Intrinsic value of Altura Energy Inc - ATU

Previous Close

$0.36

  Intrinsic Value

$0.09

stock screener

  Rating & Target

str. sell

-76%

  Value-price divergence*

0%

Previous close

$0.36

 
Intrinsic value

$0.09

 
Up/down potential

-76%

 
Rating

str. sell

 
Value-price divergence*

0%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ATU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  8
  13
  20
  30
  43
  61
  83
  112
  147
  189
  238
  296
  362
  436
  519
  610
  710
  818
  934
  1,058
  1,189
  1,328
  1,474
  1,628
  1,789
  1,957
  2,132
  2,314
  2,504
  2,701
  2,906
Variable operating expenses, $m
 
  26
  40
  59
  86
  121
  166
  223
  293
  378
  477
  592
  724
  873
  1,038
  1,221
  1,420
  1,636
  1,868
  2,115
  2,378
  2,656
  2,949
  3,256
  3,577
  3,913
  4,263
  4,628
  5,007
  5,402
  5,812
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  9
  26
  40
  59
  86
  121
  166
  223
  293
  378
  477
  592
  724
  873
  1,038
  1,221
  1,420
  1,636
  1,868
  2,115
  2,378
  2,656
  2,949
  3,256
  3,577
  3,913
  4,263
  4,628
  5,007
  5,402
  5,812
Operating income, $m
  -1
  -13
  -20
  -30
  -43
  -61
  -83
  -112
  -147
  -189
  -238
  -296
  -362
  -436
  -519
  -610
  -710
  -818
  -934
  -1,058
  -1,189
  -1,328
  -1,474
  -1,628
  -1,789
  -1,957
  -2,132
  -2,314
  -2,504
  -2,701
  -2,906
EBITDA, $m
  3
  -13
  -20
  -30
  -43
  -61
  -83
  -112
  -147
  -189
  -238
  -296
  -362
  -436
  -519
  -610
  -710
  -818
  -934
  -1,058
  -1,189
  -1,328
  -1,474
  -1,628
  -1,789
  -1,957
  -2,132
  -2,314
  -2,504
  -2,701
  -2,906
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  2
  3
  4
  5
  7
  9
  11
  14
  17
  20
  24
  28
  32
  36
  41
  47
  52
  58
  64
  70
  77
  84
  91
  98
  106
Earnings before tax, $m
  -1
  -13
  -20
  -30
  -44
  -62
  -85
  -115
  -151
  -194
  -246
  -305
  -373
  -450
  -536
  -631
  -734
  -846
  -966
  -1,094
  -1,230
  -1,374
  -1,526
  -1,686
  -1,852
  -2,027
  -2,208
  -2,398
  -2,594
  -2,799
  -3,012
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1
  -13
  -20
  -30
  -44
  -62
  -85
  -115
  -151
  -194
  -246
  -305
  -373
  -450
  -536
  -631
  -734
  -846
  -966
  -1,094
  -1,230
  -1,374
  -1,526
  -1,686
  -1,852
  -2,027
  -2,208
  -2,398
  -2,594
  -2,799
  -3,012

