Tom: To pick my stocks, I analyze. Here goes:
CLOSING PRICE ON FRIDAY, OCT.3: US$19.60
# OF BASIC SHARES (TSX STATS) : 77,728,313
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QUOTED MARKET VALUE: US$ 1,523,000,000
What I would like to find out is how the market values the oil in the ground. Obviously, the above quoted market value includes many other assets whose value we can roughly approximate. We will probably differ in both the completeness and values of these approximations, so this may be viewed as a start:
Refinery: US$300 M
KAM Pipeline: 100 M
Buildings, Equipment, Gas Stations, Loading Docks, etc.: 100 M
Druzhba Terminal: 50 M
Roads: 37 M
Power Plant: 30 M
Goodwill with Papa, 6 years: 6 M
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OTHER THAN OIL ASSETS: US$ 623 M
This is higher, as it should be, than their book value. But not much, which indicates that the list is understandably incomplete. Subtracting yields the market value of the oil in the ground of some US$ 900 M.
Now, we can calculate the value that the imperfect market attaches to gradually less certain categories of PKN oil reserves:
Proved and probable: 518M barrels, US$1.74/barrel
Above+possible : 745M barrels, US$1.21
Above+ EOR : 915M barrels, US$0.98
Above+ potential :1,565M barrels, US$0.58
The market values the highest category at roughly the PKN finding costs. All the lower categories are valued way below the finding costs. IMHO, the oil in the ground is valued at about 1/4 of its real value and it is only a matter of time before one, or more of the oil giants move.
Forecaster |
