Post by
fullyautomatic on Feb 24, 2023 11:21am
Building an investment case
I been picking off shares on the CAD side for a bit and before I commit to a larger spot I ran a comparsion to a very similar sized company many of you may be familair with: OBE
Both companies are listed US/CAD sides and are actually very close in size. Up here in Alberta OBE comes up in conversation alot as a undervalued solid pick to choose if wanting exposure to an oil stock. I guess I would agree that it could be. I went to GTE instead for a bit. Here are the numbers:
All $ values have been converted to USD
GTE EV= $747M- WINNER GTE
OBE EV= $788M
GTE FY22 FCF= $129M- WINNER GTE
OBE FY22 FCF= $86M
GTE 1P MMBOE= 84- WINNER GTE
OBE 1P MMBOE= 76
GTE 23 GUIDED CAPEX= $210-250M
OBE 23 GUIDED CAPEX= $191-198M- WINNER OBE
GTE 23 GUIDED PRODUCTION= 32-34K BOE 100% BRENT OIL c/w heavy discount - WINNER GTE
OBE 23 GUIDED PRODUCTION= 32-33.5K BOE >66% WTI OIL
GTE 23 GUIDED FCF= $65M
OBE 23 GUIDED FCF= $77M- WINNER OBE.--- This line is what the market cares about most and I need to figure out how this is possible for OBE to beat GTE. My bet is that GTE meets targets, will OBE?
Both Co's say they are commited to full use of a NCIB in 23
Clearly there are risks to something crazy happening in Columbia and the effect that can have will hang on the GTE price. Canada isn't completely risk free either particularly if the crazy NDPers end up being elected in AB and issues again with heavy discounts or AECO disruptions
Feel free to poke holes in any of this
Comment by
lastpick on Feb 24, 2023 12:01pm
Did you calculate Enterprise Value (EV) = Market Cap - Cash + Debt? Using this fromula I get : GTE EV= $881MM; OBE EV= $1015MM
Comment by
fullyautomatic on Feb 24, 2023 12:24pm
Let me double check..... GTE CALC 298 MC + 580 BONDS - 127 CASH= $751M OBE CALC 582 MC + 233 NO CASH= $815M All these are using real time MC. OBE needs to be converted to USD... I think. the $317 debt is a CAD number in the report...... Again please correct possible errors.....