BNE Best Risk Adjusted return to NAV. Above YGR- near 2x PDPBNE trades at 76% of NPV 10 PDP at flat pricing of $59 WTI, $-7.7 EDM, $1.70 AECO, $1.33 USD. Note that this is comparably lower than the PDP NPV reported, 715mm value in AIF. The CDN EP's all use escalating price forecasts, or rather, their contracted reserve consulatants Sproule GLJ ect.
Thus i aimed to construct an NAV based on current and flat modelling of forecasts, to get a fra of reference for the current equity pricing of BNE, and other peers.
By comparison of notional discounted value to mkt. cap (table below), BNE is third behind MEG, which is a very unique special situation with a ton of leverage risk, and PEY, another company i think is also very undervalued and a great buy currently.
Whats more is that this list already comprises some of the most cheaply traded EP's - i.e if you run a large cap US EP or list of most small and mids are far higher premiums to NAV than what these companies are at.
Thus, BNE is among the best value offering relative to the return that can be generated out of stated reserves, existing in the EP space.
BNE has some of the highest PDP RLI out of the list, over 8.5 years. CJ also has a high PDP to EV ratio, the highest at over 10x, but they similarly don't have the level of additional reserves RLI that say MEG or PEY or BNE have.
| Ticker | NPV 10 PDP Value | EV | % EV | % mk Cap | PUD + Prob. BOE | Unlev. Netback (F&D, maint) | Nominal PUD+P Value | 2P RLI | NPV 10 PUD+P Value |
| OBE | $306,515,953 | $540,487,875 | 56.7% | -66.5% | 51,193,987 | $5.57 | $285,317,817 | 12.56 | $158,527,177 |
| BNE | $391,374,318 | $516,986,420 | 75.7% | 33.7% | 61,638,128 | $12.97 | $799,321,587 | 21.88 | $319,966,003 |
| YGR | $247,206,354 | $419,502,000 | 58.9% | 25.6% | 102,583,522 | $10.32 | $1,058,165,945 | 25.74 | $375,748,139 |
| CJ | $541,360,777 | $572,442,000 | 94.6% | 90.1% | 35,963,260 | $14.40 | $517,886,365 | 14.80 | $264,582,402 |
| MEG | $3,890,012,112 | $4,853,770,000 | 80.1% | 26.4% | 2,533,825,095 | $18.25 | $46,245,690,884 | 88.18 | $5,243,582,150 |
| CPG | $5,012,790,450 | $6,617,514,000 | 75.8% | 38.4% | 601,265,435 | $10.50 | $6,315,966,646 | 15.85 | $3,104,613,901 |
| BTE | $1,845,983,593 | $3,547,650,000 | 52.0% | -36.7% | 385,537,129 | $11.45 | $4,415,869,821 | 14.87 | $2,249,554,988 |
| WCP | $2,582,047,796 | $3,294,916,000 | 78.4% | 64.3% | 264,325,900 | $9.19 | $2,429,063,021 | 18.96 | $1,070,925,007 |
| ERF | $1,766,203,556 | $2,950,560,000 | 59.9% | 53.1% | 230,266,414 | $6.03 | $1,388,771,849 | 12.02 | $787,970,535 |
| VET | $2,277,300,959 | $6,450,460,000 | 35.3% | 8.3% | 296,075,168 | $18.42 | $5,453,926,402 | 12.98 | $2,981,832,377 |
| PXT | $1,626,237,153 | $3,234,700,270 | 50.3% | 52.1% | 118,794,230 | $24.47 | $2,906,394,576 | 9.58 | $1,816,504,386 |
| GTE | $885,730,732 | $1,454,900,000 | 60.9% | 45.5% | 100,098,818 | $14.80 | $1,481,404,713 | 9.26 | $937,818,448 |
| PEY | $1,687,443,415 | $2,031,600,000 | 83.1% | 58.6% | 528,691,281 | $8.60 | $4,548,003,032 | 25.24 | $1,639,404,722 |
| BIR | $1,189,471,398 | $1,514,171,720 | 78.6% | 63.4% | 801,208,258 | $5.25 | $4,207,841,168 | 35.68 | $1,139,999,377 |
