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2013 Capital Budget
-- Peyto is currently on track with its 2013 budgeted capital program of $450 to $500 million and is expecting to drill approximately 100 gross (85 net) wells. These wells are forecast to add between 25,000 boe/d and 29,000 boe/d of new production by the end of the year.
(1) Capital Expenditure, Field Netback (Revenue less Royalties, Operating costs and Transportation), and Production are estimated and remain unaudited at this time.
(2) Recycle Ratio is Field Netback divided by FD&A.
2012 RESERVES
The following table summarizes Peyto's reserves and the discounted Net Present Value of future cash flows, before income tax, using variable pricing, at December 31, 2012.
---------------------------------------------------------------------------- Gas Oil & NGL BCFe MBOEReserve Category (mmcf) (mstb) (6:1) (6:1)----------------------------------------------------------------------------Proved Producing 802,315 23,772 945 157,491Proved Non-producing 14,379 369 17 2,765Proved Undeveloped 560,468 22,752 697 116,163----------------------------------------------------------------------------Total Proved 1,377,163 46,892 1,659 276,419Probable Additional 595,793 16,376 694 115,674----------------------------------------------------------------------------Proved + Probable Additional 1,972,956 63,268 2,353 392,094------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Before Tax Net Present Value ($thousands) Discounted atReserve Category 0% 5% 8% 10%----------------------------------------------------------------------------Proved Producing $ 4,767,288 $ 2,806,394 $ 2,253,628 $ 1,998,082Proved Non-producing $ 81,116 $ 38,250 $ 26,696 $ 21,680Proved Undeveloped $ 2,682,567 $ 1,321,680 $ 901,318 $ 702,492----------------------------------------------------------------------------Total Proved $ 7,530,971 $ 4,166,323 $ 3,181,642 $ 2,722,254Probable Additional $ 3,491,750 $ 1,565,561 $ 1,072,704 $ 857,665----------------------------------------------------------------------------Proved + Probable Additional $ 11,022,721 $ 5,731,885 $ 4,254,346 $ 3,579,919--------------------------------------------------------------------------------------------------------------------------------------------------------Note: Based on the InSite report effective December 31, 2012. Tables may notadd due to rounding.
ANALYSIS
On behalf of shareholders, Peyto has analyzed the reserve evaluation in order to answer three fundamental questions.
1. Base Reserves - How did the "base reserves" that were on production at the time of the last reserve report perform during the year, and how did any change in commodity price forecast affect their value?2. Value Creation - How much value did the 2012 capital investments create, both in current producing reserves and in undeveloped potential?3. Growth and Income - Are the projected cash flows capable of funding the growing number of undeveloped opportunities and a sustainable dividend stream to shareholders without sacrificing Peyto's financial flexibility?
