a 27% profit margin.
Subsequent to the end of the first quarter, Peyto's $730 million credit facility
was reviewed and the annual secured revolver was replaced by a $1.0 billion, two
year, covenant based unsecured revolver. This increase in borrowing capacity was
a reflection of the 2012 growth in volume and value of Peyto's Proved Producing
reserves, as well as a reflection of the company's efficiency with which
reserves are developed, produced and sold. The unsecured revolver contains the
same financial covenants as the previous secured revolver (see the Management's
Discussion & Analysis for a description of the covenants). Including the $150
million of senior unsecured notes, Peyto's total borrowing capacity increased to
$1.15 billion.
Marketing
The first quarter 2013 AECO daily natural gas prices were 50% higher than the
same period in 2012 due to a more balanced supply demand situation in North
America coupled with more typical winter weather. March weather, however, was
colder than normal and resulted in record volumes of gas being withdrawn from
storage reservoirs, further driving up the natural gas price in both the US and
Canada.
Despite this recovery in current natural gas prices, the price offered for
future supplies has not increased materially since a year ago. AECO and NYMEX
futures up to five years out are only 20% higher than today's price, indicating
that natural gas supplies in North America, including those in the prolific US
shale plays, will be sufficient to meet current demand growth projections.
The company's hedging practice of layering in future sales in the form of fixed
price swaps, in order to smooth out the volatility in natural gas price,
continued throughout the quarter. As at March 31, 2013, Peyto had committed to
the future sale of 82,627,500 gigajoules (GJ) of natural gas at an average price
of $3.23/GJ or $3.71/mcf, based on Peyto's historical heat content. As at May 8,
2013, the remaining hedged volumes and prices for the upcoming years are
summarized in the following table.
----------------------------------------------------------------------------
Future Sales Average Price (CAD)
----------------------------------------------------------------------------
GJ Mcf $/GJ $/Mcf
----------------------------------------------------------------------------
2013 47,322,500 41,150,000 3.22 3.70
2014 33,485,000 29,117,391 3.30 3.80
2015 450,000 391,304 3.60 4.14
----------------------------------------------------------------------------
Total 81,257,500 70,658,696 3.26 3.74
----------------------------------------------------------------------------
As illustrated in the following table, Peyto's unhedged realized natural gas
liquids prices (1) were down 11% year over year but up 4% from the previous
quarter.
----------------------------------------------------------------------------
Three Months ended March 31 Q4
2013 2012 2012
----------------------------------------------------------------------------
Condensate ($/bbl) 96.63 100.09 91.22
Propane ($/bbl) 26.75 31.86 25.58
Butane ($/bbl) 61.40 69.17 63.38
Pentane ($/bbl) 107.13 102.92 94.34
----------------------------------------------------------------------------
Total Oil and NGLs ($/bbl) 75.72 84.83 73.12
----------------------------------------------------------------------------
(1) Liquids prices are Peyto realized prices in Canadian dollars adjusted
for fractionation and transportation.
Peyto's hedging practice with respect to propane also continued in the quarter
and as at March 31, 2013, Peyto had committed to the future sale of 288,000 bbls
of propane at an average price of $34.61USD/bbl. As at May 8, 2013, the
remaining hedged volumes and prices for the upcoming years are summarized in the
following table.
----------------------------------------------------------------------------
Propane
----------------------------------------------------------------------------
Future Sales (bbls) Average Price ($USD/bbl)
----------------------------------------------------------------------------
2013 168,000 33.60
2014 96,000 36.59
----------------------------------------------------------------------------
Total 264,000 34.69
----------------------------------------------------------------------------
Activity Update
Peyto has concluded all of its drilling and completion activities leading up to
this year's spring break-up period. Current production levels have ranged from
60,000 to 61,000 boe/d with new 2013 wells contributing 13,000 boe/d.
During April, 10 gross wells (9.5 net) were completed and brought onstream.
Additionally, 6 gross wells (5.5 net) have finished drilling and await
completion and/or tie in which will occur after break-up. Two wells were
suspended at an intermediate stage of drilling operations due to spring
break-up. Resumption of drilling, completion and tie in activity is anticipated
for the last week of May.
The estimated production additions for the 6 wells awaiting completion and/or
tie in, as well as one other previously drilled well in a new area, amount to
greater than 5,000 boe/d.
