Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: The Fix who wrote (8114)	4/15/2001 3:49:23 PM
From: Rocket Red	Respond to of 24927

NUS (CDNX)news expected this coming week as the stock continues to rise.

To: The Fix who wrote (8114)	4/15/2001 5:30:38 PM
From: teevee	Read Replies (1) \| Respond to of 24927

Fixer, Its not too late to get on the bus on this one: PEYTO EXPLORATION & DEVELOPMENT CORP. (PEY $3.00, CDNX) Recommendation: 1-TOP PICK 12-Month Target: $4.00 - 2,000% production growth during 2000, entering 2001 at 1,750 Boe/d - Significant forecast production growth in 2001 to exit year in excess of 5,000 Boe/d - Strong balance sheet with current debt to 2001F cash flow of 0.4 times - Low reserve replacement cost and high reserve replacement ratio in 2000 Full-cycle exploration success in 2000: Peyto Exploration&Development Corp. is a Canadian junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil. The company retains a high working interest in its undeveloped lands and operates virtually all of its production. Exploration and development yields huge reserve additions in 2000: Peyto replaced 2000 year-end exit production of approximately 1,750 Boe/d by 8.5 times on a proved basis and 14.3 time on a proved plus half probable basis. Based on the year-end exit rate of 1,750 Boe/d, Peyto has a Reserve Life Index of 12.1 years on proved reserves and 19.8 years on proved plus half probable reserves. Based on year-end reserve changes (2000 vs. 1999), Peyto had a finding, development and onstream cost of $7.98/Boe (10:1) proved and $4.75/Boe (10:1) proved plus half probable. On a proven basis (10:1), Peyto saw reserve additions of almost 5.5 million Boe from total capital expenditures of $43.6 million. These metrics are among the best in industry in 2000. Strong base provides platform for growth: The wells drilled and recompleted last year have exploited only a portion of Peyto’s land base. Production in the area is primarily from faulted blocks in the Cardium Formation with gas from the Upper Mannville as well as the Belly River Formations. In this area, Cardium wells require at least one well per section. However, up to four wells per section may be necessary to efficiently recover the reserves in place as initial production rates can range 0.7 — 1.0 MMcf/d with average annual decline rates of 15% - 20%. Despite street rumours, according to Peyto management there is no active water production associated with Peyto’s gas production. Peyto management has not booked any proved undeveloped reserves and indicated to us that the proved reserves on an average well basis are only attributable to about 30% of the section in which they are drilled. In addition, about half the probable reserve locations have had reserves attributed to them. We view this as a conservative reserve recognition. An expansion to add new processing capacity of 25 MMcf/d is currently being engineered with installation and commissioning of the expansion expected to be complete by late April/early May 2001. This will give the company ample processing to expand its program and by Q3, Peyto should have production in excess of 4,000 Boe/d, up 82%. We have revised our forecast up for production to average 3,450 Boe/d in 2001 and expect Peyto to exit the year at 5,000 Boe/d. With the current high gas price environment and Peyto's premium gas price, we expect that Peyto will generate approximately $49 million of cash flow in 2001 ($1.13/fully diluted share) on our estimate of capital expenditures of approximately $57.0 million. Peyto continues to lever its expertise in the area to expand its production base and landholdings. Several new opportunities are currently under review. Conclusion: Peyto had tremendous success with well recompletions and drilling adding significant reserves last year. The company has a very focussed strategy and a very strong technical team and continues to exceed our expectations. Last year saw the assembly of a core area; this year should see Peyto exploit that core area. We have raised our 12-month target to $4.00 and have increased our rating on this story to a 1—Top Pick.