I spent the morning working on my forecast model for InPlay Oil and reviewing the updated profile on the Company that was prepared by one of our very sharp MBAs, who did an excellent job. InPlay is now in our High Yield Income Portfolio.
Before I finalize a profile update, I always check with TipRanks to see what other energy sector analysts think of the Company. Five respected Canadian based energy sector analysts have updated their price targets since InPlay announced Q4 results and updated guidance for 2024. They all rate it a BUY and the average price target is $4.17Cdn per share.
The most recent detailed research report on TipRanks is from Michael Heim, a 5-Star rated analyst (by TipRanks) that is the Senior Vice President, Equity Research Analyst, Energy & Transportation at Noble Capital Markets. His updated price target is $8.00Cdn.
Michael Heim's report is detailed and it contains forecast models for 2024 and 2025.
If you'd like to read his report, send me an e-mail and I will forward it to you: dmsteffens@comcast.net
My updated forecast/valuation model for InPlay has been posted to the EPG website. The updated profile will be emailed to all members tomorrow morning. My current valuation is $5.00Cdn ($3.70US for IPOOF).
At the time of this post, IPO.TO was trading at $2.44Cdn < Dividend yield is ~7.4%
InPlay Oil (IPOOF) Valuation Update - Apr 2
InPlay Oil (IPOOF) Valuation Update - Apr 2
Last edited by dan_s on Tue Apr 02, 2024 2:58 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: InPlay Oil (IPOOF) Valuation Update - Apr 2
The profile has been posted to the EPG website. Take a long hard look at the box on page one.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: InPlay Oil (IPOOF) Valuation Update - Apr 2
My initial post contained an error. I thought Michael Heim's price target was in Canadian dollars. When I read the full report I saw this.
"Our price target on the shares of IPOOF is $6.00 per share. Our price target has been raised four times in the last eighteen
months due to continued higher energy prices, favorable drilling and operating results, and a recent acquisition that we believe
will be immediately accretive to earnings and cash flow. We believe the best way to value exploration and production
companies is through a discounted cash flow analysis. We estimate that the company would need to spend C$40 million
annually to maintain its current production rate. We assume a cost of debt of 12%, a cost of equity of 15%, and an assumed
market return of 8%. Based on a two-stage discounted cash flow analysis that incorporates a terminal year based on long-term
oil and gas price assumptions of US$60/bbl and US$3.50/mcf, we estimate a fair value for InPlay’s enterprise value to be worth
approximately US$450 million and its equity to be worth US$450 million after subtracting off expected net debt of US$0 million
at the end of 2022. Our price target for the shares of IPOOF on the OTC market is $6.00 based on a share count of 85 million,
proforma to included shares issued in conjunction with the Prairie Storm acquisition. Our price target on the shares of IPOOF
equates to a price target of C$8.00 for the shares of IPO on the Toronto exchange."
InPlay's CEO, Doug Bartole will be speaking at our Houston luncheon on April 23. SEATING IS LIMITED TO 40 because we could only get the smaller room at Maggiano's, so register early if you wish to attend.
"Our price target on the shares of IPOOF is $6.00 per share. Our price target has been raised four times in the last eighteen
months due to continued higher energy prices, favorable drilling and operating results, and a recent acquisition that we believe
will be immediately accretive to earnings and cash flow. We believe the best way to value exploration and production
companies is through a discounted cash flow analysis. We estimate that the company would need to spend C$40 million
annually to maintain its current production rate. We assume a cost of debt of 12%, a cost of equity of 15%, and an assumed
market return of 8%. Based on a two-stage discounted cash flow analysis that incorporates a terminal year based on long-term
oil and gas price assumptions of US$60/bbl and US$3.50/mcf, we estimate a fair value for InPlay’s enterprise value to be worth
approximately US$450 million and its equity to be worth US$450 million after subtracting off expected net debt of US$0 million
at the end of 2022. Our price target for the shares of IPOOF on the OTC market is $6.00 based on a share count of 85 million,
proforma to included shares issued in conjunction with the Prairie Storm acquisition. Our price target on the shares of IPOOF
equates to a price target of C$8.00 for the shares of IPO on the Toronto exchange."
InPlay's CEO, Doug Bartole will be speaking at our Houston luncheon on April 23. SEATING IS LIMITED TO 40 because we could only get the smaller room at Maggiano's, so register early if you wish to attend.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group