SYS-CON MEDIA Authors: Pat Romanski, Elizabeth White, Yeshim Deniz, Glenn Rossman, Cynthia Dunlop

News Feed Item

Peyto Reports Q2 2014 Results and Spuds Its 1,000th Deep Basin Well

CALGARY, ALBERTA -- (Marketwired) -- 08/13/14 -- Peyto Exploration & Development Corp. (TSX:PEY) ("Peyto" or the "Company") is pleased to present its operating and financial results for the second quarter of the 2014 fiscal year. Profitable growth continued in the quarter with operating(1) and profit margins(2) of 78% and 30%, respectively. Additional highlights included:


--  Production per share up 20%. Second quarter 2014 production increased
    24% (20% per share) to 434 MMcfe/d (72,302 boe/d) from 349 MMcfe/d
    (58,145 boe/d) in Q2 2013. 
    
--  Funds from operations per share up 42%. Generated a record $162 million
    in Funds from Operations ("FFO") in Q2 2014, up 47% (42% per share) from
    $110 million in Q2 2013, due to increased production volumes and
    improved commodity prices. 
    
--  Cash costs of $1.17/Mcfe. Total cash costs, including royalties,
    operating costs, transportation, G&A and interest, were $1.17/Mcfe
    ($6.99/boe) up 7% from $1.09/Mcfe in Q2 2013, due primarily to higher
    royalties, driven by higher commodity prices. Excluding royalties, cash
    costs were 6% lower at $0.72/Mcfe ($4.30/boe) than Q2 2013. Higher
    revenues, combined with total cash costs, resulted in a Q2 2014 cash
    netback of $4.09/Mcfe ($24.56/boe) or a 78% operating margin. 
    
--  Capital investment of $151 million. A total of 31 gross wells were
    drilled in the second quarter, with traditional spring breakup causing
    little interruption to field operations. New wells brought on production
    over the last 12 months accounted for 36,300 boe/d at the end of the
    quarter, which, when combined with trailing twelve month capital of
    $665.8 million, equates to an annualized capital efficiency of
    $18,340/boe/d. 
    
--  Earnings of $0.41/share, dividends of $0.28/share. Earnings of $62
    million were generated in the quarter while dividends of $43 million
    were paid to shareholders, representing a before tax payout ratio of 27%
    of FFO. The monthly dividend was increased 25% to $0.10/share effective
    May 2014. 
    
--  Drilling milestone achieved. On August 13, 2014 the Company spud its
    1,000th well at 16-28-54-21W5 in Sundance. 

Second Quarter 2014 in Review

Peyto had a very active second quarter despite spring breakup, which is the traditional period of reduced activity. Pad drilling, combined with active road maintenance in the Greater Sundance area, allowed for continuous drilling operations with an average of 8 rigs running throughout the quarter. This allowed the Company to maintain the industry leading capital efficiencies that have been achieved over the last few years, again adding new production for approximately $18,000/boe/d. While new production additions offset the base well declines, overall production growth was partially impeded by downtime and unscheduled disruptions caused by higher sales line pressures and power outages. Second quarter production averaged 72,302 boe/d, up slightly from the first quarter. Peyto also expanded its owned and operated gas plant capacity in the quarter, adding an aggregate of 7,000 boe/d at the Wildhay, Swanson, and Brazeau River gas plants. This additional capacity will accommodate new production volumes resulting from the balance of the 2014 drilling program. Both natural gas and propane prices were slightly lower than the previous quarter, but so were Peyto's cash costs, resulting in cash netbacks that were approximately the same. The realized cash netbacks for the first half of 2014 are still up substantially (19%) from the previous year. These higher cash netbacks, combined with record production levels, lead to quarterly FFO of $162 million, or $1.05/share. The strong financial and operating performance delivered in the quarter resulted in an annualized 19% Return on Equity (ROE) and 14% Return on Capital Employed (ROCE).


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 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. 

----------------------------------------------------------------------------
                                          3 Months Ended June 30         %  
                                            2014            2013    Change  
----------------------------------------------------------------------------
Operations                                                                  
Production                                                                  
  Natural gas (mcf/d)                    388,407         310,621        25% 
  Oil & NGLs (bbl/d)                       7,568           6,374        19% 
  Thousand cubic feet equivalent                                            
   (mcfe/d @ 1:6)                        433,812         348,868        24% 
  Barrels of oil equivalent                                                 
   (boe/d @ 6:1)                          72,302          58,145        24% 
Production per million common                                               
 shares (boe/d)(i)                           470             391        20% 
Product prices                                                              
  Natural gas ($/mcf)                       4.37            3.72        17% 
  Oil & NGLs ($/bbl)                       77.30           67.82        14% 
  Operating expenses ($/Mcfe)               0.36            0.35         3% 
  Transportation ($/Mcfe)                   0.13            0.12         8% 
  Field netback ($/Mcfe)                    4.32            3.77        15% 
  General & administrative                                                  
   expenses ($/Mcfe)                        0.01            0.05       (80)%
  Interest expense ($/Mcfe)                 0.22            0.25       (12)%
Financial ($000, except per                                                 
 share(i))                                                                  
Revenue                                  207,519         144,614        43% 
Royalties                                 17,689           9,849        80% 
Funds from operations                    161,577         109,987        47% 
Funds from operations per share             1.05            0.74        42% 
Total dividends                           43,033          32,727        31% 
Total dividends per share                   0.28            0.22        27% 
  Payout ratio                                27              30       (10)%
Earnings                                  62,159          37,773        65% 
Earnings per diluted share                  0.41            0.25        64% 
Capital expenditures                     151,290          73,809       105% 
Weighted average common shares                                              
 outstanding                         153,690,808     148,758,923         3% 
As at June 30                                                               
End of period shares outstanding                                            
Net debt                                                                    
Shareholders' equity                                                        
Total assets                                                                
(i)all per share amounts using weighted average common shares outstanding   