Peyto is planning for the continuation of an active 10 rig drilling program
after the breakup period. In order to accommodate the growth in production
anticipated from this activity, equipment is currently being fabricated for
three key facility projects. The first includes a new gas plant adjacent to the
Oldman facility (Oldman North) that is being designed for an eventual 80 MMcf/d
of capacity by the end of 2014. The facility will be brought on with initial
compression totalling 30 MMcf/d and with an estimated start-up of September,
2013. The second is a 30 MMcf/d expansion to Peyto's Swanson gas plant which has
been filled to its current 30 MMcf/d capacity over Q1 of this year. The
estimated timing for that project is also September/October of 2013. The final
facility project is a new plant contemplated for startup at the end of 2013 in a
new area of development. It is being built for an initial capacity of
approximately 20 MMcf/d but is fully expandable with continued development
drilling success.
Dividend Increase
In keeping with Peyto's total return model, profitable growth in the Company's
assets should ultimately yield growth in sustainable dividends for shareholders.
Since the conversion back to a dividend paying, growth corporation at the end of
2010, when the current $0.06/month dividend rate was set, Peyto has increased
production per share by 70% and grown proved plus probable additional reserves
per share by over 30%. Over the same period, and despite lower natural gas
prices, funds from operations per share also increased 30%. The strength of the
Company's balance sheet has also improved over that time, with greater access to
capital and at a lower cost, ensuring future capital programs can continue to be
adequately funded.
Based on this recent profitable growth and financial strength, the Board of
Directors of Peyto has approved a $0.02/share increase to the monthly dividend
starting in May 2013.
Outlook
With the largest capital program in the company's history well underway, 2013
looks to be another record breaking year for Peyto. Near term natural gas prices
have improved, driving returns on this capital even higher, while at the same
time industry activity remains low, keeping costs down and ensuring services are
readily available. Peyto's low cost advantage, which yields high operating and
profit margins, ensures the growth in assets resulting from this capital program
is profitable growth. Peyto's disciplined, returns driven, low cost strategy
continues to reward investors willing to look beyond just the natural gas
commodity to a profitable energy business with a clear vision for the future.
Conference Call and Webcast
A conference call will be held with the senior management of Peyto to answer
questions with respect to the 2013 first quarter financial results on Thursday,
May 9th, 2013, at 9:00 a.m. Mountain Daylight Time (MDT), or 11:00 a.m. Eastern
Daylight Time (EDT). To participate, please call 1-416-340-8530 (Toronto area)
or 1-877-440-9795 for all other participants. The conference call will also be
available on replay by calling 1-905-694-9451 (Toronto area) or 1-800-408-3053
for all other parties, using passcode 9284446. The replay will be available at
11:00 a.m. MDT, 1:00 p.m. EDT Thursday, May 9th, 2013 until midnight EDT on
Thursday, May 16th, 2013. The conference call can also be accessed through the
internet at http://events.digitalmedia.telus.com/peyto/050913/index.php. After
this time the conference call will be archived on the Peyto Exploration &
Development website at www.peyto.com.
Annual General Meeting
Shareholders are invited to attend Peyto's AGM at 3:00 p.m. on Wednesday, June
5, 2013 at Livingston Place Conference Centre, +15 level, 222-3rd Avenue SW,
Calgary, Alberta.
Management's Discussion and Analysis
Management's Discussion and Analysis of this first quarter report is available
on the Peyto website at http://www.peyto.com/news/Q12013MDandA.pdf. A complete
copy of the first quarter report to shareholders, including the Management's
Discussion and Analysis, and Financial Statements is also available at
www.peyto.com and will be filed at SEDAR, www.sedar.com, at a later date.
Darren Gee, President and CEO
May 8, 2013
Certain information set forth in this document and Management's Discussion and
Analysis, including management's assessment of Peyto's future plans and
operations, capital expenditures and capital efficiencies, contains
forward-looking statements. By their nature, forward-looking statements are
subject to numerous risks and uncertainties, some of which are beyond these
parties' control, including the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency fluctuations, imprecision
of reserve estimates, environmental risks, competition from other industry
participants, the lack of availability of qualified personnel or management,
stock market volatility and ability to access sufficient capital from internal
and external sources. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance should not
be placed on forward-looking statements. Peyto's actual results, performance or
achievement could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurance can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits Peyto will derive
there from. In addition, Peyto is providing future oriented financial
information set out in this press release for the purposes of providing clarity
with respect to Peyto's strategic direction and readers are cautioned that this
information may not be appropriate for any other purpose. Other than is required
pursuant to applicable securities law, Peyto does not undertake to update
forward looking statements at any particular time.
Peyto Exploration & Development Corp.
