These former trusts are raising production

Article Excerpt

PEYTO EXPLORATION & DEVELOPMENT CORP. $19.61 (Toronto symbol PEY; Shares outstanding: 121.9 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.7%; www.peyto.com) is the new name of Peyto Energy Trust after it converted to a dividend-paying corporation on December 31, 2010. Peyto produces and explores for oil and natural gas in Alberta. Its average daily production of 32,500 barrels of oil equivalent (including natural gas) is weighted 85% toward gas and 15% to oil. At current production rates, Peyto has proven oil and natural-gas reserves that should last 11 years. Peyto’s cash flow was $0.47 a unit in the three months ended September 30, 2010. That’s up 20.5% from $0.39 a year earlier. The shares trade at 8.6 times the company’s forecast 2011 cash flow of $2.28 a share. Peyto’s long-term debt of $455 million is a reasonable 19% of its $2.4-billion market cap. Before its conversion from an income trust, Peyto paid a monthly distribution of $0.12 a unit…

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