----------------------------------------------------------------------------
                                          6 Months Ended June 30         %  
                                            2014            2013    Change  
----------------------------------------------------------------------------
Operations                                                                  
Production                                                                  
  Natural gas (mcf/d)                    388,703         303,943        28% 
  Oil & NGLs (bbl/d)                       7,472           6,109        22% 
  Thousand cubic feet equivalent                                            
   (mcfe/d @ 1:6)                        433,533         340,595        27% 
  Barrels of oil equivalent                                                 
   (boe/d @ 6:1)                          72,256          56,766        27% 
Production per million common                                               
 shares (boe/d)(i)                           473             382        24% 
Product prices                                                              
  Natural gas ($/mcf)                       4.41            3.61        22% 
  Oil & NGLs ($/bbl)                       78.86           71.65        10% 
  Operating expenses ($/Mcfe)               0.37            0.33        12% 
  Transportation ($/Mcfe)                   0.13            0.12         8% 
  Field netback ($/Mcfe)                    4.36            3.72        17% 
  General & administrative                                                  
   expenses ($/Mcfe)                        0.03            0.04       (25)%
  Interest expense ($/Mcfe)                 0.22            0.23        (4)%
Financial ($000, except per                                                 
 share(i))                                                                  
Revenue                                  416,837         277,816        50% 
Royalties                                 35,551          20,440        74% 
Funds from operations                    322,362         212,844        51% 
Funds from operations per share             2.11            1.43        48% 
Total dividends                           79,538          59,493        34% 
Total dividends per share                   0.52            0.40        30% 
  Payout ratio                                25              28       (11)%
Earnings                                 124,288          74,179        68% 
Earnings per diluted share                  0.81            0.50        62% 
Capital expenditures                     330,668         242,908        36% 
Weighted average common shares                                              
 outstanding                         152,763,770     148,716,032         3% 
As at June 30                                                               
End of period shares outstanding     153,690,808     148,758,923         3% 
Net debt                                 880,386         746,094        18% 
Shareholders' equity                   1,392,911       1,227,842        13% 
Total assets                           2,781,258       2,328,117        19% 
(i)all per share amounts using weighted average common shares outstanding   
                                                                            
                                                                            
----------------------------------------------------------------------------
                                            3 Months Ended    6 Months Ended
                                                   June 30           June 30
($000)                                       2014     2013     2014     2013
----------------------------------------------------------------------------
Cash flows from operating activities      152,170   96,700  298,624  189,243
Change in non-cash working capital          2,560    8,946   10,523   17,730
Change in provision for future                                              
 compensation                               6,847    4,341   13,215    5,871
----------------------------------------------------------------------------
Funds from operations                     161,577  109,987  322,362  212,844
----------------------------------------------------------------------------
Funds from operations per share(i)           1.05     0.74     2.11     1.43
----------------------------------------------------------------------------
(i) Funds from operations - Management uses funds from operations to analyze
the operating performance of its energy assets. In order to facilitate      
comparative analysis, funds from operations is defined throughout this      
report as earnings before performance based compensation, non-cash and non- 
recurring expenses. Management believes that funds from operations is an    
important parameter to measure the value of an asset when combined with     
reserve life. Funds from operations is not a measure recognized by Canadian 
generally accepted accounting principles ("GAAP") and does not have a       
standardized meaning prescribed by GAAP. Therefore, funds from operations,  
as defined by Peyto, may not be comparable to similar measures presented by 
other issuers, and investors are cautioned that funds from operations should
not be construed as an alternative to net earnings, cash flow from operating
activities or other measures of financial performance calculated in         
accordance with GAAP. Funds from operations cannot be assured and future    
distributions may vary.                                                     

Exploration & Development

Peyto's second quarter 2014 activity continued to focus on the many stacked resource plays in the Alberta Deep Basin, with all zones yielding liquids rich, sweet natural gas. A total of 31 wells were drilled across the land base, targeting the many prospective zones, as shown in the following table:


                                                                       Total
                                                                       Wells
                                      Field                          Drilled
                                                                            
                                                      Kisku/                
Zone        Sundance Nosehill Wildhay Ansell Berland   Kakwa Brazeau        
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cardium            2                                                       2
Notikewin          3        1                                              4
Falher             4        5              1                              10
Wilrich            8                4      1                       1      14
Bluesky            1                                                       1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total             18        6       4      2                       1      31
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The majority of the activity in the quarter focused within the greater Sundance area where access to existing roads and leases was available.

Capital Expenditures

Over the course of the second quarter, Peyto spent $68.5 million to drill 31 gross (28.2 net) horizontal wells and $48.0 million to complete 30 gross (28.0 net) wells. Additionally, 32 gross (29.8 net) wells were brought onstream with $10.3 million of wellsite equipment and gathering pipelines. Major facility capital investment amounted to $16.3 million and included the installation and commissioning of an eighth compressor at the Wildhay gas plant (adding 10 MMcf/d capacity), the twinning of the Wildhay sales pipeline (providing 35 MMcf/d of additional sales gas transmission capacity), the installation of a large gathering line between the Oldman and Nosehill plants to take advantage of spare Nosehill plant capacity, and the commissioning of a fourth compressor at the Swanson Plant (adding 18 MMcf/d). A refrigeration plant and an additional compressor was also installed at the Brazeau River gas plant (adding 10 MMcf/d). Lastly, $1.0 million was directed towards preparation and fabrication for the planned Oldman North plant expansion (adding 40 MMcf/d with expected start-up in October).

During the second quarter, Peyto invested $5.9 million at Alberta Crown land sales on highly prospective Wilrich lands adjacent to the company's existing Deep Basin land position. A total of 11 net sections (containing 34 internally identified new drilling locations) were added for $833/acre. Additionally, $2.3 million was spent on the acquisition of trade seismic data to support ongoing technical work in the Brazeau and Sundance areas.

By the end of the quarter, the 32 gross (29.8 net) wells brought onstream in Q2 2014 were contributing 14,850 boe/d to the quarter end exit rate of 73,000 boe/d.

Financial Results

Daily natural gas prices in Alberta (AECO) averaged $4.44/GJ in Q2 2014, while monthly AECO prices averaged $4.43/GJ. As Peyto had committed 88% of its production to the monthly price, Peyto realized a volume weighted average natural gas price of $4.44/GJ or $5.02/mcf, prior to a $0.65/mcf hedging loss.

Peyto realized a blended oil and natural gas liquids price of $77.58/bbl in Q2 2014, prior to a $0.28/bbl hedging loss, for its blend of condensate, pentane, butane and propane, which represented 74% of the $104.30/bbl average Edmonton light oil price.

Combining realized natural gas and liquids prices, Peyto's unhedged revenues totaled $5.85/Mcfe ($5.26/Mcfe including hedging losses), or 132% of the dry gas price, illustrating the benefit of high heat content, liquids rich natural gas production.

Royalties of $0.45/Mcfe, operating costs of $0.36/Mcfe, transportation costs of $0.13/Mcfe, G&A of $0.01/Mcfe and interest costs of $0.22/Mcfe, combined for total cash costs of $1.17/Mcfe ($6.99/boe). These industry leading total cash costs resulted in a cash netback of $4.09/Mcfe ($24.52/boe) or a 78% operating margin.

Royalties per Mcfe were up 40% due to higher natural gas and liquids prices while operating costs were in line with the previous year but down from the previous quarter as methanol and maintenance costs were lower.

