Intrinsic value of Kelt Exploration Ltd. - KEL

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$7.36

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$7.36

 
Intrinsic value

$1.20

 
Up/down potential

-84%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of KEL 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 1.3

 

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, %
  5.62
  34.20
  31.28
  28.65
  26.29
  24.16
  22.24
  20.52
  18.97
  17.57
  16.31
  15.18
  14.16
  13.25
  12.42
  11.68
  11.01
  10.41
  9.87
  9.38
  8.94
  8.55
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
Revenue, $m
  169
  227
  298
  383
  484
  601
  734
  885
  1,053
  1,238
  1,439
  1,658
  1,893
  2,144
  2,410
  2,691
  2,988
  3,299
  3,624
  3,964
  4,319
  4,688
  5,072
  5,472
  5,887
  6,319
  6,767
  7,233
  7,718
  8,221
  8,746
Variable operating expenses, $m
 
  475
  624
  802
  1,013
  1,258
  1,538
  1,854
  2,205
  2,593
  3,016
  3,474
  3,966
  4,491
  5,049
  5,638
  6,259
  6,911
  7,593
  8,305
  9,048
  9,822
  10,627
  11,464
  12,334
  13,238
  14,177
  15,153
  16,168
  17,224
  18,322
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
  240
  475
  624
  802
  1,013
  1,258
  1,538
  1,854
  2,205
  2,593
  3,016
  3,474
  3,966
  4,491
  5,049
  5,638
  6,259
  6,911
  7,593
  8,305
  9,048
  9,822
  10,627
  11,464
  12,334
  13,238
  14,177
  15,153
  16,168
  17,224
  18,322
Operating income, $m
  -71
  -248
  -326
  -419
  -530
  -658
  -804
  -969
  -1,153
  -1,355
  -1,576
  -1,816
  -2,073
  -2,347
  -2,639
  -2,947
  -3,272
  -3,612
  -3,969
  -4,341
  -4,729
  -5,134
  -5,554
  -5,992
  -6,446
  -6,919
  -7,410
  -7,920
  -8,451
  -9,002
  -9,576
EBITDA, $m
  43
  -114
  -150
  -193
  -244
  -303
  -370
  -446
  -531
  -624
  -726
  -836
  -955
  -1,081
  -1,216
  -1,358
  -1,507
  -1,664
  -1,828
  -2,000
  -2,179
  -2,365
  -2,559
  -2,760
  -2,969
  -3,187
  -3,413
  -3,648
  -3,893
  -4,147
  -4,411
Interest expense (income), $m
  7
  7
  13
  19
  27
  37
  48
  61
  75
  91
  109
  128
  149
  171
  195
  220
  247
  275
  305
  336
  368
  402
  437
  473
  511
  551
  592
  634
  678
  725
  772
Earnings before tax, $m
  -59
  -255
  -339
  -439
  -557
  -695
  -852
  -1,030
  -1,228
  -1,446
  -1,685
  -1,943
  -2,221
  -2,518
  -2,834
  -3,167
  -3,518
  -3,887
  -4,273
  -4,677
  -5,097
  -5,535
  -5,991
  -6,465
  -6,958
  -7,470
  -8,002
  -8,554
  -9,129
  -9,727
  -10,349
Tax expense, $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
Net income, $m
  -50
  -255
  -339
  -439
  -557
  -695
  -852
  -1,030
  -1,228
  -1,446
  -1,685
  -1,943
  -2,221
  -2,518
  -2,834
  -3,167
  -3,518
  -3,887
  -4,273
  -4,677
  -5,097
  -5,535
  -5,991
  -6,465
  -6,958
  -7,470
  -8,002
  -8,554
  -9,129
  -9,727
  -10,349

