Per my calculations, the 2013 cash flow from Malaysia is around $300 million. Applying a multiple of 4, the value will be $1.2 billion. Assuming China starts production in early 2014, the total annualized production will be around 5 million barrels. The cash flow, in my view, is $250 million (using Malaysia figures for approx.). Again at a multiple of 4, the value will be $1 billion. Coming to NG assets, the share of 600 bcf in the recent find and the exploration of other NG assets and the price of NG being around $16/mcf in Asia, to me a value of less than a billion looks conservative.
Hope management works towards getting the maximum value.
On a different note, does anyone know the production, reserves etc. of the gulf assets that were sold for $1 billion last year or so?
From recent WSJ article:
Goldman Sachs GS +0.79% is advising Newfield on the sale of its Asian assets, including stakes in both producing and prospective oil-and-gas fields offshore of Malaysia and China. A document sent to prospective investors said the Asian assets had operating earnings of US$657 million last year.
Again taking the 2012 figure of $657 million and adjusting for depreciation and income taxes, the net income would be around $250 million (not including China's future production of Pearl field). At a PE of 8, the value would be $2 billion excluding NG assets.
So, both calculations resulted in valuation of between $2 and $3 billion including NG assets. So a figure of $2.5 billion is not unrealistic.
At 40% tax, the net proceeds of $1.5 billion can be deployed as follows:
1) Pay debt which is very good
2) Buyback shares, based on price, which is good
3) Dividend - which is good
4) Drill which is not so good
Assuming the Intl assets are carried on the books for nothing, a $1 billion value added would equal to $7 per share - $1 billion/135 million shares.
In my opinion, the above calculations are very conservative. Also if 6% of proved reserves are valued over $2 billion, how much value can be put on the remaining 94%?
Stifel said they would pay down 1.1 bil in debt and I assume they thought the rest would go towards this year's cap ex shortfall. Don't know off hand but would think a few hundred million for cap ex. I think 1.5 is the conservative estimate.
The $1B based on production and reserves may be right, but most of the big gas play and leases are not reserves. This is potential, as part of the new gas play, which is hard to price. I say $1B to $3B, with the high end more likely, but who knows. I am surprised ConocoPhillips and Shell are not on the list, though maybe they go after the whole company.
Who on earth believes news reporters have half a brain. Reuters did not say their estimate was based on input from NFX or GS or any knowledgable source. News reporters are clueless and their opinions are never fact-based which they demonstrate over and over. I did not see any analysis supporting their number. My money is on GS and $1.5 billion to $2 billion value especially after NFX's huge, recent gas find. We'll know soon. GLTAL's
Fine by me. I wish the media would write a story stating the value is about 500 million, that way, when it sells for 1.5 - 2 billion like you stated, everyone is shocked and the share price sky rockets more. If the media says it's worth 3 billion but sells for 2.8, the stock probably gets hammered. Funny how things work sometimes.