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NEWS RELEASE MARCH 3 , 2021 SYMBOL : PEY - TSX PEYTO RETURNS TO PROFITABILITY WITH Q4 2020 RESULTS - CALGARY , ALBERTA – Peyto Exploration & Development Corp. ( “ Peyto ” or the “ Company ” ) today reports operating and financial results for the fourth quarter and 2020 fiscal year . A 55 % operating margin ' combined with record low $ 2.07 / Mcfe total supply cost ( PDP FD & A plus Total Cash Costs ) helped the Company endure the lowest realized commodity prices in Company history . Annual Return on capital employed ( “ ROCE ” ) and Return on equity ( “ ROE ” ) were 0 % and -2 % , respectively , despite fourth quarter earnings of $ 66 million or $ 0.40 / share . Full Year and Q4 2020 Highlights : • • • Low Cash Costs of $ 1.01 / Mcfe ( or $ 0.88 / Mcfe before royalties ) – Full year 2020 total cash costs of $ 1.01 / Mcfe continue to be the lowest in the industry and when combined with a realized price of $ 2.23 / Mcfe ( $ 13.38 / boe ) , resulted in a cash netback of $ 1.22 / Mcfe ( $ 7.30 / boe ) or a 55 % operating margin . Fourth quarter cash costs of $ 0.88Mcfe , before royalties of $ 0.18 / Mcfe , included operating costs of $ 0.31 / Mcfe , transportation of $ 0.15 / Mcfe , G & A of $ 0.04 / Mcfe and interest expense of $ 0.38 / Mcfe . Low PDP FD & A Costs - Proved Developed Producing ( " PDP " ) Finding , Development and Acquisition ( " FD & A ” ) cost of $ 1.06 / Mcfe ( $ 6.36 / boe ) was the lowest in 18 years and is reflective of a continuous decrease in drilling time , combined with higher reserve recoveries from longer horizontal laterals and more intensive fracture treatments . Lowest Production Addition Cost - While annual capital investments of $ 236MM were 111 % of the $ 213MM in Funds from Operations ( " FFO " ) , they successfully replaced 127 % of annual production with new PDP Reserves . In the year , a total of 64 gross ( 61 net ) wells were drilled , 71 gross ( 67 net ) wells completed , and 72 gross ( 67 net ) wells brought on- stream . This activity added 26,500 boe / d of new production at year end at the lowest total cost , $ 8,900 / boe / d , in Company history . The Q4 2020 capital investment was $ 68 million and involved drilling 17 gross ( 17 net ) wells . Long Life , Low Decline Production - Peyto's base production decline is forecast in the Insite report at 25 % for 2021 , while its PDP Reserve Life Index ( " RLI " ) is 9 years , based on Q4 2020 production of 83,461 boe / d , which is one of the longest PDP RLIs in the industry . • Lower Emissions - Methane ( particularly flared and vented ) emissions were reduced again in 2020 , now down over 40 % since 2016. With approximately half of the emissions intensity and lower environmental impact ( emissions and land / water use per unit of production ) of the rest of the natural gas production and processing industry in Canada , Peyto's reserves are extracted with far less overall environmental impact * . Minimal Future Liabilities – The forecast cost of all Peyto's future abandonment and reclamation liability ( wells , sites , & facilities ) is $ 44 million ( NPV5 ) , which represents 1 % of the $ 3.3 billion of forecast future value of the total developed reserves³ ( NPV5 ) . 2020 in Review The year 2020 marked Peyto's 22nd . year of successful operations with impressive execution in drilling and completion operations and overall cost control across the organization , all while managing through the impact of the COVID - 19 pandemic . Development drilling focused on several different horizons across Peyto's Deep Basin lands while extensions in horizontal lateral length and increased stimulation intensity improved productivity and reserve recovery . A gathering system expansion at the end of 2019 allowed the South Brazeau lands to be more aggressively developed yielding excellent results , while two strategic acquisitions were successfully negotiated late in 2020 to follow up a multi - zone , development drilling program in North Sundance . These acquisitions are expected to add twice as much future drilling inventory as was harvested in the year , which helped offset the lack of Crown land purchases resulting from the 7.5 - month suspension of Alberta Crown land sales . Peyto's facility and infrastructure ownership continued to provide reduced full cycle cost and enhanced profitability to current and future reserves development . Unfortunately , the COVID - 19 pandemic and its resulting effect on global hydrocarbon demand severely impacted commodity prices in the year . This resulted in a realized combined natural gas and liquids price of just $ 2.23 / Mcfe , which is the lowest in Peyto's 22 - year history . Despite posting a $ 0.40 / share profit in the fourth quarter of 2020 , the Company recorded its first annual loss in 21 years ( $ 0.22 / share loss ) . Thankfully , the effect of the COVID - 19 pandemic appears to be coming to an end and commodity prices have significantly improved , setting the stage for a much brighter future in 2021 . 1 Operating Margin is defined as funds from operations divided by revenue before royalties and marketing but including realized hedging gains / losses . Please refer to Peyto's 2020 Sustainability Report at http://www.peyto.com/Files/Corporate/2020Sustainability Report.pdf 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 , particularly 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 .