Intrinsic value of Crew Energy Inc. - CR

Previous Close

$1.75

  Intrinsic Value

$1.38

stock screener

  Rating & Target

sell

-21%

Previous close

$1.75

 
Intrinsic value

$1.38

 
Up/down potential

-21%

 
Rating

sell

We calculate the intrinsic value of CR 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 0.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
Revenue, $m
  161
  171
  182
  193
  204
  216
  229
  242
  256
  270
  285
  300
  317
  334
  351
  370
  390
  410
  432
  454
  478
  502
  528
  555
  584
  613
  645
  677
  712
  748
Variable operating expenses, $m
  257
  273
  290
  308
  326
  345
  365
  386
  408
  431
  454
  479
  505
  532
  561
  591
  622
  655
  689
  725
  762
  801
  843
  886
  931
  979
  1,029
  1,081
  1,136
  1,194
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
  257
  273
  290
  308
  326
  345
  365
  386
  408
  431
  454
  479
  505
  532
  561
  591
  622
  655
  689
  725
  762
  801
  843
  886
  931
  979
  1,029
  1,081
  1,136
  1,194
Operating income, $m
  -96
  -102
  -108
  -115
  -122
  -129
  -136
  -144
  -152
  -161
  -170
  -179
  -189
  -199
  -209
  -221
  -232
  -244
  -257
  -271
  -285
  -299
  -315
  -331
  -348
  -366
  -384
  -404
  -424
  -446
EBITDA, $m
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
Interest expense (income), $m
  15
  15
  17
  19
  21
  23
  25
  27
  29
  32
  34
  37
  39
  42
  45
  48
  51
  55
  58
  62
  66
  70
  74
  78
  83
  88
  93
  98
  104
  110
  116
Earnings before tax, $m
  -111
  -119
  -127
  -136
  -145
  -154
  -163
  -173
  -184
  -195
  -206
  -218
  -231
  -244
  -258
  -272
  -287
  -303
  -319
  -336
  -354
  -373
  -393
  -414
  -436
  -458
  -482
  -508
  -534
  -562
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
Net income, $m
  -111
  -119
  -127
  -136
  -145
  -154
  -163
  -173
  -184
  -195
  -206
  -218
  -231
  -244
  -258
  -272
  -287
  -303
  -319
  -336
  -354
  -373
  -393
  -414
  -436
  -458
  -482
  -508
  -534
  -562

