Valeura Energy Inc T.VLE

PE ratio

[goldwatch69]

Oil and gas sector PE typically low due to ongoing capex drilling to sustain output.  Worth noting that capex is not part of income expense and not considered in calculating earnings. Capex is accounted for by low PE.

That said, VET is trading around 3 PE. From Simply Wallstreet, "VET is good value based on its Price-To-Earnings Ratio (2.7x) compared to the peer average (4.8x)."

VLE expected net income forecast for 12 months when all is said and done works out to approximately CA$462 million based on the company estimate of US$33 million, 87.5% ownership, tax losses applied and current exchange.  At 95 million shares, net EPS works out to CA$4.86.  That's $4.86 per share.

Simply put, to reach a PE of 2, the SP target is anywhere between $9.50 and $10 a share.  Imagine a PE of 3 or 4!

The Q1 earnings report is going to be very interesting!

[Hannamuk]

First 2022 Q4 report!

[Buyreallow]

Capex is reported through the applicable depreciation on the balance sheet over the years following the expenditures

[AucontraireII]

And remember, this is all for just the first deal...

[Hannamuk]

You mean second? Mubadala   

[BERationale]

It will be valued on cash flow, not earnings (but similar multiples). Also the other key valuation metric will be the reserve report and the PDP & 2P NAV it spits out. That will be announced in Q1 per management along with guidance on cash flow. IMHO Q4 2022 and Q1 2023 results are largely irrelevant outside of what the balance sheet will look like with the cash from the effective date. It'

[SMlachake]

Mostly agree with your Rationale here BE.. except on the relevance of Q4, 2022 and Q1 2023 financials. Imo, they are quite significant in proving a track record to the narrative. A company with a great assets/reserves, great outlook and half year production history is far superior to one with a the same assets and outlook and no production history, including the human capital and functional

[goldwatch69]

Agreed  "Valeura anticipates closing the Acquisition in Q1 2023 subject to the satisfaction and/or waiver of all conditions under the SPA. Thereafter, the Company intends to provide an operational guidance outlook for 2023." When that event occurs, a more realistic valuation will materialize at that moment, within days, perhaps a week or so. I'm looking 12 months down the