Does it really matter how much the "barrels in the ground" are worth if the company is not generating cash flow? Most oil and gas e&p company valuation models focus on asset value, which is of little importance to equity investors if those assets are not generating cash flow. That is why our Oil and Gas E&P Company Equity Valuation Model for Excel uses a unique approach to value the cash flows generated by an E&P company rather than valuing barrels in the ground.
Unless you're planning on being the last creditor standing in a liquidation or looking to buy a company's assets directly, you should be looking at cash flows...not assets. The Oil and Gas E&P Company Equity Valuation Model for Excel does just that.
The Oil and Gas E&P Company Equity Valuation Model for Excel is an "out-of-the-box" professional valuation model tailored to analyzing and valuing exploration and production companies. It was developed by a CFA charterholder in order to provide oil and gas investors a way to value the equity of e&p companies directly (based on discounted cash flows) rather than valuing the assets and somehow extrapolating an approximate equity value from thin air. It is designed to accept information from publicly-available 10-K reports in order to calculate the total and per-share value of an oil and gas e&p business.
The model includes a basic and common-size income statement and balance sheet, an easy-to-use cost of equity and WACC calculator, a detailed oil industry-specific ratio analysis and a comprehensive oil industry-specific discounted cash flow (DCF) analysis. The DCF analysis calculates the per-share value based on both the weighted -average cost of capital and the SEC basis. Cells requiring user input are clearly highlighted, making valuations very easy to perform.
The model is also flexible, allowing the practitioner to vary the analysis based on variables such as: expected return on the overall market, perpetual future growth rate of cash flows, expected new investments, new discoveries, reserve adjustments, and the price of oil and gas. Changes made to one part of the model automatically flow through to the other parts, ultimately affecting the overall and per-share valuation of the company. (For example, lowering the assumed risk-free rate decreases the cost of equity, which decreases the WACC, which increases the valuation. By simply changing the risk-free rate, the valuation automatically increases. Similarly, an increase in the price of oil, with all other factors remaining equal, automatically increases the value of the company.)
Date and number fields may be re-formatted by the user (using Excel's built-in formatting capabilities) to accommodate non-US conventions.
The Oil and Gas E&P Company Equity Valuation Model for Excel is a professional-grade "out-of-the-box" valuation model designed to provide detailed valuations of oil and gas e&p companies from publicly-available information. It provides a detailed valuation while remaining flexible and easy-to-use.
This spreadsheet was developed by a CFA charterholder.
Our software runs on any version of Microsoft Excel from 97-2007.
All recent Microsoft operating systems are supported, including Windows 95, Windows 98, Windows 2000, Windows ME, Windows CE, Windows XP and Vista. Windows Mobile 5.0 and 6.0 are also supported, provided you have Microsoft Excel or Documents-To-Go installed on your mobile device.
It is also fully-compatible with MAC OS and OS X. You must be running Excel 2004 or 2008 for Mac.
