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NEWS RELEASE AUGUST 11 , 2021 SYMBOL : PEY – TSX PEYTO REPORTS SECOND QUARTER 2021 RESULTS CALGARY , ALBERTA - Peyto Exploration & Development Corp. ( " Peyto ” or the “ Company ” ) is pleased to present its operating and financial results for the second quarter of the 2021 fiscal year . A 59 % Operating Margin ( ¹ ) and a 9 % Profit Margin ( 2 ) in the quarter delivered a 6 % Return on Capital and a 6 % Return on Equity , on a trailing twelve - month basis . Highlights for the quarter included : • • • • . Funds from operations per share up 149 % . Generated $ 82 million in Funds from Operations ( " FFO ” ) in Q2 2021 ( $ 0.50 / share ) , up from $ 33 million in Q2 2020 ( $ 0.20 / share ) due to higher commodity price realizations combined with higher production , despite a $ 22 million realized hedging loss in the quarter . FFO in the quarter exceeded capital expenditures by $ 25 million . This represents a free cashflow ratio of over 30 % of FFO while dividends of $ 1.7 million in the quarter represent a payout ratio of 2 % . Production per share up 13 % . Second quarter 2021 production of 88,738 boe / d , comprised of 459 MMcf / d of natural gas , 7,253 bbl / d of Condensate and Pentanes , and 5,036 bbl / d of Butane and Propane , was up 14 % from 78,097 boe / d in Q2 2020. Total liquid yields of 26.8 bbl / MMcf , or 14 % of total production , was down from 27.7 bbl / MMcf in Q2 2020 due to an increased focus on leaner gas production . Total cash costs of $ 1.21 / Mcfe ( or $ 0.95 / Mcfe ( $ 5.69 / boe ) excluding royalties ) . Industry leading low total cash costs included $ 0.26 / Mcfe royalties , $ 0.35 / Mcfe operating costs , $ 0.22 / Mcfe transportation , $ 0.05 / Mcfe G & A and $ 0.33 / Mcfe interest , which combined with a realized price of $ 2.92 / Mcfe to result in a $ 1.71 / Mcfe ( $ 10.23 / boe ) cash netback , up 120 % from $ 0.77 / Mcfe ( $ 4.65 / boe ) in Q2 2020. Operating costs per unit for Q2 2021 were similar to the $ 0.36 / Mcfe in Q1 2021 and Q2 2020 despite significantly increased power prices and government fees , taxes and levies . Interest charges were down from $ 0.38 / Mcfe in Q1 2021 due to lower interest rates and reduced debt levels . Capital investment of $ 57 million in organic activity . A total of 15 gross ( 13.4 net working interest ) wells were drilled in the second quarter , 14 gross ( 13.3 net ) wells were completed , and 14 gross ( 13.3 net ) wells were brought on production . Over the last 12 months new production additions , inclusive of acquisitions , accounted for approximately 30,000 boe / d at the end of the quarter , which , when combined with a trailing twelve - month capital investment of $ 296 million , equates to an annualized capital efficiency of $ 9,900 / boe / d . Peyto anticipates full year 2021 capital efficiency will be less than $ 9,000 / boe / d . Earnings of $ 0.08 / share , Dividends of $ 0.01 / share . Earnings of $ 12.8 million were generated in the quarter while dividends of $ 1.7 million were paid to shareholders . Second Quarter 2021 in Review Peyto was active with four drilling rigs in Q2 2021 until the end of April when spring breakup required the shutdown of two of the rigs . The two remaining rigs continued drilling from pre - constructed pad sites right through to the end of the quarter . Startup of the two remaining rigs was delayed until late June due to upgrades to rig equipment to make them more efficient , which delayed some expected activity in the quarter . Completion activity was possible during approximately half the days in the quarter which resulted in production for the quarter averaging the same as Q1 2021 , despite an extremely hot week in June that significantly affected compressor efficiency across Peyto's facilities . AECO natural gas prices rose 59 % throughout the quarter from $ 2.57 / GJ at the start of April to $ 4.19 / GJ by the end June , reflecting increased power demand due to the hot weather . Peyto's unhedged realized natural gas price for the quarter was up 57 % from Q2 2020 , before hedging and market diversification costs , while its unhedged realized oil and NGL price was up 189 % . Combined , Peyto's realized revenue after hedging losses and market diversification costs was up 69 % from $ 1.73 / Mcfe in Q2 2020 to $ 2.92 / Mcfe in Q2 2021 driving the 149 % increase in FFO per share . Cash costs before royalties were held constant from the prior year period other than a $ 0.05 / Mcfe increase in transportation tolls , resulting in a 120 % improvement in cash netback . Finally , Peyto was pleased to release its inaugural ESG report in the quarter , highlighting its industry leading environmental , social and governance performance . This report , which is more comprehensive than the previous Sustainability report , can be found on Peyto's website at www.peyto.com . 1. Operating Margin is defined as funds from operations divided by revenue before royalties but including realized hedging gains / losses . 2. Profit Margin is defined as net earnings for the quarter divided by revenue before royalties but including realized hedging gains / losses . 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 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 .