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Gold/Mining/Energy : Canadian Oil & Gas Companies
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To: Len Hynes who wrote (7165)3/6/2000 2:06:00 PM
From: SofaSpud  Read Replies (1) of 24921
 
Len - Multiples

I pulled out an old copy of the Nesbitt Burns Red Book to see if their report tallied with my recollection. It's the second quarter 1997 edition, which works from prices on March 14, 1997. Their small cap universe was 27 companies at the time. For their 1997 estimates, the companies were at an average 5.4x. On the basis of 1998 estimates, they were at 4.3x.

The range for the small caps in the current year was 11.1x (PacAlta) down to 3.2x (Richland).

For their universe of large cap producers (21 companies)the average for the current year estimates was 5.8x, and for the year-ahead estimates was 5.2x.

The range for large caps in the current year was a high of 8.5x (remember Amber Energy? Glad I was happy with the triple) down to 4.0 (CanOxy, before the Wascana acquisition).

That meshes with my memory -- that in reasonably good times, the best companies can get an 8x or 9x multiple, and the most can aspire to 5x without too much trouble.

Hope that helps.
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