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  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
Total assets, $m
  1,256
  1,680
  2,205
  2,837
  3,583
  4,449
  5,438
  6,554
  7,797
  9,167
  10,663
  12,282
  14,021
  15,878
  17,851
  19,936
  22,131
  24,435
  26,847
  29,366
  31,993
  34,728
  37,574
  40,533
  43,609
  46,805
  50,126
  53,578
  57,167
  60,899
  64,782
Adjusted assets (=assets-cash), $m
  1,255
  1,680
  2,205
  2,837
  3,583
  4,449
  5,438
  6,554
  7,797
  9,167
  10,663
  12,282
  14,021
  15,878
  17,851
  19,936
  22,131
  24,435
  26,847
  29,366
  31,993
  34,728
  37,574
  40,533
  43,609
  46,805
  50,126
  53,578
  57,167
  60,899
  64,782
Revenue / Adjusted assets
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
Average production assets, $m
  499
  670
  879
  1,131
  1,428
  1,774
  2,168
  2,613
  3,108
  3,655
  4,251
  4,896
  5,590
  6,330
  7,116
  7,948
  8,823
  9,741
  10,703
  11,707
  12,754
  13,845
  14,979
  16,159
  17,385
  18,659
  19,983
  21,359
  22,790
  24,278
  25,826
Working capital, $m
  -27
  -38
  -49
  -64
  -80
  -100
  -122
  -147
  -175
  -205
  -239
  -275
  -314
  -356
  -400
  -447
  -496
  -548
  -602
  -658
  -717
  -778
  -842
  -908
  -977
  -1,049
  -1,123
  -1,201
  -1,281
  -1,365
  -1,452
Total debt, $m
  183
  323
  496
  704
  949
  1,234
  1,559
  1,926
  2,335
  2,786
  3,278
  3,811
  4,383
  4,994
  5,643
  6,329
  7,051
  7,809
  8,603
  9,431
  10,296
  11,196
  12,132
  13,105
  14,117
  15,169
  16,262
  17,397
  18,578
  19,806
  21,083
Total liabilities, $m
  413
  553
  726
  934
  1,179
  1,464
  1,789
  2,156
  2,565
  3,016
  3,508
  4,041
  4,613
  5,224
  5,873
  6,559
  7,281
  8,039
  8,833
  9,661
  10,526
  11,426
  12,362
  13,335
  14,347
  15,399
  16,492
  17,627
  18,808
  20,036
  21,313
Total equity, $m
  843
  1,127
  1,480
  1,904
  2,404
  2,985
  3,649
  4,398
  5,232
  6,151
  7,155
  8,241
  9,408
  10,654
  11,978
  13,377
  14,850
  16,396
  18,014
  19,705
  21,467
  23,303
  25,212
  27,198
  29,262
  31,406
  33,635
  35,951
  38,359
  40,863
  43,468
Total liabilities and equity, $m
  1,256
  1,680
  2,206
  2,838
  3,583
  4,449
  5,438
  6,554
  7,797
  9,167
  10,663
  12,282
  14,021
  15,878
  17,851
  19,936
  22,131
  24,435
  26,847
  29,366
  31,993
  34,729
  37,574
  40,533
  43,609
  46,805
  50,127
  53,578
  57,167
  60,899
  64,781
Debt-to-equity ratio
  0.217
  0.290
  0.330
  0.370
  0.390
  0.410
  0.430
  0.440
  0.450
  0.450
  0.460
  0.460
  0.470
  0.470
  0.470
  0.470
  0.470
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.490
Adjusted equity ratio
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671
  0.671

