InPlay Oil (IPOOF) Valuation Update - Jan 30

[dan_s]

At the time of this post IPOOF was trading at $1.67US.

Based on the fresh 2024 guidance that InPlay announced on January 29th, I have updated my forecast/valuation model. My current valuation is lowered by $0.65 to $4.70US per share ($6.35Cdn per share).

I like InPlay's capital program for 2024, which is more conservative than the Company's previous guidance. Focus this year is to drill fewer wells, but focus on more oil prone areas within their leasehold. InPlay's flexibility is a BIG PLUS.

They are going to generate a lot more free cash flow this year; ~$25Cdn million, based on my forecast. This FCF more than covers their current monthly dividends ($0.015Cdn/share) and gives them the ability to make some bolt-on acquisitions. If they do make acquisitions, I expect them to be immediately accretive to operating cash flow.

If oil prices do move higher, which I expect them to do, InPlay is likely to add more wells to this year's drilling program late in the year.

I own this one for the 8% dividend yield and a whole lot of high-quality Running Room.

My updated forecast/valuation model for InPlay has been posted to the EPG website.