Depletion, depreciation and amortization charges of $1.73/Mcfe, along with a provision for future tax and market based bonus payments reduced the cash netback to earnings of $1.57/Mcfe, or a 30% profit margin, which funded dividends of $1.09/Mcfe.

Subsequent to the second quarter, Peyto issued CDN $50 million of senior unsecured notes pursuant to a note purchase and private shelf agreement. The notes have a coupon rate of 3.79% and mature on July 3, 2022. As the notes rank equally with Peyto's obligations under its bank facility and existing note purchase agreements, Peyto's aggregate borrowing capacity increased by $50 million to $1.32 billion.

Marketing

For the quarter, approximately 63% of Peyto's natural gas production received a fixed price of $3.53/GJ from hedges that were put in place over the previous 16 months, while the balance received the blended daily and monthly price of $4.44/GJ, resulting in an after-hedge price of $3.87/GJ or $4.37/mcf.

Peyto's practice of layering in future sales in the form of fixed price swaps, and thus smoothing out the volatility in gas prices, continued throughout the quarter. The following table summarizes the remaining hedged volumes and prices for the upcoming years, as of August 1, 2014.


----------------------------------------------------------------------------
                      Future Sales                 Average Price (CAD)      
----------------------------------------------------------------------------
                          GJ             Mcf      $/GJ            $/Mcf     
----------------------------------------------------------------------------
2014              42,155,000      36,656,522      3.66            4.21      
2015              53,955,000      46,917,391      3.78            4.34      
2016               5,005,000       4,352,174      3.79            4.35      
----------------------------------------------------------------------------
Total            101,115,000      87,926,087      3.73            4.29      
----------------------------------------------------------------------------
(i)prices and volumes in mcf use Peyto's historic heat content premium of   
1.15.                                                                       

As illustrated in the following table, Peyto's realized natural gas liquids prices (1) were up 14% year over year but down 4% from the previous quarter.


----------------------------------------------------------------------------
                                             Three Months ended             
                                                   June 30                Q1
                                                  2014       2013       2014
----------------------------------------------------------------------------
Condensate ($/bbl)                              103.73      88.18     100.68
Propane ($/bbl) (includes hedging)               23.05      22.60      36.65
Butane ($/bbl) (includes hedging)                59.47      45.90      55.98
Pentane ($/bbl)                                 106.58      95.74     105.37
----------------------------------------------------------------------------
Total oil and natural gas liquids ($/bbl)        77.30      67.82      80.49
----------------------------------------------------------------------------
Canadian Light Sweet postings ($/bbl)           104.30      88.27      99.91
----------------------------------------------------------------------------
(1) liquids prices are Peyto realized prices in Canadian dollars adjusted   
for fractionation and transportation.                                       

As a fixed offset to benchmark pricing can no longer be obtained for Propane and Butane prices, Peyto has discontinued the practice of forward selling these components of its natural gas liquids.

Activity Update

Continuous operations, through break-up and into the summer months, has been very successful in accelerating the 2014 capital plans resulting in strong production growth over the past two months. Well results throughout all geographic areas and across all zones, particularly the Notikewin, Falher and Wilrich formations in Sundance, Obed and Ansell areas, have provided steady growth from an average of 71,500 boe/d in April to an average of 74,800 boe/d in July. Most recently, August daily production has averaged 78,500 boe/d. Peyto remains on track to meet or exceed previous guidance of $625 million of capital and exit production of 81,500 boe/d.

Currently, the Company has all 9 of its drilling rigs active, with four completion spreads following up, and anticipates maintaining this activity level through to year end. One rig is currently drilling at Brazeau but will be accompanied by a second rig this fall. A major 23 km gathering line linking the Peyto Brazeau Gas Plant to the Company's south acreage is in progress and is expected to be completed by early October which will connect a 6 well program to be drilled in that area. Focused drilling in the heart of Sundance for Notikewin, Falher, Wilrich and Bluesky targets is also programmed and will serve to fill the 40 MMcf/d of new Oldman North Plant capacity.

On August 13, 2014, Peyto celebrated the spudding of its 1,000th gas well in the Alberta Deep Basin at 16-28-54-21W5M in Sundance. Remarkably, this location is directly adjacent to Peyto's original recompletion in Sundance at 15-30 -54-21W5M, which continues to produce some 15 years later. Over the last five years Peyto has drilled over 400 natural gas wells, making Peyto the most active Alberta Deep Basin gas driller. While there are many stories told of the significant resource potential in the Alberta Deep Basin, Peyto has been the one turning that potential into reality and the Company continues to be an industry leader when it comes to profitable resource development.

Outlook

Natural gas prices in both Canada and the US have recently softened as record US production and mild summer weather has refilled storage reservoirs faster than expected. This brings future natural gas prices in Canada back into Peyto's "sweet spot" where significant profitable development can occur in Peyto's many Deep Basin resource plays without the risk of increased activity driving cost inflation and eroding returns.

At no point in Peyto's history has the Company had more opportunities than it does today and yet the team at Peyto continues to find additional new lands and drilling locations faster than they can be harvested. As demand for natural gas in North America continues to expand, Peyto is well positioned to keep applying its low cost advantage and delivering superior returns on invested capital.

Conference Call and Webcast

A conference call will be held with the senior management of Peyto to answer questions with respect to the 2014 second quarter on Thursday, August 14th, 2014, at 9:00 a.m. Mountain Daylight Time (MDT), or 11:00 a.m. Eastern Daylight Time (EDT). To participate, please call 1-416-340-8530 (Toronto area) or 1-800-766-6630 for all other participants. The conference call will also be available on replay by calling 1-905-694-9451 (Toronto area) or 1-800-408-3053 for all other parties, using passcode 7205959. The replay will be available at 11:00 a.m. MDT, 1:00 p.m. EDT Thursday, August 14th, 2014 until midnight EDT on Thursday, August 21st, 2014. The conference call can also be accessed through the internet at http://www.gowebcasting.com/5612. After this time the conference call will be archived on the Peyto Exploration & Development website at www.peyto.com.

Management's Discussion and Analysis

Management's Discussion and Analysis of this second quarter report is available on the Peyto website at http://www.peyto.com/news/Q22014MDandA.pdf. A complete copy of the second quarter report to shareholders, including the Management's Discussion and Analysis, and Financial Statements is also available at www.peyto.com and will be filed at SEDAR, www.sedar.com, at a later date.

Darren Gee

President and CEO

August 13, 2014

Certain information set forth in this document and Management's Discussion and Analysis, including management's assessment of Peyto's future plans and operations, capital expenditures and capital efficiencies, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Peyto's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Peyto will derive there from. In addition, Peyto is providing future oriented financial information set out in this press release for the purposes of providing clarity with respect to Peyto's strategic direction and readers are cautioned that this information may not be appropriate for any other purpose. Other than is required pursuant to applicable securities law, Peyto does not undertake to update forward looking statements at any particular time.


