Energy: Oil & Gas - Bahamas Petroleum Company Plc

More documents

Recommendations

Info

November 5, 2010 Europe: Energy: Oil & Gas - E&P Exhibit 44: Medium term exploration as % of value Includes cash/debt % of value lying in "medium term exploration" 120% 100% 80% 60% 40% 20% 0% Chariot Oil & Gas BPC Tower Dominion Sterling Resources Energy Source: Goldman Sachs Research estimates. Medium term explorers: Long dated re-rating potential could be significant In order to gain exposure to this theme, we have isolated those companies which have little exploration activity in the short term but which have high levels of high-impact exploration beyond 12 months. In order to account for the increased risk associated with longer dated exploration (i.e. delay of drilling catalysts and potential issues with securing rigs) we apply a 50% discount to exploration value beyond 3Q 2011. We also include only the first few prospects in any new basin as in the event of dry wells we would not expect drilling to continue. The companies that we would highlight as having particular exposure to this theme are BPC (Bahamas), Chariot Oil & Gas (Namibia), Tower Resources (Namibia), Sterling Energy (Cameroon and Madagascar), Dominion (East Africa) and Aminex (onshore Tanzania). We note that we are less likely to ascribe value for medium term exploration to larger companies (apart from those involved in new plays) except where the medium term exploration is a significant part of the investment case and we typically we exclude catalysts being drilled beyond 12 months. Aminex Plc Cove Energy Desire PA Aurelian Amerisur Hardy Oil Max Northern Valiant Petroleum Resources Petroleum Petroleum Petroleum Exhibit 45: Re-rating potential from exploration catalysts beyond 12 months Assuming 100% de-risking Source: Goldman Sachs Research estimates. Goldman Sachs Global Investment Research 38 3500% 3000% 2500% 2000% 1500% 1000% 500% 0%
November 5, 2010 Europe: Energy: Oil & Gas - E&P Medium term explorers: Market more conservative than our 50% discount to medium term value To isolate the value in our estimates that can be attributed to the Medium Term Explorers theme we strip out core value and shortterm exploration value. This allows us to calculate the value implied by the market for medium term barrels. We find that, despite our 50% discount applied to all medium term exploration (on top of what is effectively a discount for later assumed sanction dates in the event of success), the market is even more conservative – our estimates still suggest 65% upside to our target prices, despite this downward adjustment. Of the medium term explorers, we consider Aminex’s exploration onshore Tanzania to be a “free option”, given sufficient value in its core value in the US to justify the current share price. Chariot is the most expensive of the medium term explorers, with the market either ascribing value beyond the first prospects that the company is likely to drill or (more likely in our view) beginning to remove the time horizon discount as drilling approaches (we currently estimate the company’s first well in 4Q 2011). Although there is still room for the stock to outperform if we remove our medium term discount, we believe that the other companies in our screen offer a cheaper way in which to gain exposure this theme. Exhibit 46: Medium term exploration value generally undervalued despite our 50% discount – Chariot the most expensive name; Aminex a “free option” on medium term exploration Non medium term exploration value (per GS) (US$mn) Source: Goldman Sachs Research estimates, Bloomberg. Implied medium term exploration value given by Medium term value per GS (US$mn) Risked medium term exploration barrels Implied EV/boe in medium term exploration per GS Implied % GS value ascribed by market to % value in medium term Upside / downside to target price Upside to target price if medium term discount removed Catalysts Market cap Cash (US$mn) (US$mn) market (US$mn) (US$/bl) barrels exploration BPC 99 1.5 8 90.0 269.6 53 5.1 33% 97% 159% 410% Bahamas Aminex Plc 54 11.6 68 ‐26.1 55.4 18 3.0 ‐47% 45% 103% 170% Tanzania Dominion 92 ‐22.4 58 56.4 121.0 85 1.4 47% 68% 48% 161% DRC, Tanzania Tower Resources 65 8.6 7 49.0 90.1 63 1.4 54% 93% 33% 142% Namibia, Uganda Sterling Energy 206 113.9 5 86.4 201.1 56 3.6 43% 97% 40% 128% Cameroon, Madagascar Chariot Oil & Gas 424 16.2 ‐17 424.6 478.6 184 2.6 89% 104% 5% 99% Namibia Average 37% 84% 65% 185% Goldman Sachs Global Investment Research 39
Page 1 and 2: November 5, 2010 Europe: Energy: Oi
Page 37: November 5, 2010 Europe: Energy: Oi
Page 89 and 90:
November 5, 2010 Europe: Energy: Oi
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Page 263 and 264:
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
Page 271 and 272:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
Page 287 and 288:
Page 289:
show all

Energy: Oil & Gas - Bahamas Petroleum Company Plc

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?