Kelt Exploration (TSX:KEL) - Share price, News & Analysis

Q: What is the Fair Price of KEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

KEL (CA$6.32) is trading below our estimate of [[fair value]] (CA$32.84)

KEL fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	2/6
Financial Health	4/6
Dividends	0/6

KEL Stock Overview

Rewards

Trading at 80.8% below our estimate of its fair value

Revenue is forecast to grow 24.41% per year

Earnings have grown 2.5% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Kelt Exploration Competitors

Frontera Energy

TSX:FEC

CA$1.0b

Cardinal Energy

TSX:CJ

CA$1.3b

Athabasca Oil

TSX:ATH

CA$1.5b

Kiwetinohk Energy

TSX:KEC

CA$688.2m

Price History & Performance

Summary of all time highs, changes and price drops for Kelt Exploration
Historical stock prices
Current Share Price	CA$6.32
52 Week High	CA$8.32
52 Week Low	CA$2.83
Beta	2.64
1 Month Change	8.22%
3 Month Change	-2.77%
1 Year Change	119.44%
3 Year Change	133.21%
5 Year Change	8.41%
Change since IPO	17.04%

Shareholder Returns

	KEL	CA Oil and Gas	CA Market
7D	-4.8%	0.9%	1.3%
1Y	119.4%	57.3%	3.3%

Return vs Industry: KEL exceeded the Canadian Oil and Gas industry which returned 51.6% over the past year.

Return vs Market: KEL exceeded the Canadian Market which returned 2.1% over the past year.

Price Volatility

Is KEL's price volatile compared to industry and market?
KEL volatility
KEL Average Weekly Movement	8.0%
Oil and Gas Industry Average Movement	11.1%
Market Average Movement	10.5%
10% most volatile stocks in CA Market	18.9%
10% least volatile stocks in CA Market	4.2%

Stable Share Price: KEL is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: KEL's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2012	72	David Wilson	https://www.keltexploration.com

Kelt Exploration Ltd., an oil and gas company, engages in the exploration, development, and production of crude oil and natural gas resources primarily in northwestern Alberta and northeastern British Columbia, Canada. The company markets its crude oil, natural gas, and natural gas liquids production primarily to third party marketing companies. As of December 31, 2021, it had proved developed producing reserves of 43.9 million barrels of oil equivalent (BOE); total proved reserves of 134.1 million BOE; and total proved plus probable reserves of 254.1 million BOE.

Kelt Exploration Fundamentals Summary

How do Kelt Exploration's earnings and revenue compare to its market cap?
KEL fundamental statistics
Market Cap	CA$1.21b
Earnings (TTM)	CA$138.18m
Revenue (TTM)	CA$462.82m

8.8x

P/E Ratio

2.6x

P/S Ratio

Is KEL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KEL income statement (TTM)
Revenue	CA$462.82m
Cost of Revenue	CA$127.61m
Gross Profit	CA$335.21m
Other Expenses	CA$197.04m
Earnings	CA$138.18m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 10, 2022

Earnings per share (EPS)	0.72
Gross Margin	72.43%
Net Profit Margin	29.85%
Debt/Equity Ratio	0%

How did KEL perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is KEL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for KEL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KEL. This is calculated by dividing KEL's market cap by their current preferred multiple.
What is KEL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$1.21b

KEL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.6x
Enterprise Value/EBITDA	5.6x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does KEL's PE Ratio compare to its peers?

KEL PE Ratio vs Peers

The above table shows the PE ratio for KEL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17x
FEC Frontera Energy	1x	n/a	CA$1.0b
CJ Cardinal Energy	2.9x	n/a	CA$1.3b
ATH Athabasca Oil	3.6x	n/a	CA$1.5b
KEC Kiwetinohk Energy	60.7x	n/a	CA$688.2m
KEL Kelt Exploration	8.8x	n/a	CA$1.2b

Price-To-Earnings vs Peers: KEL is good value based on its Price-To-Earnings Ratio (8.8x) compared to the peer average (17x).

Price to Earnings Ratio vs Industry

How does KEL's PE Ratio compare vs other companies in the CA Oil and Gas Industry?

Price-To-Earnings vs Industry: KEL is expensive based on its Price-To-Earnings Ratio (8.8x) compared to the Canadian Oil and Gas industry average (6x)

Price to Earnings Ratio vs Fair Ratio

What is KEL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

KEL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.8x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate KEL's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of KEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: KEL (CA$6.32) is trading below our estimate of fair value (CA$32.84)

Significantly Below Fair Value: KEL is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Kelt Exploration forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.4%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if KEL's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if KEL's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if KEL's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KEL's revenue (24.4% per year) is forecast to grow faster than the Canadian market (6.6% per year).

High Growth Revenue: KEL's revenue (24.4% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if KEL's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Kelt Exploration performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

2.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: KEL has a high level of non-cash earnings.

Growing Profit Margin: KEL's current net profit margins (29.9%) are lower than last year (30.3%).

Past Earnings Growth Analysis

Earnings Trend: KEL has become profitable over the past 5 years, growing earnings by 2.5% per year.

Accelerating Growth: KEL's earnings growth over the past year (132.4%) exceeds its 5-year average (2.5% per year).

Earnings vs Industry: KEL earnings growth over the past year (132.4%) underperformed the Oil and Gas industry 158.3%.

Return on Equity

High ROE: KEL's Return on Equity (16.9%) is considered low.

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Financial Health

How is Kelt Exploration's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: KEL's short term assets (CA$98.7M) do not cover its short term liabilities (CA$116.2M).

Long Term Liabilities: KEL's short term assets (CA$98.7M) do not cover its long term liabilities (CA$100.4M).

Debt to Equity History and Analysis

Debt Level: KEL is debt free.

Reducing Debt: KEL has no debt compared to 5 years ago when its debt to equity ratio was 16.4%.

Debt Coverage: KEL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: KEL has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Kelt Exploration current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate KEL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate KEL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if KEL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if KEL's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as KEL has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

9.8yrs

Average management tenure

CEO

David Wilson (62 yo)

9.83yrs

Tenure

CA$717,390

Compensation

Mr. David John Wilson has been the Chief Executive Officer and President of Kelt Exploration Ltd. since October 11, 2012. Mr. Wilson was President and the Chief Executive Officer of Celtic Exploration Ltd....

Leadership Team

Experienced Management: KEL's management team is seasoned and experienced (9.8 years average tenure).

Board Members

Experienced Board: KEL's board of directors are considered experienced (7.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: KEL insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/18 00:00
End of Day Share Price	2022/08/18 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31