Peyto Exploration & Development Corp.                                       
Condensed Balance Sheet (unaudited)                                         
(Amount in $ thousands)                                                     
                                                                            
                                                                            
                                                     June 30    December 31 
                                                        2014           2013 
----------------------------------------------------------------------------
Assets                                                                      
Current assets                                                              
Accounts receivable                                   96,864         83,714 
Due from private placement (Note 6)                        -          6,245 
Prepaid expenses                                      18,322          5,666 
----------------------------------------------------------------------------
                                                     115,186         95,625 
----------------------------------------------------------------------------
                                                                            
Property, plant and equipment, net (Note 3)        2,665,253      2,459,531 
Long-term derivative financial instruments                                  
 (Note 8)                                                819              - 
----------------------------------------------------------------------------
                                                   2,666,072      2,459,531 
----------------------------------------------------------------------------
                                                   2,781,258      2,555,156 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities                                                                 
Current liabilities                                                         
Accounts payable and accrued liabilities             155,203        155,265 
Dividends payable (Note 6)                            15,369         11,901 
Derivative financial instruments (Note 8)             44,000         26,606 
Provision for future performance based                                      
 compensation (Note 7)                                18,317          5,100 
----------------------------------------------------------------------------
                                                     232,889        198,872 
----------------------------------------------------------------------------
                                                                            
Long-term debt (Note 4)                              825,000        875,000 
Long-term derivative financial instruments                                  
 (Note 8)                                                  -          5,180 
Provision for future performance based                                      
 compensation (Note 7)                                 8,382          3,200 
Decommissioning provision (Note 5)                    74,125         61,184 
Deferred income taxes                                247,951        211,082 
----------------------------------------------------------------------------
                                                   1,155,458      1,155,646 
----------------------------------------------------------------------------
                                                                            
Equity                                                                      
Share capital (Note 6)                             1,292,384      1,130,069 
Shares to be issued (Note 6)                               -          6,245 
Retained earnings                                    131,725         86,975 
Accumulated other comprehensive loss (Note 6)        (31,198)       (22,651)
----------------------------------------------------------------------------
                                                   1,392,911      1,200,638 
----------------------------------------------------------------------------
                                                   2,781,258      2,555,156 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the financial statements.                         
                                                                            
                                                                            
Peyto Exploration & Development Corp.                                       
Condensed Income Statement (unaudited)                                      
(Amount in $ thousands except earnings per share amount)                    
                                                                            
                                                                            
                            Three months ended June  Six months ended June  
                                       30                      30           
                                   2014        2013        2014        2013 
----------------------------------------------------------------------------
Revenue                                                                     
Oil and gas sales               230,995     148,466     470,415     276,889 
Realized (loss) gain on                                                     
 hedges (Note 8)                (23,476)     (3,852)    (53,578)        927 
Royalties                       (17,689)     (9,849)    (35,551)    (20,440)
----------------------------------------------------------------------------
Petroleum and natural gas                                                   
 sales, net                     189,830     134,765     381,286     257,376 
----------------------------------------------------------------------------
                                                                            
Expenses                                                                    
Operating                        14,059      11,242      29,289      20,548 
Transportation                    5,100       3,796      10,244       7,455 
General and administrative          582       1,717       2,138       2,197 
Future performance based                                                    
 compensation (Note 7)            9,803       6,559      18,399       9,097 
Interest                          8,512       8,022      17,252      14,332 
Accretion of decommissioning                                                
 provision (Note 5)                 476         369         974         737 
Depletion and depreciation                                                  
 (Note 3)                        68,410      53,287     137,262     104,912 
----------------------------------------------------------------------------
                                106,942      84,992     215,558     159,278 
----------------------------------------------------------------------------
Earnings before taxes            82,888      49,773     165,728      98,098 
----------------------------------------------------------------------------
                                                                            
Income tax                                                                  
Deferred income tax expense      20,729      12,000      41,440      23,919 
----------------------------------------------------------------------------
Earnings for the period          62,159      37,773     124,288      74,179 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Earnings per share (Note 6)                                                 
Basic and diluted           $      0.41 $      0.25 $      0.81 $      0.50 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the financial statements.                         
                                                                            
                                                                            
Peyto Exploration & Development Corp.                                       
Condensed Statement of Comprehensive Income (unaudited)                     
(Amount in $ thousands)                                                     
                                                                            
                                                                            
                                                                            
                          Three months ended June                           
                                               30   Six months ended June 30
                                2014         2013         2014          2013
----------------------------------------------------------------------------
Earnings for the period       62,159       37,773      124,288        74,179
Other comprehensive                                                         
 income                                                                     
Change in unrealized                                                        
 gain (loss) on cash                                                        
 flow hedges                  14,942       30,204      (64,971)        2,076
Deferred tax (expense)                                                      
 recovery                     (9,694)      (8,514)       2,846         (287)
Realized loss (gain) on                                                     
 cash flow hedges             23,476        3,852       53,578         (927)
----------------------------------------------------------------------------
Comprehensive income          90,883       63,315      115,741        75,041
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the financial statements.                         
                                                                            
                                                                            
Peyto Exploration & Development Corp.                                       
Condensed Statement of Changes in Equity (unaudited)                        
(Amount in $ thousands)                                                     
                                                                            
                                                                            
                                                                            
                                                  Six months ended June 30  
                                                          2014          2013
----------------------------------------------------------------------------
Share capital, beginning of period                   1,130,069     1,124,382
----------------------------------------------------------------------------
Common shares issued by private placement                6,997         5,742
Equity offering                                        160,480             -
Common shares issuance costs (net of tax)              (5,162)          (55)
----------------------------------------------------------------------------
Share capital, end of period                         1,292,384     1,130,069
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
Shares to be issued, beginning of period                 6,245         3,459
----------------------------------------------------------------------------
Shares issued                                          (6,245)       (3,459)
----------------------------------------------------------------------------
Shares to be issued, end of period                           -             -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
Retained earnings, beginning of period                  86,975        75,247
----------------------------------------------------------------------------
Earnings for the period                                124,288        74,179
Dividends (Note 6)                                    (79,538)      (59,494)
----------------------------------------------------------------------------
Retained earnings, end of period                       131,725        89,932
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
Accumulated other comprehensive income,                                     
 beginning of period                                  (22,651)         6,979
----------------------------------------------------------------------------
Other comprehensive (loss) income                      (8,547)           862
----------------------------------------------------------------------------
Accumulated other comprehensive (loss) income,                              
 end of period                                        (31,198)         7,841
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
Total equity                                         1,392,911     1,227,842
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the financial                                     
 statements.                                                                
                                                                            