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  1,318
  1,402
  1,489
  1,580
  1,674
  1,773
  1,876
  1,983
  2,095
  2,212
  2,334
  2,461
  2,595
  2,735
  2,881
  3,034
  3,194
  3,361
  3,537
  3,721
  3,914
  4,116
  4,328
  4,550
  4,783
  5,027
  5,284
  5,552
  5,834
  6,130
Adjusted assets (=assets-cash), $m
  1,318
  1,402
  1,489
  1,580
  1,674
  1,773
  1,876
  1,983
  2,095
  2,212
  2,334
  2,461
  2,595
  2,735
  2,881
  3,034
  3,194
  3,361
  3,537
  3,721
  3,914
  4,116
  4,328
  4,550
  4,783
  5,027
  5,284
  5,552
  5,834
  6,130
Revenue / Adjusted assets
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
  0.122
Average production assets, $m
  1,283
  1,364
  1,449
  1,537
  1,629
  1,725
  1,825
  1,930
  2,039
  2,152
  2,271
  2,395
  2,525
  2,661
  2,804
  2,952
  3,108
  3,271
  3,442
  3,621
  3,809
  4,006
  4,212
  4,428
  4,655
  4,893
  5,142
  5,404
  5,678
  5,966
Working capital, $m
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
  -80
  -84
  -88
  -93
  -98
  -103
  -108
  -113
  -119
  -125
  -132
  -138
Total debt, $m
  262
  290
  320
  350
  382
  415
  450
  486
  524
  563
  604
  648
  693
  740
  789
  840
  894
  951
  1,010
  1,072
  1,137
  1,205
  1,277
  1,351
  1,430
  1,512
  1,599
  1,689
  1,784
  1,884
Total liabilities, $m
  444
  472
  502
  532
  564
  597
  632
  668
  706
  745
  786
  830
  875
  922
  971
  1,022
  1,076
  1,133
  1,192
  1,254
  1,319
  1,387
  1,459
  1,533
  1,612
  1,694
  1,781
  1,871
  1,966
  2,066
Total equity, $m
  874
  929
  987
  1,047
  1,110
  1,175
  1,243
  1,315
  1,389
  1,466
  1,547
  1,632
  1,720
  1,813
  1,910
  2,011
  2,117
  2,229
  2,345
  2,467
  2,595
  2,729
  2,869
  3,017
  3,171
  3,333
  3,503
  3,681
  3,868
  4,064
Total liabilities and equity, $m
  1,318
  1,401
  1,489
  1,579
  1,674
  1,772
  1,875
  1,983
  2,095
  2,211
  2,333
  2,462
  2,595
  2,735
  2,881
  3,033
  3,193
  3,362
  3,537
  3,721
  3,914
  4,116
  4,328
  4,550
  4,783
  5,027
  5,284
  5,552
  5,834
  6,130
Debt-to-equity ratio
  0.300
  0.310
  0.320
  0.330
  0.340
  0.350
  0.360
  0.370
  0.380
  0.380
  0.390
  0.400
  0.400
  0.410
  0.410
  0.420
  0.420
  0.430
  0.430
  0.430
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.460
Adjusted equity ratio
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -111
  -119
  -127
  -136
  -145
  -154
  -163
  -173
  -184
  -195
  -206
  -218
  -231
  -244
  -258
  -272
  -287
  -303
  -319
  -336
  -354
  -373
  -393
  -414
  -436
  -458
  -482
  -508
  -534
  -562
Depreciation, amort., depletion, $m
  90
  96
  102
  108
  115
  121
  129
  136
  144
  152
  160
  169
  178
  187
  197
  208
  219
  230
  242
  255
  268
  282
  297
  312
  328
  345
  362
  381
  400
  420
Funds from operations, $m
  -21
  -23
  -25
  -27
  -30
  -32
  -35
  -38
  -40
  -43
  -46
  -50
  -53
  -56
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -102
  -108
  -114
  -120
  -127
  -134
  -142
Change in working capital, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
Cash from operations, $m
  -19
  -21
  -23
  -25
  -28
  -30
  -33
  -35
  -38
  -41
  -44
  -47
  -50
  -53
  -57
  -60
  -64
  -68
  -73
  -77
  -82
  -87
  -92
  -97
  -103
  -108
  -115
  -121
  -128
  -135
Maintenance CAPEX, $m
  -85
  -90
  -96
  -102
  -108
  -115
  -121
  -129
  -136
  -144
  -152
  -160
  -169
  -178
  -187
  -197
  -208
  -219
  -230
  -242
  -255
  -268
  -282
  -297
  -312
  -328
  -345
  -362
  -381
  -400
New CAPEX, $m
  -78
  -81
  -85
  -88
  -92
  -96
  -100
  -104
  -109
  -114
  -119
  -124
  -130
  -136
  -142
  -149
  -156
  -163
  -171
  -179
  -188
  -197
  -206
  -216
  -227
  -238
  -249
  -262
  -274
  -288
Cash from investing activities, $m
  -163
  -171
  -181
  -190
  -200
  -211
  -221
  -233
  -245
  -258
  -271
  -284
  -299
  -314
  -329
  -346
  -364
  -382
  -401
  -421
  -443
  -465
  -488
  -513
  -539
  -566
  -594
  -624
  -655
  -688
Free cash flow, $m
  -182
  -193
  -204
  -216
  -228
  -241
  -254
  -268
  -283
  -298
  -314
  -331
  -349
  -367
  -386
  -407
  -428
  -450
  -474
  -499
  -524
  -551
  -580
  -610
  -641
  -674
  -709
  -745
  -783
  -823
Issuance/(repayment) of debt, $m
  27
  28
  29
  31
  32
  33
  35
  36
  38
  39
  41
  43
  45
  47
  49
  52
  54
  57
  59
  62
  65
  68
  71
  75
  79
  82
  86
  91
  95
  100
Issuance/(repurchase) of shares, $m
  163
  174
  185
  196
  207
  219
  232
  245
  258
  272
  287
  303
  319
  336
  354
  373
  393
  414
  435
  458
  482
  507
  534
  561
  590
  620
  652
  686
  721
  758
Cash from financing (excl. dividends), $m  
  190
  202
  214
  227
  239
  252
  267
  281
  296
  311
  328
  346
  364
  383
  403
  425
  447
  471
  494
  520
  547
  575
  605
  636
  669
  702
  738
  777
  816
  858
Total cash flow (excl. dividends), $m
  8
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
Retained Cash Flow (-), $m
  -163
  -174
  -185
  -196
  -207
  -219
  -232
  -245
  -258
  -272
  -287
  -303
  -319
  -336
  -354
  -373
  -393
  -414
  -435
  -458
  -482
  -507
  -534
  -561
  -590
  -620
  -652
  -686
  -721
  -758
Prev. year cash balance distribution, $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 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
  -155
  -165
  -175
  -185
  -196
  -207
  -219
  -232
  -245
  -259
  -273
  -288
  -304
  -320
  -337
  -355
  -374
  -394
  -415
  -437
  -459
  -483
  -509
  -535
  -563
  -592
  -622
  -654
  -688
  -723
Discount rate, %
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
  -147
  -148
  -147
  -146
  -143
  -140
  -136
  -130
  -124
  -117
  -110
  -102
  -93
  -84
  -75
  -67
  -58
  -50
  -42
  -35
  -29
  -23
  -18
  -14
  -11
  -8
  -6
  -4
  -3
  -2
Current shareholders' claim on cash, %
  77.9
  60.6
  47.2
  36.8
  28.7
  22.4
  17.5
  13.6
  10.6
  8.3
  6.5
  5.1
  4.0
  3.1
  2.4
  1.9
  1.5
  1.2
  0.9
  0.7
  0.6
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

