InPlay Oil (IPOOF) Update - Oct 25

[dan_s]

Doug Bartole, InPlay's CEO will be speaking at our Houston luncheon tomorrow.

In preparation for the luncheon, I have updated my forecast/valuation for InPlay and posted it to the EPG website.
Note that my forecast is based on Canadian dollars.

IPOOF is currently trading for $1.35US
In my September newsletter my valuation was $2.90US

I am raising my current valuation to $3.25US because (a) financing needed for the Prairie Storm Acquisition has been secured and (b) oil, gas and NGL prices have moved higher in October. It should be noted that my valuation is still based on 5 X [(2021 CFPS X 2) + 2022 CFPS]. Since my valuations will equally weight 2021 and 2022 operating cash flow after the company releases Q3 actual results, my valuation will go up if the Company's Q3 results and guidance confirm my forecast.

IMPORTANT POINT: Since my valuation is based on operating cash flow there is nothing in the valuation for InPlay's large and valuable leasehold position in the Alberta East Basin Duvernay Shale play. At today's oil price, InPlay's 23,930 net acres (~290 net horizontal drilling locations) could have a market value that exceeds the Company's total current market value of $112 million.

First Call's Price Target for IPO.T is $2.67Cdn which translates to approximately $2.14US for IPOOF. When the Prairie Storm Acquisition closes, I expect the First Call price target to move toward my valuation.

Based on InPlay's Pro-forma Outlook for 2022 (as of 9/28/2021) next year's production should be approximately 9,150 Boe per day with a mix of approximately 49.2% crude oil, 36.1% natural gas and 14.7% NGLs.