Question's: Return Expectations for Energy Investor

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Fraser921
Posts: 3110
Joined: Mon Mar 22, 2021 11:48 am

Question's: Return Expectations for Energy Investor

Post by Fraser921 »

Return Expectations for Energy Investor

What should an investor expect investing in the energy sector?
- short term 1 year
- medium term 3 years
- longer term 5 years

10 % 15 % 20 % ????

All reserves calculated at "NPV10" are overstated as they are based on last years numbers. This years 12/23 lower prices means all NPV 10 calculations will be lower particularly for the gassers.

10 % doesn't motivate me to invest in the sector, I want more. You can get 5 % investing in Tbills
Answering my own question, I want 20 % return on "Free cash Flow"

The other point NPV10 values are based on all cash inputs and spending and timing of the cash flows.

Dan's models are based on "Cash flow" excludes cap x, not FCF free cash flow which is after spending for cap x. This is important to understand.
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