Peyto Exploration & Development (PEY) Q4 2025 earnings summary

Executive summary

• Invested CAD 475 million in 2025, growing annual production and PDP reserves by 7% and reducing net debt by CAD 171 million (13%).

• Paid CAD 265 million in dividends (CAD 1.32/share) and reduced net debt by CAD 171 million, maintaining capital efficiency and operational discipline.

• Achieved record annual production of 134,055 BOE/d, up 7% year-over-year, and Q4 production of 140,800 BOE/d, up 6% from Q4 2024.

• Generated annual funds from operations of CAD 860.5 million and annual earnings of CAD 418.6 million.

• Expanded drilling inventory, with 34 of 82 wells drilled in new, previously unbooked locations.

Financial highlights

• Q4 average production reached 140,800 BOE/d, up 6% year-over-year, driving funds from operations up 23% to CAD 245 million.

• Realized natural gas price after hedging/diversification was CAD 3.82/Mcf for 2025, 117% above AECO 7A index.

• Achieved a 72% annual operating margin and 31% profit margin for 2025; Q4 operating margin reached 74% and profit margin 34%.

• Net debt at year-end was CAD 1.18 billion, down 13% from 2024.

• Total capital expenditures were CAD 475.2 million for the year and CAD 142.1 million in Q4.

Outlook and guidance

• 2026 capital spending planned at CAD 450–500 million, targeting 70–80 net wells using 4–5 rigs, with flexibility to adjust to commodity prices.

• 70% of summer gas volumes hedged at just under CAD 4, with flexibility to adjust rig count based on market conditions.

• Remain constructive on natural gas due to LNG buildout and rising local demand, especially from power and data centers.

• Production will be managed to limit exposure to weak markets; hedging and diversification to secure revenues for dividends and debt reduction.