Advantage Oil & Gas Ltd., together with its subsidiaries, acquires, exploits, develops, and produces natural gas in the Province of Alberta, Canada. More info.
The calculations below outline how an intrinsic value for
Advantage Oil & Gas
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (CAD, Millions)||CA$-4.00||CA$38.96||CA$50.50||CA$86.00||CA$90.00|
|Source||Analyst x4||Analyst x7||Analyst x2||Analyst x2||Analyst x1|
Discounted (@ 11.96%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = CA$90 × (1 + 2.13%) ÷ (11.96% – 2.13%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
CA$701 = CA$169 + CA$532
Value = Total value / Shares Outstanding (CA$701 / 186)Discount to Share Price
Value per share:
Current discount (share price of CA$3.73): 1.06%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 11.96% = 2.13% + (1.249 * 7.87%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (CA$693,642,683).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.249 = 1.022 (1 + (1- 26.5%) (30.13%))
Levered Beta used in calculation = 1.249
Mr. Andy J. Mah has been the Chief Executive Officer and President at Advantage Oil & Gas Ltd. ("AOG") since January 27, 2009 and April 27, 2011 respectively. Mr. Mah has over 24 years experience in the oil and gas industry. He served as the Chief Operating Officer of Longview Oil Corporation from December 15, 2010 to November 2013. He served as the President of Ketch Resources Ltd., Administrator of Ketch Resources Trust since September 2005 to June 2006. He served as Vice President of Production at TAQA North, Ltd. He served as the President and Chief Operating Officer at Advantage Oil & Gas Ltd. ("AOG") of Advantage Energy Incomes Fund from June 23, 2006 to January 27, 2009. Mr. Mah served as Chief Operating Officer of Ketch Resources Ltd. from January 2005 to September 2005. He served as an Executive Officer and Vice President of Engineering and Operations for TAQA North Ltd. (alternate Name Northrock Resources Ltd.) from August 1998 to January 2005. He serves as a Director of Ketch Resources Ltd. Mr. Mah has been a Director at Advantage Oil & Gas Ltd, since June 23, 2006. He served as a Director of TriOil Resources Ltd., since March 4, 2010. He holds a B.Sc. degree in Chemistry from University of Saskatchewan in 1980 and also a B.Sc. Degree in Chemical Engineering from University of Saskatchewan in 1982.
Average tenure and age of the Advantage Oil & Gas management team in years:
Average tenure and age of the Advantage Oil & Gas board of directors in years:
On top of this, AAV has produced CA$186.40M in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 89.20%, meaning that AAV’s operating cash is sufficient to cover its debt. … We can test if AAV’s debt levels are sustainable by measuring interest payments against earnings of a company. … For AAV, the ratio of 17.75x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.Next Steps: AAV’s high cash coverage and low debt levels indicate its ability to utilise its borrowings efficiently in order to generate ample cash flow.Simply Wall St - – Full article
A question to answer is whether Advantage Oil & Gas's current trading price of CA$3.99 reflective of the actual value of the small-cap? … According to my valuation model, Advantage Oil & Gas seems to be fairly priced at around 10.30% below my intrinsic value, which means if you buy Advantage Oil & Gas today, you’d be paying a fair price for it. … The price seems to be trading at fair value, which means there’s less benefit from mispricing.Simply Wall St - – Full article
It compares a stock’s price per share to the stock’s earnings per share. … Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for AAV Price per share = CA$5.4 Earnings per share = CA$0.35 ∴ Price-Earnings Ratio = CA$5.4 ÷ CA$0.35 = 15.5x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Since AAV's P/E of 15.5x is lower than its industry peers (16.7x), it means that investors are paying less than they should for each dollar of AAV's earnings.Simply Wall St - – Full article
Check out our latest analysis for Advantage Oil & Gas Peeling the layers of ROE – trisecting a company’s profitability Return on Equity (ROE) weighs Advantage Oil & Gas’s profit against the level of its shareholders’ equity. … This means Advantage Oil & Gas’s returns actually do not cover its own cost of equity, with a discrepancy of -5.71%. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity TSX:AAV Last Perf Dec 26th 17 The first component is profit margin, which measures how much of sales is retained after the company pays for all its expenses.Simply Wall St - – Full article
In this article I am going to calculate the intrinsic value of Advantage Oil & Gas Ltd (TSX:AAV) by taking the expected future cash flows and discounting them to today's value. … 5-year cash flow estimate 2017 2018 2019 2020 2021 Levered FCF (CAD, Millions) CA$-46.33 CA$4.12 CA$63.10 CA$60.00 CA$87.00 Source Analyst x3 Analyst x5 Analyst x2 Analyst x2 Analyst x1 Present Value Discounted @ 8.49% CA$-42.71 CA$3.50 CA$49.41 CA$43.30 CA$57.87 Present Value of 5-year Cash Flow (PVCF)= CA$111 We now need to calculate the Terminal Value, which accounts for all the future cash flows after the five years. … Terminal Value (TV) = FCF2021 × (1 + g) ÷ (r – g) = CA$87 × (1 + 2.5%) ÷ (8.5% – 2.5%) = CA$1,480 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = CA$1,480 / ( 1 + 8.5%)5 = CA$984 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is CA$1,096.Simply Wall St - – Full article
This is based on its high beta, which is a good indicator for share price volatility. … Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. … Currently, AAV appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio.Simply Wall St - – Full article
Advantage Oil & Gas Ltd., together with its subsidiaries, acquires, exploits, develops, and produces natural gas in the Province of Alberta, Canada. The company primarily focuses on the development and delineation of its Montney natural gas and liquids resource that includes 200 net sections of land in Glacier, Alberta. It provides natural gas and natural gas liquids primarily through marketing companies. The company was founded in 2001 and is headquartered in Calgary, Canada.
|Name:||Advantage Oil & Gas Ltd.|
Advantage Oil & Gas Ltd.
Alberta, T2P 5E9,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|TSX||AAV||Common Shares||The Toronto Stock Exchange||CA||CAD||01. May 1992|
|NYSE||AAV||Common Shares||New York Stock Exchange||US||USD||01. May 1992|
|DB||9SA||Common Shares||Deutsche Boerse AG||DE||EUR||01. May 1992|
|LSE||0UG9||Common Shares||London Stock Exchange||GB||CAD||01. May 1992|
|Oil and Gas Exploration and Production|
|Company Analysis updated:||2018/03/21 19:21|
|Last estimates confirmation:||2018/03/20|
|Last earnings update:||2017/12/31|
|Last annual earnings update:||2017/12/31|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.