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  9
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  46
  59
  92
  137
  199
  280
  385
  517
  679
  874
  1,104
  1,371
  1,676
  2,020
  2,403
  2,826
  3,287
  3,786
  4,323
  4,896
  5,505
  6,148
  6,825
  7,536
  8,281
  9,058
  9,868
  10,713
  11,591
  12,504
  13,453
Adjusted assets (=assets-cash), $m
  37
  59
  92
  137
  199
  280
  385
  517
  679
  874
  1,104
  1,371
  1,676
  2,020
  2,403
  2,826
  3,287
  3,786
  4,323
  4,896
  5,505
  6,148
  6,825
  7,536
  8,281
  9,058
  9,868
  10,713
  11,591
  12,504
  13,453
Revenue / Adjusted assets
  0.216
  0.220
  0.217
  0.219
  0.216
  0.218
  0.216
  0.217
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  2
  -11
  -17
  -26
  -38
  -53
  -73
  -98
  -128
  -165
  -209
  -259
  -317
  -382
  -454
  -534
  -621
  -716
  -817
  -925
  -1,040
  -1,162
  -1,290
  -1,424
  -1,565
  -1,712
  -1,865
  -2,025
  -2,191
  -2,363
  -2,543
Total debt, $m
  0
  5
  13
  24
  39
  59
  85
  117
  156
  203
  259
  324
  398
  482
  575
  678
  790
  911
  1,042
  1,181
  1,329
  1,485
  1,650
  1,822
  2,003
  2,192
  2,389
  2,594
  2,808
  3,029
  3,260
Total liabilities, $m
  9
  14
  22
  33
  48
  68
  94
  126
  165
  212
  268
  333
  407
  491
  584
  687
  799
  920
  1,051
  1,190
  1,338
  1,494
  1,659
  1,831
  2,012
  2,201
  2,398
  2,603
  2,817
  3,038
  3,269
Total equity, $m
  37
  45
  69
  104
  150
  212
  292
  392
  514
  662
  836
  1,038
  1,269
  1,529
  1,819
  2,139
  2,488
  2,866
  3,273
  3,706
  4,167
  4,654
  5,167
  5,705
  6,268
  6,857
  7,470
  8,109
  8,774
  9,466
  10,184
Total liabilities and equity, $m
  46
  59
  91
  137
  198
  280
  386
  518
  679
  874
  1,104
  1,371
  1,676
  2,020
  2,403
  2,826
  3,287
  3,786
  4,324
  4,896
  5,505
  6,148
  6,826
  7,536
  8,280
  9,058
  9,868
  10,712
  11,591
  12,504
  13,453
Debt-to-equity ratio
  0.000
  0.120
  0.190
  0.230
  0.260
  0.280
  0.290
  0.300
  0.300
  0.310
  0.310
  0.310
  0.310
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
Adjusted equity ratio
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757
  0.757

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  -13
  -20
  -30
  -44
  -62
  -85
  -115
  -151
  -194
  -246
  -305
  -373
  -450
  -536
  -631
  -734
  -846
  -966
  -1,094
  -1,230
  -1,374
  -1,526
  -1,686
  -1,852
  -2,027
  -2,208
  -2,398
  -2,594
  -2,799
  -3,012
Depreciation, amort., depletion, $m
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  1
  -13
  -20
  -30
  -44
  -62
  -85
  -115
  -151
  -194
  -246
  -305
  -373
  -450
  -536
  -631
  -734
  -846
  -966
  -1,094
  -1,230
  -1,374
  -1,526
  -1,686
  -1,852
  -2,027
  -2,208
  -2,398
  -2,594
  -2,799
  -3,012
Change in working capital, $m
  -1
  -4
  -6
  -9
  -12
  -15
  -20
  -25
  -31
  -37
  -43
  -50
  -58
  -65
  -72
  -80
  -87
  -94
  -101
  -108
  -115
  -122
  -128
  -134
  -141
  -147
  -153
  -160
  -166
  -173
  -179
Cash from operations, $m
  2
  -9
  -14
  -21
  -32
  -46
  -65
  -90
  -120
  -157
  -202
  -255
  -316
  -385
  -464
  -551
  -647
  -751
  -864
  -986
  -1,115
  -1,253
  -1,398
  -1,551
  -1,712
  -1,880
  -2,055
  -2,238
  -2,428
  -2,627
  -2,833
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  -18
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  -16
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  -14
  -9
  -14
  -21
  -32
  -46
  -65
  -90
  -120
  -157
  -202
  -255
  -316
  -385
  -464
  -551
  -647
  -751
  -864
  -986
  -1,115
  -1,253
  -1,398
  -1,551
  -1,712
  -1,880
  -2,055
  -2,238
  -2,428
  -2,627
  -2,833
Issuance/(repayment) of debt, $m
  0
  5
  8
  11
  15
  20
  26
  32
  39
  47
  56
  65
  74
  84
  93
  103
  112
  121
  130
  139
  148
  156
  165
  173
  181
  189
  197
  205
  213
  222
  231
Issuance/(repurchase) of shares, $m
  0
  30
  44
  64
  91
  124
  165
  215
  273
  342
  420
  507
  604
  711
  826
  950
  1,083
  1,224
  1,372
  1,528
  1,691
  1,861
  2,039
  2,224
  2,416
  2,615
  2,822
  3,037
  3,259
  3,490
  3,730
Cash from financing (excl. dividends), $m  
  0
  35
  52
  75
  106
  144
  191
  247
  312
  389
  476
  572
  678
  795
  919
  1,053
  1,195
  1,345
  1,502
  1,667
  1,839
  2,017
  2,204
  2,397
  2,597
  2,804
  3,019
  3,242
  3,472
  3,712
  3,961
Total cash flow (excl. dividends), $m
  -14
  26
  38
  54
  73
  97
  125
  157
  193
  232
  273
  317
  363
  409
  456
  502
  548
  594
  638
  681
  724
  765
  805
  845
  885
  924
  964
  1,004
  1,044
  1,086
  1,129
Retained Cash Flow (-), $m
  0
  -30
  -44
  -64
  -91
  -124
  -165
  -215
  -273
  -342
  -420
  -507
  -604
  -711
  -826
  -950
  -1,083
  -1,224
  -1,372
  -1,528
  -1,691
  -1,861
  -2,039
  -2,224
  -2,416
  -2,615
  -2,822
  -3,037
  -3,259
  -3,490
  -3,730
Prev. year cash balance distribution, $m
 