| POU | $400,614,313 | $1,923,040,000 | 20.8% | -48.2% | 479,534,372 | $2.09 | $999,939,279 | 20.96 | $412,352,178 |
and
| | NPV 10 Notional Value based on Stated Reserves | VS- Current Share Price |
| OBE | $465,043,130 | -54% |
| BNE | $711,340,322 | 100% |
| YGR | $622,954,493 | 88% |
| CJ | $805,943,179 | 74% |
| MEG | $9,133,594,262 | 327% |
| CPG | $8,117,404,352 | 58% |
| BTE | $4,095,538,581 | 44% |
| WCP | $3,652,972,802 | 18% |
| ERF | $2,554,174,092 | -16% |
| VET | $5,259,133,336 | -26% |
| PXT | $3,442,741,539 | 6% |
| GTE | $1,823,549,180 | 35% |
| PEY | $3,326,848,137 | 156% |
| BIR | $2,329,470,775 | 92% |
| POU | $812,966,491 | -108% |
/
/
Here is a portion of the BNE PDP model i used:
| BNE | PDP NAV | | | | |
| 12,700 | y1 | y2 | y3 | y4 | y5 |
| PROD | 4,148,773 | 3,401,993 | 2,857,674 | 2,486,177 | 2,212,697 |
| DECLINE | 10.50% | 18.00% | 16.00% | 13.00% | 11.00% |
| % IP | 89.50% | 73.39% | 61.65% | 53.63% | 47.73% |
| BOE TOTAL | 39,861,872 | | | | |
| | | | | | |
| REVENUE | $190,781,323.10 | $156,440,684.95 | $131,410,175.35 | $114,326,852.56 | $101,750,898.78 |
| | | | | | |
| roy/tax | $20,413,601.57 | $16,739,153.29 | $14,060,888.76 | $12,232,973.22 | $10,887,346.17 |
| opex | $65,556,828.66 | $61,593,873.87 | $56,537,355.91 | $52,036,730.08 | $48,179,439.80 |
| /boe | $15.80 | $18.11 | $19.78 | $20.93 | $21.77 |
| Decomm | $1,372,920.00 | 1,427,837 | 1,484,950 | 1,544,348 | 1,606,122 |
| netback | 103,437,957 | 76,679,803 | 59,326,961 | 48,512,780 | 41,077,969 |
| | | | | | |
| 10.00% | | | | | |
| | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 |
| | $98,624,222 | $66,464,839 | $46,748,791 | $34,752,157 | $26,751,114 |
| NPV | $391,374,318 | | | | |
| Share Price | $1.96 | 33.67% | | | |
/
/
The netback buildup for the table- Unlevered netback for the PUD+P boe netback, adds back interest, then deducts expected future capex for maint. and development /boe. Per the netback below, sustaining capex is $12.50 /BOE @ 58mm dev/maintenance.
| WTI Price | 59.14 | | | |
| diff | -7.7 | | | |
| exchange | 1.33 | | | |
| | 68.42 | | | |
| Quality dis. | -3.25 | | volume | $$/ Day |
| Realized | $65.17 | | 7800 | $508,288.56 |
| | | | | |
| AECO | $1.87 | heat adj. | 23950 | $44,786.50 |
| NGL’s | $34.21 | | 920 | $31,470.99 |
| | | | 12712 | $584,546.05 |
| | | /boe | | |
| Revenue | $213,359,308.98 | $45.99 | 68.60% | Total Liquids |
| COP: | | | | |
| Gorr @ 4.1% | $8,747,731.67 | $1.89 | | |
| Crown @ slide | $14,295,073.70 | $3.08 | | |
| OPEX | $66,348,544.17 | $14.30 | | |
| SG&A | $5,799,697.92 | $1.25 | | |
| decomm | $1,346,000.00 | $0.29 | | |
| SBC | $2,236,000.00 | $0.48 | | |
| Finance | $15,400,000.00 | $3.32 | | |
| COP | $114,173,047.45 | $24.61 | /qtr | |
| Cash Op netback | $102,768,261.53 | $22.15 | $25,692,065.38 | |
| Netback | $99,186,261.53 | $21.38 | | |
| | | | | |
| Add: Interest | $15,400,000.00 | $3.32 | | |
| EBITDA | $118,168,261.53 | | | |
| | | | | |
| Less: Sus. Capex | $58,000,000.00 | $12.50 | | |
| Free Flow – assets | $60,168,261.53 | | | |
| | | /share | | |
| BNE FCF | $44,768,262 | $1.34 | $11,192,065.38 | |