Condensed Balance Sheet (unaudited)
(Amount in $ thousands)
March 31 December 31
2013 2012
----------------------------------------------------------------------------
Assets
Current assets
Accounts receivable 61,707 85,677
Due from private placement (Note 6) - 3,459
Financial derivative instruments (Note 8) - 10,254
Prepaid expenses 5,967 4,150
----------------------------------------------------------------------------
67,674 103,540
----------------------------------------------------------------------------
Prepaid capital - 3,714
Property, plant and equipment, net (Note 3) 2,213,713 2,096,270
----------------------------------------------------------------------------
2,213,713 2,099,984
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2,281,287 2,203,524
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 168,296 164,946
Income taxes payable - 1,890
Dividends payable (Note 6) 8,925 8,911
Financial derivative instruments (Note 8) 22,228 -
Provision for future performance based
compensation (Note 7) 4,206 2,677
----------------------------------------------------------------------------
203,655 178,424
----------------------------------------------------------------------------
Long-term debt (Note 4) 640,000 580,000
Long-term derivative financial instruments
(Note 8) 2,957 2,532
Provision for future performance based
compensation (Note 7) 1,068 59
Decommissioning provision (Note 5) 58,536 58,201
Deferred income taxes 177,917 174,241
----------------------------------------------------------------------------
880,478 815,033
----------------------------------------------------------------------------
Equity
Share capital (Note 6) 1,130,069 1,124,382
Shares to be issued (Note 6) - 3,459
Retained earnings 84,886 75,247
Accumulated other comprehensive income (loss)
(Note 6) (17,701) 6,979
----------------------------------------------------------------------------
1,197,254 1,210,067
----------------------------------------------------------------------------
2,281,387 2,203,524
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Approved by the Board of Directors
Michael MacBean, Director
Darren Gee, Director
Peyto Exploration & Development Corp.
Condensed Income Statement (unaudited)
(Amount in $ thousands)
Three months ended
March 31
2013 2012
----------------------------------------------------------------------------
Revenue
Oil and gas sales 128,424 85,221
Realized gain on hedges (Note 8) 4,779 17,275
Royalties (10,591) (8,835)
----------------------------------------------------------------------------
Petroleum and natural gas sales, net 122,612 93,661
----------------------------------------------------------------------------
Expenses
Operating 9,306 7,300
Transportation 3,659 2,606
General and administrative 481 972
Future performance based compensation (Note
7) 2,538 1,895
Interest 6,310 5,138
Accretion of decommissioning provision (Note
5) 368 257
Depletion and depreciation (Note 3) 51,625 39,673
----------------------------------------------------------------------------
74,287 57,841
----------------------------------------------------------------------------
Earnings before taxes 48,325 35,820
----------------------------------------------------------------------------
Income tax
Deferred income tax expense 11,920 8,952
----------------------------------------------------------------------------
Earnings for the period 36,405 26,868
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share (Note 6)
Basic and diluted $ 0.25 $ 0.19
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted average number of common shares
outstanding (Note 6)
Basic and diluted 148,672,664 138,312,078
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Peyto Exploration & Development Corp.
Condensed Statement of Comprehensive Income (unaudited)
(Amount in $ thousands)
Three months ended
March 31
2013 2012
----------------------------------------------------------------------------
Earnings for the period 36,405 26,868
Other comprehensive income
Change in unrealized gain on cash flow
hedges (28,128) 27,116
Deferred tax recovery (expense) 8,227 (2,460)
Realized (gain) loss on cash flow hedges (4,779) (17,275)
----------------------------------------------------------------------------
Comprehensive income 11,725 34,249
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Peyto Exploration & Development Corp.
Condensed Statement of Changes in Equity (unaudited)
(Amount in $ thousands)
Three months ended
March 31
2013 2012
----------------------------------------------------------------------------
Share capital, beginning of period 1,124,382 889,115
----------------------------------------------------------------------------
Common shares issued by private placement 5,742 11,952
Common shares issuance costs (net of tax) (55) (26)
----------------------------------------------------------------------------
Share capital, end of period 1,130,069 901,041
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Common shares to be issued, beginning of
period 3,459 9,740
----------------------------------------------------------------------------
Common shares issued (3,459) (9,740)
----------------------------------------------------------------------------
Common shares to be issued, end of period - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Retained earnings, beginning of period 75,247 82,889
----------------------------------------------------------------------------
Earnings for the period 36,405 26,868
Dividends (Note 6) (26,766) (24,912)
----------------------------------------------------------------------------
Retained earnings, end of period 84,886 84,845
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Accumulated other comprehensive income,
beginning of period 6,979 33,964
----------------------------------------------------------------------------
Other comprehensive income (loss) (24,680) 7,381
----------------------------------------------------------------------------
Accumulated other comprehensive income
(loss), end of period (17,701) 41,345
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total equity 1,197,254 1,027,231
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Peyto Exploration & Development Corp.
