Oil Valuation

Topics: Discounted cash flow, Cash flow, Net present value Pages: 9 (2569 words) Published: December 22, 2014
Oil & Gas Valuation – Quick Reference 
 
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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       24,882

Maximum
75th Percentile
Median
25th Percentile
Minimum

$    61,989
      31,439
$    28,968
      23,951
      15,489

$    64,381 $      8,447 $       12,659 $       16,428       40,006          5,927            8,223            9,855 $    37,368 $      5,270 $         7,232 $         7,654       31,620          4,581            5,019            5,534       24,882          1,761            4,375            4,949

      19,350.0
      15,862.0
      14,226.8
      13,917.9
      10,776.1

      3,870.0
      3,778.6
      3,561.9
      2,735.5
      2,118.0

XTO Energy Inc.

$    24,542

$    34,686

      14,827.3

      2,863.6

Valuation Statistics

Capitalization
Equity
(1)

$      7,150

$         7,416

Enterprise Value / 

Developed

R / P
Oil

Ratio
(4)

Areas
/ Proved Mix % 
US Diversified
58.4%
7.8%
International; US‐Focused
70.5%
30.9%
International
77.3%
76.2%
International
69.1%
47.8%
US & Canada
70.3%
18.0%
US, Canada & Trinidad
54.4%
15.6%

US Diversified

(Years)
            15.7
            10.5
            13.7
            11.1
            11.7
            13.9

77.3%
70.4%
69.7%
61.1%
54.4%

76.2%
43.6%
24.5%
16.2%
7.8%

            15.7
            13.9
            12.7
            11.3
            10.5

60.7%

13.9%             14.2

Enterprise Value / 

(3)

Enterprise
(1)(2)

$         6,818

Proved
Production

EBITDAX

Proved

Daily

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       24,882

TTM
12/31/2010 12/31/2011 Reserves Production
6.6 x
6.5 x
6.0 x...
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