Crew Energy Inc is a Canada-based oil and gas exploration, development and production company. It is a growth-oriented oil and natural gas producer. The Company's activities are primarily focused in the Montney Resource situated in northeast British Columbia. Its Montney Resource is complemented by its Lloydminster heavy oil property in Alberta and Saskatchewan. Its Montney area assets include: Septimus/West Septimus, Tower, Groundbirch, Attachie and Portage, which are situated south and west of Fort Staint John, British Columbia. Its operations include liquid rich natural gas and light oil production from the siltstone Montney formation. The Montney property is developed with long-reach horizontal wells. Production from Lloydminster property is comprised of a range of 12 to 14 degrees American Petroleum Institute (API) heavy oil, which is conventionally produced.

FINANCIAL RATIOS  of  Crew Energy Inc. (CR)

Valuation Ratios
P/E Ratio -4
Price to Sales 1.7
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 3.3
Price to Free Cash Flow -7.3
Growth Rates
Sales Growth Rate 1.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -54.8%
Cap. Spend. - 3 Yr. Gr. Rate -16.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 28.6%
Total Debt to Equity 28.6%
Interest Coverage -5
Management Effectiveness
Return On Assets -4.3%
Ret/ On Assets - 3 Yr. Avg. -9.8%
Return On Total Capital -6.1%
Ret/ On T. Cap. - 3 Yr. Avg. -13.4%
Return On Equity -7.8%
Return On Equity - 3 Yr. Avg. -17.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 67.5%
Gross Margin - 3 Yr. Avg. 67.9%
EBITDA Margin 9.3%
EBITDA Margin - 3 Yr. Avg. -12.8%
Operating Margin -44.4%
Oper. Margin - 3 Yr. Avg. -48.5%
Pre-Tax Margin -57%
Pre-Tax Margin - 3 Yr. Avg. -75.6%
Net Profit Margin -43%
Net Profit Margin - 3 Yr. Avg. -57.9%
Effective Tax Rate 24.4%
Eff/ Tax Rate - 3 Yr. Avg. 22.4%
Payout Ratio 0%

CR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CR stock intrinsic value calculation we used $151 million for the last fiscal year's total revenue generated by Crew Energy Inc.. The default revenue input number comes from 2016 income statement of Crew 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 CR stock valuation model: a) initial revenue growth rate of 6.5% 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 5.3%, whose default value for CR is calculated based on our internal credit rating of Crew 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 Crew 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 CR stock the variable cost ratio is equal to 159.6%.

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 CR 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 6.5% for Crew Energy Inc..

Corporate tax rate of 27% is the nominal tax rate for Crew 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 CR 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 CR are equal to 797.7%.

Life of production assets of 14.2 years is the average useful life of capital assets used in Crew 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 CR is equal to -18.5%. 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 - $822 million for Crew 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 148.956 million for Crew 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 Crew Energy Inc. at the current share price and the inputted number of shares is $0.3 billion.

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