Condensed Statement of Cash Flows (unaudited)
(Amount in $ thousands)
The following amounts are included in cash flows from operating activities:
---------------------------------------------------------------------------
Three months ended
March 31
2013 2012
----------------------------------------------------------------------------
Cash provided by (used in)
operating activities
Earnings 36,405 26,868
Items not requiring cash:
Deferred income tax 11,920 8,952
Depletion and depreciation 51,625 39,673
Accretion of decommissioning provision 368 257
Change in non-cash working capital related
to operating activities (7,775) (16,367)
----------------------------------------------------------------------------
92,543 59,383
----------------------------------------------------------------------------
Financing activities
Issuance of common shares 5,742 11,952
Issuance costs (73) (35)
Cash dividends paid (26,752) (24,881)
Increase in bank debt 60,000 -
----------------------------------------------------------------------------
38,917 (12,964)
----------------------------------------------------------------------------
Investing activities
Additions to property, plant and equipment (131,460) (103,643)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net increase (decrease) in cash - (57,224)
Cash, Beginning of Period - 57,224
----------------------------------------------------------------------------
Cash, End of Period - -
----------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash interest paid 7,867 4,313
Cash taxes paid 1,890 -
---------------------------------------------------------------------------
Peyto Exploration & Development Corp.
Notes to Condensed Financial Statements (unaudited)
As at March 31, 2013 and 2012
(Amount in $ thousands, except as otherwise noted)
1. Nature of operations
Peyto Exploration & Development Corp. ("Peyto" or the "Company") is a Calgary
based oil and natural gas company. Peyto conducts exploration, development and
production activities in Canada. Peyto is incorporated and domiciled in the
Province of Alberta, Canada. The address of its registered office is 1500, 250 -
2nd Street SW, Calgary, Alberta, Canada, T2P 0C1.
On December 31, 2012, Peyto completed an amalgamation with its wholly-owned
subsidiary Open Range Energy Corp. pursuant to section 184(1) of the Business
Corporations Act (Alberta). Following the amalgamation, Peyto does not have any
subsidiaries.
These financial statements were approved and authorized for issuance by the
Audit Committee of Peyto on May 7, 2013.
2. Basis of presentation
The condensed financial statements have been prepared by management and reported
in Canadian dollars in accordance with International Accounting Standard ("IAS")
34, "Interim Financial Reporting". These condensed financial statements do not
include all of the information required for full annual financial statements and
should be read in conjunction with the Company's consolidated financial
statements as at and for the years ended December 31, 2012 and 2011.
Significant Accounting Policies
(a) Significant Accounting Judgments, Estimates and Assumptions
The timely preparation of the condensed financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingencies, if any, as at the date of the
financial statements and the reported amounts of revenue and expenses during the
period. By their nature, estimates are subject to measurement uncertainty and
changes in such estimates in future years could require a material change in the
condensed financial statements.
Except as disclosed below, all accounting policies and methods of computation
followed in the preparation of these financial statements are the same as those
disclosed in Note 2 of Peyto's consolidated financial statements as at and for
the years ended December 31, 2012 and 2011.
(b) Recent Accounting Pronouncements
Certain new standards, interpretations, amendments and improvements to existing
standards were issued by the International Accounting Standards Board (IASB) or
International Financial Reporting Interpretations Committee (IFRIC) that are
mandatory for accounting periods beginning January 1, 2013 or later periods. The
affected standards are consistent with those disclosed in Peyto's consolidated
financial statements as at and for the years ended December 31, 2012 and 2011.
Peyto adopted the following standards on January 1, 2013:
IFRS 10 - Consolidated Financial Statements; supercedes IAS 27 "Consolidation
and Separate Financial Statements" and SIC-12 "Consolidation - Special Purpose
Entities". This standard provides a single model to be applied in control
analysis for all investees including special purpose entities. This standard
became applicable on January 1, 2013. Peyto adopted the standard on January 1,
2013, with no impact on Peyto's financial position or results of operations.
IFRS 11 - Joint Arrangements; requires a venturer to classify its interest in a
joint arrangement as a joint venture or joint operation. Joint ventures will be
accounted for using the equity method of accounting, whereas joint operations
will require the venturer to recognize its share of the assets, liabilities,
revenue and expenses. This standard became applicable on January 1, 2013. Peyto
adopted the standard on January 1, 2013, with no impact on Peyto's financial
position or results of operations.
IFRS 12 - Disclosure of Interests in Other Entities; establishes disclosure
requirements for interests in other entities, such as joint arrangements,
associates, special purpose vehicles and off-balance-sheet vehicles. The
standard carries forward existing disclosure and also introduces significant
additional disclosure requirements that address the nature of, and risks
associated with, an entity's interests in other entities. This standard became
effective for Peyto on January 1, 2013. Peyto adopted the standard on January 1,
2013, with no impact on Peyto's financial position or results of operations.
