TOG's NAV is C$6.10 (on 1P), Metrics, ARO, Decline rate & CJI was checking the most important key metrics for TOG and I believe TOG is fully valued with limited upside potential from here. It's good that TOG's leverage is manageable because it's slightly less than 2 times but Cardinal Energy's (CJ) leverage will also be less than 2 times in the second half of 2019 although it will raise its dividend by 50% in July, see its news.
In short, I think CJ's upside potential from here is much higher than TOG's. The fact that CJ has exposure both to light oil and medium oil, it's not enough to satisfy the tremendous valuation gap, I believe. Specifically:
TOG avoid disclosing its NAV per share on a proved reserves basis, see its latest reserves report. No word about it. But you can do the math because TOG discloses in its reserves report that its NPV-10 is C$1.57 billion for its proved reserves.
So including the debt and undeveloped land, TOG's NAV per share on a proven reserves basis is just
C$6.10 per share. Cardinal's (CJ) NAV per share on a proven reserves basis is C$9.59 per share, so CJ can triple from here. Again, this is proved reserves!
TOG's current enterprise value is C$1.4 billion, so it trades
C$50,000 per flowing barrel and C$10.1 per boe of 2P reserves.
CJ's current enterprise Value is just C$600 million, so it trades just
C$29,000 per flowing barrel and C$5.20 per boe of 2P reserves.
TOG's ARO are very high for its size, so TOG has to spend minimum 4% or almost C$20 million out of its annual cash flow for them.
TOG's ARO are C$412 million for 28,500 boepd while CJ's ARO is just C$117 million for 20,500 boepd. TOG's decline rate is 23% (see its presentation), so its annual Maintenance CapEx to keep the production flat is sizeable. CJ's decline rate is less than 12%, so its maintenance capex is just C$57 million annually.
Please post facts only. tia