                                                                            
Peyto Exploration & Development Corp.                                       
Condensed Statement of Cash Flows (unaudited)                               
(Amount in $ thousands)                                                     
                                                                            
                                                                            
                                                                            
                            Three months ended June   Six months ended June 
                                                 30                      30 
                                   2014        2013        2014        2013 
----------------------------------------------------------------------------
Cash provided by (used in):                                                 
Operating activities                                                        
Earnings                         62,159      37,773     124,288      74,179 
Items not requiring cash:                                                   
  Deferred income tax            20,729      12,000      41,440      23,919 
  Depletion and depreciation     68,410      53,287     137,262     104,912 
  Accretion of                                                              
   decommissioning provision        476         369         974         737 
  Long term portion of                                                      
   future performance based                                                 
   compensation                   2,956       2,217       5,183       3,226 
Change in non-cash working                                                  
 capital related to                                                         
 operating activities            (2,560)     (8,946)    (10,523)    (17,730)
----------------------------------------------------------------------------
                                152,170      96,700     298,624     189,243 
----------------------------------------------------------------------------
Financing activities                                                        
Issuance of common shares             -           -     167,477       5,742 
Issuance costs                        -           -      (6,883)        (73)
Cash dividends paid             (39,960)    (29,752)    (76,070)    (56,504)
Increase (decrease) in bank                                                 
 debt                            65,000     110,000     (50,000)    170,000 
----------------------------------------------------------------------------
                                 25,040      80,248      34,524     119,165 
----------------------------------------------------------------------------
Investing activities                                                        
Additions to property, plant                                                
 and equipment                 (151,290)    (73,809)   (330,668)   (242,908)
Change in prepaid capital        (9,143)          -        (349)      3,714 
Change in non-cash working                                                  
 capital relating to                                                        
 investing activities           (16,777)    (87,628)     (2,131)    (53,703)
----------------------------------------------------------------------------
                               (177,210)   (161,437)   (333,148)   (292,897)
----------------------------------------------------------------------------
Net increase (decrease) in                                                  
 cash                                 -      15,511           -      15,511 
Cash, beginning of period             -           -           -           - 
----------------------------------------------------------------------------
Cash, end of period                   -      15,511           -      15,511 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
The following amounts are                                                   
 included in cash flows from                                                
 operating activities:                                                      
----------------------------------------------------------------------------
  Cash interest paid              5,130       6,646      13,460      14,514 
  Cash taxes paid                     -           -           -       1,890 
----------------------------------------------------------------------------
Peyto Exploration & Development Corp.                                       
Notes to Condensed Financial Statements (unaudited)                         
As at June 30, 2014 and 2013                                                
(Amount in $thousands, except as otherwise noted)                           

1.  Nature of operations 

Peyto Exploration & Development Corp. ("Peyto" or the "Company") is a Calgary based oil and natural gas company. Peyto conducts exploration, development and production activities in Canada. Peyto is incorporated and domiciled in the Province of Alberta, Canada. The address of its registered office is 1500, 250 - 2nd Street SW, Calgary, Alberta, Canada, T2P 0C1.

These financial statements were approved and authorized for issuance by the Audit Committee of Peyto on August 12, 2014.


2.  Basis of presentation 

The condensed financial statements have been prepared by management and reported in Canadian dollars in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting". These condensed financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the Company's consolidated financial statements as at and for the years ended December 31, 2013 and 2012.

Significant Accounting Policies

(a) Significant Accounting Judgments, Estimates and Assumptions

The timely preparation of the condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies, if any, as at the date of the financial statements and the reported amounts of revenue and expenses during the period. By their nature, estimates are subject to measurement uncertainty and changes in such estimates in future years could require a material change in the condensed financial statements.

Except as disclosed below, all accounting policies and methods of computation followed in the preparation of these financial statements are the same as those disclosed in Note 2 of Peyto's financial statements as at and for the years ended December 31, 2013 and 2012.

(b) Recent Accounting Pronouncements

Certain new standards, interpretations, amendments and improvements to existing standards were issued by the International Accounting Standards Board (IASB) or International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning January 1, 2014 or later periods. The affected standards are consistent with those disclosed in Peyto's financial statements as at and for the years ended December 31, 2013 and 2012.

Peyto adopted the following standards on January 1, 2014:

IAS 36 "Impairment of Assets" has been amended to reduce the circumstances in which the recoverable amount of cash generating units "CGUs" are required to be disclosed and clarify the disclosures required when an impairment loss has been recognized or reversed in the period. The retrospective adoption of these amendments will only impact Peyto's disclosures in the notes to the financial statements in periods when an impairment loss or impairment reversal is recognized.

IFRIC 21 "Levies" was developed by the IFRS Interpretations Committee ("IFRIC") and is applicable to all levies imposed by governments under legislation, other than outflows that are within the scope of other standards (e.g., IAS 12 "Income Taxes") and fines or other penalties for breaches of legislation. The interpretation clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs. It also clarifies that a levy liability is accrued progressively only if the activity that triggers payment occurs over a period of time, in accordance with the relevant legislation. Lastly, the interpretation clarifies that a liability should not be recognized before the specified minimum threshold to trigger that levy is reached. The retrospective adoption of this interpretation does not have any impact on Peyto's financial statements

Standards issued but not yet effective

IFRS 9, as issued, reflects part of the IASB's work on the replacement of IAS 39 "Financial Instruments: Recognition and Measurement" and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39 and hedging transactions. The standard has no effective date. In subsequent phases, the IASB will address impairment of financial assets. The adoption of IFRS 9 may have an effect on the classification and measurement of the company's financial assets and financial liabilities. The Company will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued with an effective date.

In May 2014, the IASB issued IFRS 15 "Revenue from Contracts with Customers," which replaces IAS 18 "Revenue," IAS 11 "Construction Contracts," and related interpretations. The standard is required to be adopted either retrospectively or using a modified transition approach for fiscal years beginning on or after January 1, 2017, with earlier adoption permitted. IFRS 15 will be applied by Peyto on January 1, 2017 and the Company is currently evaluating the impact of the standard on Peyto's financial statements.