IFRS 13 - Fair Value Measurement; defines fair value, sets out a single IFRS
framework for measuring fair value and requires disclosure about fair value
measurements. IFRS 13 applies to accounting standards that require or permit
fair value measurements or disclosure about fair value measurements (and
measurements, such as fair value less costs to sell, based on fair value or
disclosure about those measurements), except in specified circumstances. IFRS 13
became applicable on January 1, 2013. Peyto adopted the standard on January 1,
2013, with no impact on Peyto's financial position or results of operations.
3. Property, plant and equipment, net
----------------------------------------------------------------------------
Cost
----------------------------------------------------------------------------
At December 31, 2012 2,483,008
----------------------------------------------------------------------------
Additions 169,068
----------------------------------------------------------------------------
At March 31, 2013 2,652,076
----------------------------------------------------------------------------
Accumulated depreciation
----------------------------------------------------------------------------
At December 31, 2012 (386,738)
----------------------------------------------------------------------------
Depletion and depreciation (51,625)
----------------------------------------------------------------------------
At March 31, 2013 (438,363)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Carrying amount at December 31, 2012 2,096,270
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Carrying amount at March 31, 2013 2,213,713
----------------------------------------------------------------------------
----------------------------------------------------------------------------
During the period ended March 31, 2013, Peyto capitalized $2.6 million (2012 -
$1.7 million) of general and administrative expense directly attributable to
production and development activities.
4. Long-term debt
----------------------------------------------------------------------------
March 31, 2013 December 31, 2012
----------------------------------------------------------------------------
Bank credit facility 490,000 430,000
Senior secured notes 150,000 150,000
----------------------------------------------------------------------------
Balance, end of the year 640,000 580,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at March 31, 2013, the Company had a syndicated $730 million extendible
revolving credit facility with a stated term date of April 28, 2013. The bank
facility is made up of a $30 million working capital sub-tranche and a $700
million production line. The facilities are available on a revolving basis for a
period of at least 364 days and upon the term out date may be extended for a
further 364 day period at the request of the Company, subject to approval by the
lenders. In the event that the revolving period is not extended, the facility is
available on a non-revolving basis for a further one year term, at the end of
which time the facility would be due and payable. Outstanding amounts on this
facility will bear interest at rates ranging from prime plus 1.0% to prime plus
2.5% determined by the Company's debt to earnings before interest, taxes,
depreciation, depletion and amortization (EBITDA) ratios ranging from less than
1:1 to greater than 2.5:1. A General Security Agreement with a floating charge
on land registered in Alberta is held as collateral by the bank.
Subsequent to March 31, 2013, Peyto has entered into a syndicated two year,
unsecured, covenant based revolving credit facility in the amount of $1 billion
with a stated term date of April 26, 2015. The note purchase agreement
(discussed below) was amended and restated to reflect removal of security on the
Senior Notes.
On January 3, 2012, Peyto issued CDN $100 million of senior secured notes
pursuant to a note purchase and private shelf agreement. The notes were issued
by way of private placement and rank equally with Peyto's obligations under its
bank facility. The notes have a coupon rate of 4.39% and mature on January 3,
2019. Interest is paid semi-annually in arrears.
On September 6, 2012, Peyto issued CDN $50 million of senior secured notes
pursuant to a note purchase and private shelf agreement. The notes were issued
by way of private placement and rank equally with Peyto's obligations under its
bank facility. The notes have a coupon rate of 4.88% and mature on September 6,
2022. Interest is paid semi-annually in arrears.
Upon the issuance of the senior secured notes January 3, 2012, Peyto became
subject to the following financial covenants as defined in the credit facility
and note purchase and private shelf agreements:
-- Senior Debt to EBITDA Ratio will not exceed 3.0 to 1.0
-- Total Debt to EBITDA Ratio will not exceed 4.0 to 1.0
-- Interest Coverage Ratio will not be less than 3.0 to 1.0
-- Total Debt to Capitalization Ratio will not exceed 0.55:1.0
Peyto is in compliance with all financial covenants at March 31, 2013.
Total interest expense for the period ended March 31, 2013 was $6.3 million
(2012 - $5.1 million) and the average borrowing rate for the period was 4.0%
(2012 - 4.5%).
5. Decommissioning provision
Peyto makes provision for the future cost of decommissioning wells, pipelines
and facilities on a discounted basis based on the commissioning of these assets.
The decommissioning provision represents the present value of the
decommissioning costs related to the above infrastructure, which are expected to
be incurred over the economic life of the assets. The provisions have been based
on Peyto's internal estimates of the cost of decommissioning, the discount rate,
the inflation rate and the economic life of the infrastructure. Assumptions,
based on the current economic environment, have been made which management
believes are a reasonable basis upon which to estimate the future liability.