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -50
  -255
  -339
  -439
  -557
  -695
  -852
  -1,030
  -1,228
  -1,446
  -1,685
  -1,943
  -2,221
  -2,518
  -2,834
  -3,167
  -3,518
  -3,887
  -4,273
  -4,677
  -5,097
  -5,535
  -5,991
  -6,465
  -6,958
  -7,470
  -8,002
  -8,554
  -9,129
  -9,727
  -10,349
Depreciation, amort., depletion, $m
  114
  134
  176
  226
  286
  355
  434
  523
  622
  731
  850
  979
  1,118
  1,266
  1,423
  1,590
  1,765
  1,948
  2,141
  2,341
  2,551
  2,769
  2,996
  3,232
  3,477
  3,732
  3,997
  4,272
  4,558
  4,856
  5,165
Funds from operations, $m
  32
  -122
  -163
  -213
  -271
  -340
  -418
  -507
  -606
  -715
  -835
  -964
  -1,103
  -1,252
  -1,410
  -1,578
  -1,754
  -1,939
  -2,133
  -2,335
  -2,546
  -2,766
  -2,995
  -3,233
  -3,481
  -3,738
  -4,005
  -4,283
  -4,571
  -4,871
  -5,184
Change in working capital, $m
  -13
  -10
  -12
  -14
  -17
  -19
  -22
  -25
  -28
  -31
  -34
  -36
  -39
  -42
  -44
  -47
  -49
  -52
  -54
  -56
  -59
  -61
  -64
  -66
  -69
  -72
  -74
  -77
  -80
  -84
  -87
Cash from operations, $m
  45
  387
  -151
  -198
  -255
  -321
  -396
  -482
  -578
  -685
  -801
  -928
  -1,064
  -1,211
  -1,366
  -1,531
  -1,705
  -1,887
  -2,079
  -2,279
  -2,487
  -2,705
  -2,931
  -3,167
  -3,412
  -3,666
  -3,930
  -4,205
  -4,491
  -4,788
  -5,097
Maintenance CAPEX, $m
  0
  -100
  -134
  -176
  -226
  -286
  -355
  -434
  -523
  -622
  -731
  -850
  -979
  -1,118
  -1,266
  -1,423
  -1,590
  -1,765
  -1,948
  -2,141
  -2,341
  -2,551
  -2,769
  -2,996
  -3,232
  -3,477
  -3,732
  -3,997
  -4,272
  -4,558
  -4,856
New CAPEX, $m
  -104
  -171
  -209
  -252
  -297
  -345
  -394
  -445
  -496
  -546
  -596
  -645
  -693
  -740
  -786
  -831
  -875
  -919
  -961
  -1,004
  -1,047
  -1,090
  -1,135
  -1,180
  -1,226
  -1,274
  -1,324
  -1,376
  -1,431
  -1,488
  -1,548
Cash from investing activities, $m
  -97
  -271
  -343
  -428
  -523
  -631
  -749
  -879
  -1,019
  -1,168
  -1,327
  -1,495
  -1,672
  -1,858
  -2,052
  -2,254
  -2,465
  -2,684
  -2,909
  -3,145
  -3,388
  -3,641
  -3,904
  -4,176
  -4,458
  -4,751
  -5,056
  -5,373
  -5,703
  -6,046
  -6,404
Free cash flow, $m
  -52
  117
  -494
  -626
  -778
  -951
  -1,145
  -1,361
  -1,596
  -1,852
  -2,128
  -2,423
  -2,737
  -3,069
  -3,418
  -3,785
  -4,169
  -4,570
  -4,988
  -5,423
  -5,876
  -6,346
  -6,835
  -7,342
  -7,870
  -8,417
  -8,986
  -9,578
  -10,193
  -10,834
  -11,500
Issuance/(repayment) of debt, $m
  21
  140
  173
  208
  245
  285
  326
  367
  409
  451
  492
  533
  572
  611
  649
  686
  722
  758
  793
  829
  864
  900
  936
  974
  1,012
  1,052
  1,093
  1,136
  1,181
  1,228
  1,277
Issuance/(repurchase) of shares, $m
  0
  28
  674
  842
  1,033
  1,247
  1,484
  1,742
  2,022
  2,321
  2,640
  2,977
  3,332
  3,704
  4,093
  4,498
  4,920
  5,358
  5,813
  6,285
  6,774
  7,282
  7,808
  8,354
  8,921
  9,510
  10,122
  10,759
  11,421
  12,110
  12,828
Cash from financing (excl. dividends), $m  
  52
  168
  847
  1,050
  1,278
  1,532
  1,810
  2,109
  2,431
  2,772
  3,132
  3,510
  3,904
  4,315
  4,742
  5,184
  5,642
  6,116
  6,606
  7,114
  7,638
  8,182
  8,744
  9,328
  9,933
  10,562
  11,215
  11,895
  12,602
  13,338
  14,105
Total cash flow (excl. dividends), $m
  0
  256
  -322
  -418
  -533
  -667
  -820
  -993
  -1,187
  -1,402
  -1,636
  -1,891
  -2,165
  -2,458
  -2,770
  -3,099
  -3,447
  -3,812
  -4,195
  -4,595
  -5,012
  -5,446
  -5,899
  -6,369
  -6,858
  -7,366
  -7,894
  -8,442
  -9,013
  -9,606
  -10,223
Retained Cash Flow (-), $m
  4
  -285
  -353
  -424
  -500
  -581
  -664
  -749
  -834
  -919
  -1,003
  -1,086
  -1,167
  -1,246
  -1,324
  -1,399
  -1,473
  -1,546
  -1,618
  -1,690
  -1,762
  -1,835
  -1,910
  -1,986
  -2,064
  -2,145
  -2,229
  -2,316
  -2,408
  -2,504
  -2,605
Prev. year cash balance distribution, $m
 
