More recent post by the author of the hydracapital blog This incorporates the price correction in the numbers. Copied from ceo.ca
@MS Some fun with TNZ numbers: NPV10AT for various reserve categories. PDP $48mm PUD $37mm Total PDP+PUD (1P) $86mm Probable $55mm Total Proved + Probable (2P): $141mm $58mm best estimate contingent (2C) (Vermeer, Rembrandt, L11-07 and L10-19) Total 2P+2C $199 million Current EV: $84mm market cap less $64mm positive working capital. That’s a $20mm EV for $200mm of mid-case NPV, 70% of which is either already on production or close enough to production to count as actual reserves, and you get the 21.4% holding in NGT for free, which pays around $5mm/year. So TNZ is trading right around 0.6x EV/CF (assumed annualized run rate of $30-35mm CF), and something like 0.10-0.15 EV/NPV10AT (2P+2C or 2P, after-tax), and you get a free pipeline interest. There isn’t a company out there without abandonment and TNZ has years and years of life on its assets. When this re-rates, it’s going to be epic IMO. Patience is a virtue.
@MS Some fun with TNZ numbers: NPV10AT for various reserve categories. PDP $48mm PUD $37mm Total PDP+PUD (1P) $86mm Probable $55mm Total Proved + Probable (2P): $141mm $58mm best estimate contingent (2C) (Vermeer, Rembrandt, L11-07 and L10-19) Total 2P+2C $199 million Current EV: $84mm market cap less $64mm positive working capital. That’s a $20mm EV for $200mm of mid-case NPV, 70% of which is either already on production or close enough to production to count as actual reserves, and you get the 21.4% holding in NGT for free, which pays around $5mm/year. So TNZ is trading right around 0.6x EV/CF (assumed annualized run rate of $30-35mm CF), and something like 0.10-0.15 EV/NPV10AT (2P+2C or 2P, after-tax), and you get a free pipeline interest. There isn’t a company out there without abandonment and TNZ has years and years of life on its assets. When this re-rates, it’s going to be epic IMO. Patience is a virtue.