These estimates are reviewed regularly to take into account any material changes
to the assumptions. However, actual decommissioning costs will ultimately depend
upon the future market prices for the necessary decommissioning work required
which will reflect market conditions at the relevant time. Furthermore, the
timing of the decommissioning is likely to depend on when production activities
ceases to be economically viable. This in turn will depend and be directly
related to the current and future commodity prices, which are inherently
uncertain.
The following table reconciles the change in decommissioning provision:
----------------------------------------------------------------------------
Balance, December 31, 2012 58,201
----------------------------------------------------------------------------
New or increased provisions 2,961
Accretion of decommissioning provision 368
Change in discount rate and estimates (2,994)
----------------------------------------------------------------------------
Balance, March 31, 2013 58,536
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current -
Non-current 58,536
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Peyto has estimated the net present value of its total decommissioning provision
to be $58.5 million as at March 31, 2013 ($58.2 million at December 31, 2012)
based on a total future undiscounted liability of $134.8 million ($127.9 million
at December 31, 2012). At March 31, 2013 management estimates that these
payments are expected to be made over the next 50 years with the majority of
payments being made in years 2041 to 2062. The Bank of Canada's long term bond
rate of 2.50 per cent (2.36 per cent at December 31, 2012) and an inflation rate
of two per cent (two per cent at December 31, 2012) were used to calculate the
present value of the decommissioning provision.
6. Share capital
Authorized: Unlimited number of voting common shares
Issued and Outstanding
Number of Amount
Common Shares (no par value) Common Shares $
----------------------------------------------------------------------------
Balance, December 31, 2011 137,960,301 889,115
----------------------------------------------------------------------------
Common shares issued 4,628,750 115,024
Common shares issued for acquisition 5,404,007 112,187
Common shares issued by private placement 525,655 11,952
Common share issuance costs (net of tax) - (3,896)
----------------------------------------------------------------------------
Balance, December 31,2012 148,518,713 1,124,382
----------------------------------------------------------------------------
Common shares issued by private placement 240,210 5,742
Common share issuance costs, (net of tax) - (55)
----------------------------------------------------------------------------
Balance, March 31, 2013 148,758,923 1,130,069
----------------------------------------------------------------------------
----------------------------------------------------------------------------
On December 31, 2011 Peyto completed a private placement of 397,235 common
shares to employees and consultants for net proceeds of $9.7 million ($24.52 per
share). These common shares were issued on January 13, 2012.
On March 23, 2012, Peyto completed a private placement of 128,420 common shares
to employees and consultants for net proceeds of $2.2 million ($17.22 per
share).
On August 14, 2012, Peyto issued 5,404,007 common shares which were valued at
$112.2 million (net of issuance costs) ($20.76 per share) in relation to the
closing of a corporate acquisition.
On December 11, 2012, Peyto closed an offering of 4,628,750 common shares at a
price of $24.85 per common share, receiving proceeds of $110.0 million (net of
issuance costs).
On December 31, 2012, Peyto completed a private placement of 154,550 common
shares to employees and consultants for net proceeds of $3.5 million ($22.38 per
share). These common shares were issued January 7, 2013.
On March 19, 2013, Peyto completed a private placement of 85,660 common shares
to employees and consultants for net proceeds of $2.2 million ($26.65 per
share).
Per share amounts
Earnings per share or unit have been calculated based upon the weighted average
number of common shares outstanding for the period ended March 31, 2013 of
148,672,664 (2012 - 138,312,078). There are no dilutive instruments outstanding.
Dividends
During the period ended March 31, 2013, Peyto declared and paid dividends of
$0.18 per common share or $0.06 per common share per month, totaling $26.8
million (2012 - $0.18 or $0.06 per share per month, $24.9 million).
Comprehensive income
Comprehensive income consists of earnings and other comprehensive income
("OCI"). OCI comprises the change in the fair value of the effective portion of
the derivatives used as hedging items in a cash flow hedge. "Accumulated other
comprehensive income" is an equity category comprised of the cumulative amounts
of OCI.
Accumulated hedging gains
Gains and losses from cash flow hedges are accumulated until settled. These
outstanding hedging contracts are recognized in earnings on settlement with
gains and losses being recognized as a component of net revenue. Further
information on these contracts is set out in Note 8.
7. Future performance based compensation
Peyto awards performance based compensation to employees annually. The
performance based compensation is comprised of reserve and market value based
components.
