During this interview, Trevor graciously asked JP from $PEY.to a question about decline rates.

This is an important and telling thread for many reasons, including misinformation on X and the truth about resource plays.

Buckle up 🧵 1/x

https://twitter.com/trevor_rose_/status/1966194317627928592

Here's the question:

“Why is Peyto’s decline rates higher than your peers (if that’s the case)?

Trevor followed, “I don’t think it is”

And JP responds, “I don’t think it is either so I don’t know how to answer that”

In short JP said… What the hell is he talking about?
3/x

December $PEY.to Monthly Report was another GEM

Production was up from 133,000 boe/d last month hitting 141,000 boe/d in November and on the way to 145k boe/d in Dec.

But JP's commentary on the Bluesky was shocking, so let's dig in.

🧵1/x When Peyto aquired Repsol they inherited a drilled but uncompleted Bluesky ERH.

"The well was so highly productive that it required a downhole chock to restrict its flow for 18 months due to facility constraints"

Sounds impressive right?
2/x

What is the purpose of this post?

Is he deliberately trying to mislead people 🤥OR is he just ignorant? (Hard to say)

Let's explore how & why it's completely wrong.
🧵1/x The first step of a proper analysis is to read the fine print and understand the assumptions.

-Only 3,972 are PUDs, PNP, or Probable BOOKED locations
-21,490 are UNBOOKED locations

UNBOOKED = "no certainty" that:
1) They will become a location &
2) If they are economic 👇
2/x

This is a great question... what would make me prefer $TOU.to over $PEY.to?

This is likely going to be a large thread so let's dig into some numbers. 🧵
1/x

https://twitter.com/naubzie/status/1981882479779672530

First two things I don't care about:

1) What anyone on X says about what a "high quality" business is. The numbers tell me it is or isn't a high quality business.

2) What the share price is doing. I want to evaluate what the business is worth, then check the stock price.
2/x

$Pey.to 2023 reserves 🧵

Peyto always answers these 4 key questions every year.

Lets dive in 1/x Breakdown of Repsol

-Most companies lump things together to hide terrible results. Peyto took the opposite approach.

-Organic capital program $413m added proved producing reserves at $6.90/boe. That is insane & probably best in the industry 2/x

Is “wet gas” better than “dry gas”?

If it triggers you that I would challenge this widely accepted view, please hold your criticism to the end.

We will compare two of the best $PEY & $TOU

An important 🧵 1/x

https://twitter.com/mackslann/status/1753937850054177062

First, yes it is true that $TOU has more “liquids” than $PEY.

In FY 2022, $TOU had 22% liquids compared to $PEY at 13%. 2/x

$Pey.to will begin selling about 10% of their gas to Cascade Power later this year.

Netbacks will be huge. 🚀 🚀
🧵 1/x

https://twitter.com/Mike02709735/status/1619022288879517696

Peyto will supply via a direct connection which means low transport and fuel costs. It also means significant emissions savings of around 25,000 tonnes of CO2e/yr. 2/x

Was asked today if I had to add one E&P stock right now which would it be?

Answer: It depends on your risk appetite and commodity price assumptions.

I started with Q3 unhedged normalized financials & compared it to what an investor would earn on a share bought today. 1/x But commodity prices today are a lot lower than in Q3 2022.

So let's look at $75 WTI & $4 AECO

This is what a shareholder would earn today buying at current prices. What you pay (valuation) & what the company can earn at lower prices has a big impact on your return. 2/x