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by Stockwatch Business Reporter
West Texas Intermediate crude for September delivery added 23 cents to $48.82 on the New York Merc, while Brent for October added 20 cents to $52.10 (all figures in this para U.S.). Western Canadian Select traded at a discount of $9.95 to WTI ($38.87), unchanged. Natural gas for September lost one cent to $2.98. The TSX energy index lost a fraction to close at 174.85.
Alberta gas producer Peyto Exploration & Development Corp. (PEY) lost 11 cents to $20.14 on 495,600 shares. It is edging ever closer to the $20 mark, which it has not fallen below since 2012. Just a year ago it was as high as $39. It has nearly halved since then, and the second quarter financials, which arrived Wednesday, did not make investors feel better. Quarterly production of nearly 98,000 barrels of oil equivalent a day had already been announced, leading analysts to predict cash flow of 84 cents a share, but actual cash flow came in at 79 cents a share. President and chief executive officer Darren Gee was unfazed. In a conference call yesterday, Mr. Gee patted Peyto on the back for achieving a pleasing milestone during the second quarter, which marked "50 quarters in a row that we've had earnings." He acknowledged, however, that Peyto's $40-million in earnings did not cover its $54-million in dividend payments (let alone its $98-million in capital spending). Peyto pays an 11-cent monthly dividend that yields 6.5 per cent. Mr. Gee said the company is looking to "close that gap" between earnings and dividend payments by year-end, thanks to rising production and higher profit margins. The dividend is thus staying intact for now. Of course, Mr. Gee said as recently as last month that when it comes to the dividend, "Nothing is ever set in stone."
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