3.  Property, plant and equipment, net 

Cost                                                                        
----------------------------------------------------------------------------
At December 31, 2013                                              3,071,245 
----------------------------------------------------------------------------
  Additions                                                         330,668 
  Decommissioning provision additions                                11,967 
  Prepaid capital                                                       349 
----------------------------------------------------------------------------
At June 30, 2014                                                  3,414,229 
----------------------------------------------------------------------------
Accumulated depletion and depreciation                                      
----------------------------------------------------------------------------
At December 31, 2013                                               (611,714)
----------------------------------------------------------------------------
  Depletion and depreciation                                       (137,262)
----------------------------------------------------------------------------
At June 30, 2014                                                   (748,976)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Carrying amount at December 31, 2013                              2,459,531 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Carrying amount at June 30, 2014                                  2,665,253 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

During the three and six month periods ended June 30, 2014, Peyto capitalized $3.1 million and $5.9 million (2013 - $1.5 million and $4.1 million) of general and administrative expense directly attributable to exploration and development activities.


4.  Long-term debt 

----------------------------------------------------------------------------
                                           June 30, 2014   December 31, 2013
----------------------------------------------------------------------------
Bank credit facility                             555,000             605,000
Senior unsecured notes                           270,000             270,000
----------------------------------------------------------------------------
Balance, end of the period                       825,000             875,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------

As at June 30, 2014, the Company had a syndicated $1 billion extendible revolving credit facility with a stated term date of April 25, 2017. The bank facility is made up of a $30 million working capital sub-tranche and a $970 million production line. The facilities are available on a revolving basis for a three year period. Borrowings under the facility bear interest at Canadian bank prime or US base rate, or, at Peyto's option, Canadian dollar bankers' acceptances or US dollar LIBOR loan rates, plus applicable margin and stamping fees. The total stamping fees range between 50 basis points and 215 basis points on Canadian bank prime and US base rate borrowings and between 150 basis points and 315 basis points on Canadian dollar bankers' acceptance and US dollar LIBOR borrowings. The undrawn portion of the facility is subject to a standby fee in the range of 30 to 63 basis points.

On July 3, 2014, Peyto issued CDN $50 million of senior unsecured notes pursuant to a note purchase and private shelf agreement. The notes were issued by way of private placement and rank equally with Peyto's obligations under its bank facility. The notes have a coupon rate of 3.79% and mature on July 3, 2022. Interest is paid semi-annually in arrears.

Peyto is subject to the following financial covenants as defined in the credit facility and note purchase agreements:


--  Long-term debt plus the average working capital deficiency (surplus) at
    the end of the two most recently completed fiscal quarters adjusted for
    non-cash items not to exceed 3.0 times trailing twelve month net income
    before non-cash items, interest and income taxes;  
--  Long-term debt and subordinated debt plus the average working capital
    deficiency (surplus) at the end of the two most recently completed
    fiscal quarters adjusted for non-cash items not to exceed 4.0 times
    trailing twelve month net income before non-cash items, interest and
    income taxes;  
--  Trailing twelve months net income before non-cash items, interest and
    income taxes to exceed 3.0 times trailing twelve months interest
    expense;  
--  Long-term debt and subordinated debt plus the average working capital
    deficiency (surplus) at the end of the two most recently completed
    fiscal quarters adjusted for non-cash items not to exceed 55 per cent of
    the book value of shareholders' equity and long-term debt and
    subordinated debt. 

Peyto is in compliance with all financial covenants at June 30, 2014.

Total interest expense for the three and six month periods ended June 30, 2014 was $8.5 million and $17.3 million (2013 - $8.0 million and $14.3 million) and the average borrowing rate for the period was 4.2% and 4.3% (2013 - 4.2% and 4.1%).


5.  Decommissioning provision 

The following table reconciles the change in decommissioning provision:


----------------------------------------------------------------------------
Balance, December 31, 2013                                            61,184
----------------------------------------------------------------------------
New or increased provisions                                            5,365
Accretion of decommissioning provision                                   974
Change in discount rate and estimates                                  6,602
----------------------------------------------------------------------------
Balance, June 30, 2014                                                74,125
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Current                                                                    -
Non-current                                                           74,125
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Peyto has estimated the net present value of its total decommissioning provision to be $74.1 million as at June 30, 2014 ($61.2 million at December 31, 2013) based on a total future undiscounted liability of $185.4 million ($177.8 million at December 31, 2013). At June 30, 2014 management estimates that these payments are expected to be made over the next 50 years with the majority of payments being made in years 2040 to 2063. The Bank of Canada's long term bond rate of 2.78 per cent (3.24 per cent at December 31, 2013) and an inflation rate of two per cent (two per cent at December 31, 2013) were used to calculate the present value of the decommissioning provision.


6.  Share capital 

Authorized: Unlimited number of voting common shares

Issued and Outstanding


Common Shares (no par value)          Number of Common Shares      Amount $ 
----------------------------------------------------------------------------
Balance, December 31, 2013                        148,758,923     1,130,069 
----------------------------------------------------------------------------
Common shares issued by private                                             
 placement                                            211,885         6,997 
Equity offering                                     4,720,000       160,480 
Common share issuance costs, (net                                           
 of tax)                                                    -        (5,162)
----------------------------------------------------------------------------
Balance, June 30, 2014                            153,690,808     1,292,384 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Earnings per common share was determined based on the following:


----------------------------------------------------------------------------
                        Three Months ended June 30 Six Months ended June 30 
                                 2014         2013         2014         2013
----------------------------------------------------------------------------
Weighted average common                                                     
 shares basic and                                                           
 diluted                  153,690,808  148,758,923  152,763,770  148,716,032
----------------------------------------------------------------------------

On December 31, 2013, Peyto completed a private placement of 190,525 common shares to employees and consultants for net proceeds of $6.2 million ($32.78 per share). These common shares were issued January 8, 2014

On February 5, 2014, Peyto closed an offering for 4,720,000 common shares at a price of $34.00 per common share, receiving net proceeds of $153.6 million.

On March 17, 2014, Peyto completed a private placement of 21,360 common shares to employees and consultants for net proceeds of $ 0.8 million ($35.20 per common share).

Dividends

During the three and six month periods ended June 30, 2014, Peyto declared and paid dividends of $0.28 and $0.52 per common share ($0.08 per common share per month for January to April and $0.10 per common share for the months of May and June), totaling $42.9 million and $79.5 million respectively (2013 - $0.22 and $0.40 or $0.06 per share for the months of January to April and $0.08 for the months of May and June, $32.7 million and $59.5 million).

Comprehensive income

Comprehensive income consists of earnings and other comprehensive income ("OCI"). OCI comprises the change in the fair value of the effective portion of the derivatives used as hedging items in a cash flow hedge. "Accumulated other comprehensive income" is an equity category comprised of the cumulative amounts of OCI.

Accumulated hedging gains

Gains and losses from cash flow hedges are accumulated until settled. These outstanding hedging contracts are recognized in earnings on settlement with gains and losses being recognized as a component of net revenue. Further information on these contracts is set out in Note 8.


