Oil Valuation
Oil & Gas Valuation – Quick Reference http://breakingintowallstreet.com
Oil & Gas Valuation: Comparable Public Companies & Precedent Transactions Picking a set of comparable companies or precedent transactions for an oil & gas company is very similar to how you would pick them for any other company – here are the differences: 1. Rather than cutting the set by revenue or EBITDA, you would instead select the set based on Proved
Reserves or Daily Production (in addition to the normal geographic and industry criteria).
2. Instead of traditional metrics like revenue or EPS, you list the metrics and multiples that are relevant to an energy company: EBITDAX, Proved Reserves, Daily Production, the Oil Mix %, and so on. Please see the previous handout in this course on Oil & Gas Key Metrics to see the full list and to learn how to calculate these metrics and multiples. Comparable Companies ‐ North American Oil & Gas E&P Companies with Over 10 Tcfe Proved Reserves
($ in Millions Except Per Share, Reserve, and Production Data)
Operating Statistics
Capitalization
Equity
(1)
Proved
Daily
Reserves
Production
TTM
12/31/2010 12/31/2011
$ 4,509 $ 4,571 $ 4,949 5,743 8,099 9,908 8,447 12,659 16,428 5,989 8,264 9,694 4,797 6,364 5,613 1,761 4,375 5,507
(Bcfe) 14,254.0 13,824.0 19,350.0 14,199.5 16,398.0 10,776.1
(MMcfe) 2,480.8 3,624.0 3,870.0 3,499.7 3,830.1 2,118.0
(3)
Enterprise
(1)(2)
EBITDAX
Company Name
Chesapeake Energy Corporation
Anadarko Petroleum
Occidental Petroleum Corporation
Apache Corporation
Devon Energy Corporation
EOG Resources, Inc.
Value
Value
$ 15,489 $ 29,710 28,937 40,880 61,989 64,381 32,252 37,384 28,999 37,353 22,289
Oil & Gas Valuation: Comparable Public Companies & Precedent Transactions Picking a set of comparable companies or precedent transactions for an oil & gas company is very similar to how you would pick them for any other company – here are the differences: 1. Rather than cutting the set by revenue or EBITDA, you would instead select the set based on Proved
Reserves or Daily Production (in addition to the normal geographic and industry criteria).
2. Instead of traditional metrics like revenue or EPS, you list the metrics and multiples that are relevant to an energy company: EBITDAX, Proved Reserves, Daily Production, the Oil Mix %, and so on. Please see the previous handout in this course on Oil & Gas Key Metrics to see the full list and to learn how to calculate these metrics and multiples. Comparable Companies ‐ North American Oil & Gas E&P Companies with Over 10 Tcfe Proved Reserves
($ in Millions Except Per Share, Reserve, and Production Data)
Operating Statistics
Capitalization
Equity
(1)
Proved
Daily
Reserves
Production
TTM
12/31/2010 12/31/2011
$ 4,509 $ 4,571 $ 4,949 5,743 8,099 9,908 8,447 12,659 16,428 5,989 8,264 9,694 4,797 6,364 5,613 1,761 4,375 5,507
(Bcfe) 14,254.0 13,824.0 19,350.0 14,199.5 16,398.0 10,776.1
(MMcfe) 2,480.8 3,624.0 3,870.0 3,499.7 3,830.1 2,118.0
(3)
Enterprise
(1)(2)
EBITDAX
Company Name
Chesapeake Energy Corporation
Anadarko Petroleum
Occidental Petroleum Corporation
Apache Corporation
Devon Energy Corporation
EOG Resources, Inc.
Value
Value
$ 15,489 $ 29,710 28,937 40,880 61,989 64,381 32,252 37,384 28,999 37,353 22,289