Reserve based component
The reserves value based component is 4% of the incremental increase in value,
if any, as adjusted to reflect changes in debt, equity, dividends, general and
administrative costs and interest, of proved producing reserves calculated using
a constant price at December 31 of the current year and a discount rate of 8%.
Market based component
Under the market based component, rights with a three year vesting period are
allocated to employees. The number of rights outstanding at any time is not to
exceed 6% of the total number of common shares outstanding. At December 31 of
each year, all vested rights are automatically cancelled and, if applicable,
paid out in cash. Compensation is calculated as the number of vested rights
multiplied by the total of the market appreciation (over the price at the date
of grant) and associated dividends of a common share for that period.
The fair values were calculated using a Black-Scholes valuation model. The
principal inputs to the option valuation model were:
March 31, 2013 March 31, 2012
----------------------------------------------------------------------------
Share price $22.58 - $26.94 $16.38 -$24.75
Exercise price $19.30 - $22.58 $12.06 - $24.75
Expected volatility 25% 31%
Option life 1 year 1 year
Dividend yield 0% 0%
Risk-free interest rate 1.02% 1.19%
----------------------------------------------------------------------------
8. Financial instruments
Financial instrument classification and measurement
Financial instruments of the Company carried on the condensed balance sheet are
carried at amortized cost with the exception of cash and financial derivative
instruments, specifically fixed price contracts, which are carried at fair
value. There are no significant differences between the carrying amount of
financial instruments and their estimated fair values as at March 31, 2013.
The Company's areas of financial risk management and risks related to financial
instruments remained unchanged from December 31, 2012.
The fair value of the Company's cash and financial derivative instruments are
quoted in active markets. The Company classifies the fair value of these
transactions according to the following hierarchy.
-- Level 1 - quoted prices in active markets for identical financial
instruments.
-- Level 2 - quoted prices for similar instruments in active markets;
quoted prices for identical or similar instruments in markets that are
not active; and model-derived valuations in which all significant inputs
and significant and significant value drivers are observable in active
markets.
-- Level 3 - valuations derived from valuation techniques in which one or
more significant inputs or significant value drivers are unobservable.
The Company's cash and financial derivative instruments have been assessed on
the fair value hierarchy described above and classified as Level 1.
Fair values of financial assets and liabilities
The Company's financial instruments include cash, accounts receivable, financial
derivative instruments, due from private placement, current liabilities,
provision for future performance based compensation and long term debt. At March
31, 2013, cash and financial derivative instruments are carried at fair value.
Accounts receivable, due from private placement, current liabilities and
provision for future performance based compensation approximate their fair value
due to their short term nature. The carrying value of the long term debt
approximates its fair value due to the floating rate of interest charged under
the credit facility.
Commodity price risk management
Peyto uses derivative instruments to reduce its exposure to fluctuations in
commodity prices. Peyto considers all of these transactions to be effective
economic hedges for accounting purposes.
Following is a summary of all risk management contracts in place as at March 31,
2013:
----------------------------------------------------------------------------
Propane Monthly Price
Period Hedged Type Volume (USD)
----------------------------------------------------------------------------
April 1, 2013 to June 30, 2013 Fixed Price 4,000 bbl $ 34.86/bbl
April 1, 2013 to December 31, 2013 Fixed Price 4,000 bbl $ 30.66/bbl
April 1, 2013 to December 31, 2013 Fixed Price 4,000 bbl $ 32.34/bbl
April 1, 2013 to December 31, 2013 Fixed Price 4,000 bbl $ 34.86/bbl
April 1, 2013 to December 31, 2013 Fixed Price 4,000 bbl $ 35.39/bbl
April 1, 2013 to December 31, 2013 Fixed Price 4,000 bbl $ 34.44/bbl
January 1, 2014 to December 31, 2014 Fixed Price 4,000 bbl $ 35.70/bbl
January 1, 2014 to December 31, 2014 Fixed Price 4,000 bbl $ 35.49/bbl
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural Gas Daily Price
Period Hedged Type Volume (CAD)
----------------------------------------------------------------------------
April 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 4.00/GJ
April 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 4.00/GJ
April 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 4.00/GJ
April 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 4.00/GJ
April 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 2.52/GJ
April 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 3.00/GJ
May 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 2.30/GJ
August 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 3.00/GJ
August 1, 2012 to October 31, 2014 Fixed Price 5,000 GJ $ 3.10/GJ
November 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 2.60/GJ
