Expanded exploration will help these two

Article Excerpt

PEYTO ENERGY TRUST $15.53 (Toronto symbol PEY.UN; Units outstanding: 120.9 million; Market cap: $1.9 billion; SI Rating: Extra Risk; Dividend yield: 9.3%) produces and explores for oil and natural gas in Alberta. Its average daily production of 20,653 barrels of oil equivalent (including natural gas) is weighted 84% toward gas and 16% to oil. At current production rates, Peyto has proven oil and natural-gas reserves that should last 14 years. Peyto’s cash flow was $0.51 a unit in the three months ended March 31, 2010. The units trade at 7.6 times the trust’s annualized cash flow, based on the latest quarter. The trust’s long-term debt of $450 million is a reasonable 24% of its $1.9-billion market cap. In light of its strong cash flow and exploration success, Peyto is increasing its 2010 exploration spending to $225 million to $250 million. That’s up from $72.7 million in 2009. The units yield 9.3%. Peyto paid out a relatively low 71% of its cash flow as distributions in…

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