InPlay Oil (IPOOF) Valuation Update - Mar 13

[dan_s]

I have updated my forecast/valuation model for InPlay and posted it to the EPG website.

At the time of this post IPO.TO was trading for $2.33Cdn. First Call's target price is $4.66Cdn.

The stock is trading below the PV10 Net Asset Value of just its proved reserves, which is $4.71Cdn per share. There is no justification for this stock to be trading at less than 50% of PV10 NAV.

My valuation is $5.07Cdn based on 5X annualized operating cash flow per share for 2023-2025. 5X is reasonable for a company that has a strong balance sheet, lots of low-risk / high-return "Running Room" in core areas, generated more than enough free cash flow to fund their capex and pays nice monthly dividends (annualized dividend yield is 7.8%).

My valuation for IPOOF is $3.75US per share (using a 0.74 conversion rate).