  9
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  6
  -6
  -10
  -17
  -27
  -40
  -58
  -81
  -110
  -146
  -190
  -242
  -302
  -370
  -448
  -534
  -630
  -734
  -846
  -967
  -1,097
  -1,234
  -1,378
  -1,531
  -1,691
  -1,858
  -2,033
  -2,215
  -2,405
  -2,602
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  6
  -6
  -9
  -14
  -21
  -29
  -39
  -51
  -63
  -77
  -90
  -103
  -115
  -124
  -132
  -136
  -137
  -135
  -130
  -123
  -113
  -102
  -90
  -78
  -66
  -54
  -44
  -34
  -26
  -20
Current shareholders' claim on cash, %
  100
  49.7
  25.5
  13.5
  7.4
  4.1
  2.4
  1.4
  0.8
  0.5
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Altura Energy Inc., formerly Northern Spirit Resources Inc., is a Canada-based oil and gas exploration, development and production company with focused operations in east central Alberta. The Company's properties include Klein North Area, Klein South Area, Wildmere Area and Provost Minors Area. The Klein North area is located approximately 20 kilometers south of Provost, Alberta. The Company owns working interest in over 640 acres of land in the Klein North area, of which approximately 160 acres are undeveloped and over 480 acres are developed. The Klein South area is located approximately 30 kilometers south of Provost, Alberta. It holds working interest in over 2,720 gross (approximately 1,580 net) acres of land in the Klein South area, of which over 800 gross (approximately 160 net) acres are undeveloped and over 1,920 gross (approximately 1,420 net) acres are developed. It holds working interest in over 2,080 gross (approximately 1,250 net) acres of land in the Wildmere area.

FINANCIAL RATIOS  of  Altura Energy Inc (ATU)

Valuation Ratios
P/E Ratio -38.7
Price to Sales 4.8
Price to Book 1
Price to Tangible Book
Price to Cash Flow 19.3
Price to Free Cash Flow -2.4
Growth Rates
Sales Growth Rate 60%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 500%
Cap. Spend. - 3 Yr. Gr. Rate 43.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.3%
Ret/ On Assets - 3 Yr. Avg. 2.3%
Return On Total Capital -2.7%
Ret/ On T. Cap. - 3 Yr. Avg. 3.6%
Return On Equity -2.7%
Return On Equity - 3 Yr. Avg. 3.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 75%
Gross Margin - 3 Yr. Avg. 79.4%
EBITDA Margin 37.5%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin -12.5%
Oper. Margin - 3 Yr. Avg. -15.3%
Pre-Tax Margin -12.5%
Pre-Tax Margin - 3 Yr. Avg. -14.2%
Net Profit Margin -12.5%
Net Profit Margin - 3 Yr. Avg. -8.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -11.1%
Payout Ratio 0%

ATU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATU stock intrinsic value calculation we used $8 million for the last fiscal year's total revenue generated by Altura Energy Inc. The default revenue input number comes from 2016 income statement of Altura Energy Inc. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATU stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ATU is calculated based on our internal credit rating of Altura Energy Inc, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Altura Energy Inc.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATU stock the variable cost ratio is equal to 200%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ATU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Altura Energy Inc.

Corporate tax rate of 27% is the nominal tax rate for Altura Energy Inc. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATU are equal to 0%.

Life of production assets of 0 years is the average useful life of capital assets used in Altura Energy Inc operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATU is equal to -87.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $37 million for Altura Energy Inc - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 108.909 million for Altura Energy Inc is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Altura Energy Inc at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
KEL Kelt Explorati 6.59 1.19  str.sell
Financial statements of ATU
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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