November 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 3.005/GJ
November 1, 2012 to October 31, 2013 Fixed Price 5,000 GJ $ 3.00/GJ
November 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 2.81/GJ
November 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 3.00/GJ
November 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 3.05/GJ
November 1, 2012 to March 31, 2014 Fixed Price 5,000 GJ $ 3.02/GJ
November 1, 2012 to October 31, 2014 Fixed Price 5,000 GJ $ 3.0575/GJ
January 1, 2013 to October 31, 2013 Fixed Price 5,000 GJ $ 3.42/GJ
January 1, 2013 to December 31, 2013 Fixed Price 5,000 GJ $ 3.105/GJ
January 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.00/GJ
January 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.02/GJ
April 1, 2013 to October 31, 2013 Fixed Price 5,000 GJ $ 3.205/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.105/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.53/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.45/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.50/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.08/GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.17GJ
April 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.10/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.25/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.30/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.33/GJ
April 1, 2013 to October 31, 2014 Fixed Price 7,500 GJ $ 3.20/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.22/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.20/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.1925/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.25/GJ
April 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.30/GJ
July 1, 2013 to October 31, 2013 Fixed Price 5,000 GJ $ 3.34/GJ
August 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.55/GJ
November 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.71/GJ
November 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.50/GJ
November 1, 2013 to October 31, 2014 Fixed Price 5,000 GJ $ 3.53/GJ
November 1, 2013 to March 31, 2015 Fixed Price 5,000 GJ $ 3.6025/GJ
----------------------------------------------------------------------------
As at March 31, 2013, Peyto had committed to the future sale of 288,000 barrels
of propane at an average price of $34.61 per barrel and 82,627,500 gigajoules
(GJ) of natural gas at an average price of $3.23 per GJ or $3.71 per mcf. Had
these contracts been closed on March 31, 2013, Peyto would have realized a loss
in the amount of $25.2 million. If the AECO gas price on March 31, 2013 were to
increase by $1/GJ, the unrealized loss would increase by approximately $82.6
million. An opposite change in commodity prices rates would result in an
opposite impact on other comprehensive income.
Subsequent to March 31, 2013 Peyto entered into the following contracts:
----------------------------------------------------------------------------
Natural Gas Daily Price
Period Hedged Type Volume (CAD)
----------------------------------------------------------------------------
November 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.76/GJ
November 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 3.86/GJ
November 1, 2013 to March 31, 2014 Fixed Price 5,000 GJ $ 4.00/GJ
April 1, 2014 to October 31, 2014 Fixed Price 5,000 GJ $ 3.505/GJ
April 1, 2014 to October 31, 2014 Fixed Price 5,000 GJ $ 3.555/GJ
April 1, 2014 to October 31, 2014 Fixed Price 5,000 GJ $ 3.48/GJ
----------------------------------------------------------------------------
9. Commitments
Following is a summary of Peyto's contractual obligations and commitments as at
March 31, 2013.
2013 2014 2015 2016 2017 Thereafter
----------------------------------------------------------------------------
Note repayment(1) - - - - - 150,000
Interest payments(2) 3,415 6,830 6,830 6,830 6,830 18,785
Transportation
commitments 10,300 13,217 9,913 5,224 1,688 1,235
Operating leases 1,258 1,694 522 - - -
----------------------------------------------------------------------------
Total 14,973 21,741 17,265 12,054 8,518 170,020
----------------------------------------------------------------------------
(1) Long-term debt repayment on senior secured notes
(2) Fixed interest payments on senior secured notes
Officers
Darren Gee Tim Louie
President and Chief Executive Officer Vice President, Land
Scott Robinson David Thomas
Executive Vice President and Chief Vice President, Exploration
Operating Officer Jean-Paul Lachance
Kathy Turgeon Vice President, Exploitation
Vice President, Finance and Chief
Financial Officer
Stephen Chetner
Corporate Secretary
Directors
Don Gray, Chairman
Rick Braund
Stephen Chetner
Brian Davis
Michael MacBean, Lead Independent Director
Darren Gee
Gregory Fletcher
Scott Robinson
Auditors
Deloitte LLP
Solicitors
Burnet, Duckworth & Palmer LLP
Bankers
Bank of Montreal
Union Bank, Canada Branch
Royal Bank of Canada
Canadian Imperial Bank of Commerce
The Toronto-Dominion Bank
Bank of Nova Scotia
HSBC Bank Canada
Alberta Treasury Branches
Canadian Western Bank
Transfer Agent
Valiant Trust Company
Head Office
1500, 250 - 2nd Street SW
Calgary, AB
T2P 0C1
Phone: 403.261.6081
Fax: 403.451.4100
Web: http://www.peyto.com/
Stock Listing Symbol: PEY.TO
FOR FURTHER INFORMATION PLEASE CONTACT:
Peyto Exploration & Development Corp.
1500, 250 - 2nd Street SW
Calgary, AB T2P 0C1
403.261.6081
403.451.4100 (FAX)
www.peyto.com
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