7.  Future performance based compensation 

Peyto awards performance based compensation to employees annually. The performance based compensation is comprised of reserve and market value based components.

Reserve based component

The reserves value based component is 4% of the incremental increase in value, if any, as adjusted to reflect changes in debt, equity, dividends, general and administrative costs and interest, of proved producing reserves calculated using a constant price at December 31 of the current year and a discount rate of 8%.

Market based component

Under the market based component, rights with a three year vesting period are allocated to employees. The number of rights outstanding at any time is not to exceed 6% of the total number of common shares outstanding. At December 31 of each year, all vested rights are automatically cancelled and, if applicable, paid out in cash. Compensation is calculated as the number of vested rights multiplied by the total of the market appreciation (over the price at the date of grant) and associated dividends of a common share for that period.

The fair values were calculated using a Black-Scholes valuation model. The principal inputs to the option valuation model were:


                                             June 30, 2014     June 30, 2013
----------------------------------------------------------------------------
Share price                                  $22.58-$40.10     $22.58-$30.40
Exercise price                               $19.91-$31.75     $19.30-$22.68
Expected volatility                                 0%-26%            0%-26%
Option life                                     0.50 years        0.50 years
Dividend yield                                          0%                0%
Risk-free interest rate                              1.09%             1.25%
----------------------------------------------------------------------------

8.  Financial instruments 

Financial instrument classification and measurement

Financial instruments of the Company carried on the condensed balance sheet are carried at amortized cost with the exception of cash and financial derivative instruments, specifically fixed price contracts, which are carried at fair value. There are no significant differences between the carrying amount of financial instruments and their estimated fair values as at June 30, 2014.

The Company's areas of financial risk management and risks related to financial instruments remained unchanged from December 31, 2013.

The fair value of the Company's cash and financial derivative instruments are quoted in active markets. The Company classifies the fair value of these transactions according to the following hierarchy.


--  Level 1 - quoted prices in active markets for identical financial
    instruments. 
--  Level 2 - quoted prices for similar instruments in active markets;
    quoted prices for identical or similar instruments in markets that are
    not active; and model-derived valuations in which all significant inputs
    and value drivers are observable in active markets. 
--  Level 3 - valuations derived from valuation techniques in which one or
    more significant inputs or value drivers are unobservable. 

The Company's cash and financial derivative instruments have been assessed on the fair value hierarchy described above and classified as Level 1.

Fair values of financial assets and liabilities

The Company's financial instruments include cash, accounts receivable, financial derivative instruments, due from private placement, current liabilities, provision for future performance based compensation and long term debt. At June 30, 2014, cash and financial derivative instruments are carried at fair value. Accounts receivable, due from private placement, current liabilities and provision for future performance based compensation approximate their fair value due to their short term nature. The carrying value of the long term debt approximates its fair value due to the floating rate of interest charged under the credit facility.

Commodity price risk management

Peyto uses derivative instruments to reduce its exposure to fluctuations in commodity prices. Peyto considers all of these transactions to be effective economic hedges for accounting purposes.

Following is a summary of all risk management contracts in place as at June 30, 2014:


----------------------------------------------------------------------------
Propane                                     Monthly                   Price 
Period Hedged                       Type     Volume                   (USD) 
----------------------------------------------------------------------------
January 1, 2014 to December                                                 
 31, 2014                    Fixed Price  8,000 bbl   $35.70 to $37.485/bbl 
April 1, 2014 to September                                                  
 30, 2014                    Fixed Price 16,000 bbl  $41.79/ to $46.20 /bbl 
October 1, 2014 to December                                                 
 31, 2014                    Fixed Price  4,000 bbl              $42.84/bbl 
----------------------------------------------------------------------------
                                                                            
Natural Gas                                                                 
Period Hedged                                 Daily                   Price 
                                    Type     Volume                    (CAD)
----------------------------------------------------------------------------
November 1, 2012 to October                                                 
 31, 2014                    Fixed Price   5,000 GJ              $3.0575/GJ 
April 1, 2013 to October 31,                                                
 2014                        Fixed Price  47,500 GJ        $3.1925-$3.33/GJ 
November 1, 2013 to October                                                 
 31, 2014                    Fixed Price  15,000 GJ        $3.50-$3.6025/GJ 
April 1, 2014 to October 31,                                                
 2014                        Fixed Price  70,000 GJ          $3.10-$4.55/GJ 
April 1, 2014 to March 31,                                                  
 2015                        Fixed Price 140,000 GJ          $3.20-$3.83/GJ 
November 1, 2014 to March                                                   
 31, 2015                    Fixed Price  90,000 GJ           $3.81-$4.87GJ 
April 1, 2015 to October 31,                                                
 2015                        Fixed Price  70,000 GJ         $3.285-$3.91/GJ 
April 1, 2015 to March 31,                                                  
 2016                        Fixed Price  25,000 GJ         $3.915-$4.05/GJ 
----------------------------------------------------------------------------

As at June 30, 2014, Peyto had committed to the future sale of 120,000 barrels of propane at an average price of $43.81 CAD ($41.03 USD) per barrel and 94,362,500 gigajoules (GJ) of natural gas at an average price of $3.71 per GJ or $4.26 per mcf. Had these contracts been closed on June 30, 2014, Peyto would have realized a net loss in the amount of $43.2 million. If the AECO gas price on June 30, 2014 were to increase by $1/GJ, the unrealized loss would increase by approximately $94.4 million. An opposite change in commodity prices rates would result in an opposite impact on other comprehensive income.

Subsequent to June 30, 2014 Peyto entered into the following contracts:


----------------------------------------------------------------------------
Natural Gas                                   Daily                    Price
Period Hedged                       Type     Volume                    (CAD)
----------------------------------------------------------------------------
November 1, 2014 to March                                                   
 31, 2015                    Fixed Price  30,000 GJ           $3.70-$4.26/GJ
April 1, 2015 to March 31,                                                  
 2016                        Fixed Price  30,000 GJ           $3.56-$4.00/GJ
----------------------------------------------------------------------------

9.  Commitments 

In addition to those recorded on the Company's balance sheet, the following is a summary of Peyto's contractual obligations and commitments as at June 30, 2014:


                                 2014   2015   2016   2017   2018 Thereafter
----------------------------------------------------------------------------
Interest payments(1)            6,115 12,230 12,230 12,230 12,230     22,755
Transportation commitments      9,002 19,785 19,431 15,631 11,917     15,793
Operating leases                1,209  2,380  1,863  1,654  1,295     10,356
----------------------------------------------------------------------------
Total                          16,326 34,395 33,524 29,515 25,442     48,904
----------------------------------------------------------------------------
(1) Fixed interest payments on senior unsecured notes                       

10. Contingencies 

On October 31, 2013, Peyto was named as a party to a statement of claim received with respect to transactions between Poseidon Concepts Corp. and Open Range Energy Corp. On July 3, 2014, the Plaintiffs filed a lawsuit with the Court against KPMG LLP, Poseidon's and Old Open Range's former auditors, making allegations substantially similar to those in the other claims. On July 29, 2014, KPMG LLP filed a statement of defense and a third party claim against Poseidon, the Company and the former directors and officers of Poseidon. The third party claim seeks, among other things, an indemnity, or alternatively contribution, from the third party defendants with respect to any judgment awarded against KPMG LLP. The allegations contained in these claims are based on factual matters that pre-existed Peyto's involvement with New Open Range. However, Peyto intends to aggressively protect its interests and the interests of its shareholders and will seek all available legal remedies in defending the action. Management continues to assess the nature of this claim, in conjunction with their legal advisors.


Officers                                                                    
  Darren Gee                                                                
  President and Chief Executive       Tim Louie                             
  Officer                             Vice President, Land                  
                                                                            
  Scott Robinson                                                            
  Executive Vice President and Chief  David Thomas                          
  Operating Officer                   Vice President, Exploration           
                                                                            
  Kathy Turgeon                                                             
  Vice President, Finance and Chief   Jean-Paul Lachance                    
  Financial Officer                   Vice President, Exploitation          
                                                                            
  Stephen Chetner                                                           
  Corporate Secretary                                                       
Directors                                                                   
  Don Gray, Chairman                                                        
  Stephen Chetner                                                           
  Brian Davis                                                               
  Michael MacBean, Lead Independent Director                                
  Darren Gee                                                                
  Gregory Fletcher                                                          
  Scott Robinson                                                            
                                                                            
Auditors                                                                    
  Deloitte LLP                                                              
                                                                            
Solicitors                                                                  
  Burnet, Duckworth & Palmer LLP                                            
                                                                            
Bankers                                                                     
  Bank of Montreal                                                          
  Union Bank, Canada Branch                                                 
  Royal Bank of Canada                                                      
  Canadian Imperial Bank of Commerce                                        
  The Toronto-Dominion Bank                                                 
  Bank of Nova Scotia                                                       
  HSBC Bank Canada                                                          
  Alberta Treasury Branches                                                 
  Canadian Western Bank                                                     
                                                                            
Transfer Agent                                                              
  Valiant Trust Company                                                     
                                                                            
Head Office                                                                 
  1500, 250 - 2nd Street SW                                                 
  Calgary, AB                                                               
  T2P 0C1                                                                   
  Phone: 403.261.6081                                                       
  Fax: 403.451.4100                                                         
  Web: http://www.peyto.com/                                                
  Stock Listing Symbol: PEY.TO                                              
  Toronto Stock Exchange                                                    

Contacts:
Peyto Energy Trust
Darren Gee
President and CEO
403.261.6081
403.451.4100 (FAX)
www.peyto.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
Cloud services are the newest tool in the arsenal of IT products in the market today. These cloud services integrate process and tools. In order to use these products effectively, organizations must have a good understanding of themselves and their business requirements. In his session at 15th Cloud Expo, Brian Lewis, Principal Architect at Verizon Cloud, will outline key areas of organizational focus, and how to formalize an actionable plan when migrating applications and internal services to...
SYS-CON Events announced today that ElasticBox is holding a Hackathon at DevOps Summit, November 6 from 12 pm -4 pm at the Santa Clara Convention Center in Santa Clara, CA. You can enter as an individual or team of up to 10 developers. A New Star Is Born Every Month! All completed ElasticBoxes will then be sent to a judging panel - 12 winners will be featured on the ElasticBox website in 2015. All entrants will receive five full enterprise licenses for one year + ElasticBox headphones + Elasti...
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT tranformation? In his session at 15th Cloud Expo, John Hatem, head of V...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SYS-CON Events announced today that Calm.io has been named “Bronze Sponsor” of DevOps Summit Silicon Valley, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Calm.io is a cloud orchestration platform for AWS, vCenter, OpenStack, or bare metal, that runs your CL tools puppet, Chef, shell, git, Jenkins, nagios, and will soon support New Relic and Docker. It can run hosted, or on premise and provides VM automation / expiry, self-service portals,...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, will focus on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud pla...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
As Platform as a Service (PaaS) matures as a category, developers should have the ability to use the programming language of their choice to build applications and have access to a wide array of services. Bluemix is IBM's open cloud development platform that enables users to easily build cloud-based, creative mobile and web applications without having to spend large amounts of time and resources on configuring infrastructure and multiple software licenses. In this track, you will learn about the...
Blue Box has closed a $10 million Series B financing. The round was led by a strategic investor and included participation from prior investors including Voyager Capital and Founders Collective, as well as the Blue Box executive team. This round follows a $4.3 million Series A closed in December of 2012 and led by Voyager Capital. In May of this year, the company announced general availability of its private cloud as a service offering, Blue Box Cloud. Since that release, the company has dem...
SYS-CON Events announced today that Verizon has been named "Gold Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic network...
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
Cloudwick, the leading big data DevOps service and solution provider to the Fortune 1000, announced Big Loop, its multi-vendor operations platform. Cloudwick Big Loop creates greater collaboration between Fortune 1000 IT staff, developers and their database management systems as well as big data vendors. This allows customers to comprehensively manage and oversee their entire infrastructure, which leads to more successful production cluster operations, and scale-out. Cloudwick Big Loop supports ...
To manage complex web services with lots of calls to the cloud, many businesses have invested in Application Performance Management (APM) and Network Performance Management (NPM) tools. Together APM and NPM tools are essential aids in improving a business’s infrastructure required to support an effective web experience… but they are missing a critical component – Internet visibility. Internet connectivity has always played a role in customer access to web presence, but in the past few years use...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation...
What are the benefits of using an enterprise-grade orchestration platform? In their session at 15th Cloud Expo, Jeff Tegethoff, CEO of Appcore, and Kedar Poduri, Senior Director of Product Management at Citrix Systems, will take a closer look at the architectural design factors needed to support diverse workloads and how to run these workloads efficiently as a service provider. They will also discuss how to deploy private cloud environments in 15 minutes or less.
Headquartered in Santa Monica, California, Bitium was founded by Kriz and Erik Gustavson. The 1,500 cloud-based application using Bitium’s analytics, app management, and single sign-on services include bug trackers, customer service dashboards, Google Apps, and social networks. The firm states website administrators can do multiple tasks online without revealing passwords. Bitium’s advisors include Microsoft’s former CMO and the former senior vice president of strategy, the founder and CEO of Li...