  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
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
 
  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
Discount rate, %
 
  5.20
  5.46
  5.73
  6.02
  6.32
  6.64
  6.97
  7.32
  7.68
  8.07
  8.47
  8.89
  9.34
  9.81
  10.30
  10.81
  11.35
  11.92
  12.51
  13.14
  13.80
  14.49
  15.21
  15.97
  16.77
  17.61
  18.49
  19.41
  20.38
  21.40
PV of cash for 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
Current shareholders' claim on cash, %
  100
  97.9
  70.4
  51.3
  37.9
  28.3
  21.4
  16.3
  12.5
  9.7
  7.6
  6.0
  4.7
  3.8
  3.0
  2.4
  1.9
  1.6
  1.3
  1.0
  0.8
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1

Kelt Exploration Ltd., an oil and gas company, engages in the exploration, development, and production of crude oil and natural gas resources primarily in west central Alberta and northeastern British Columbia, Canada. As of December 31, 2015, the company owned interests in approximately 730,308 net acres of developed and undeveloped land. It also had proved developed producing reserves of 33.8 million barrels of oil equivalent (BOE); total proved reserves of 83.5 million BOE; and total proved plus probable reserves of 150.5 million BOE. The company is headquartered in Calgary, Canada.

FINANCIAL RATIOS  of  Kelt Exploration Ltd. (KEL)

Valuation Ratios
P/E Ratio -25.9
Price to Sales 7.7
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 28.7
Price to Free Cash Flow -21.9
Growth Rates
Sales Growth Rate 5.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -43.2%
Cap. Spend. - 3 Yr. Gr. Rate -19.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 21.7%
Total Debt to Equity 21.7%
Interest Coverage -7
Management Effectiveness
Return On Assets -3.5%
Ret/ On Assets - 3 Yr. Avg. -4.8%
Return On Total Capital -4.9%
Ret/ On T. Cap. - 3 Yr. Avg. -6.5%
Return On Equity -5.9%
Return On Equity - 3 Yr. Avg. -7.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 45%
Gross Margin - 3 Yr. Avg. 50.9%
EBITDA Margin 36.7%
EBITDA Margin - 3 Yr. Avg. 39.9%
Operating Margin -42%
Oper. Margin - 3 Yr. Avg. -47.1%
Pre-Tax Margin -34.9%
Pre-Tax Margin - 3 Yr. Avg. -43.2%
Net Profit Margin -29.6%
Net Profit Margin - 3 Yr. Avg. -37.3%
Effective Tax Rate 15.3%
Eff/ Tax Rate - 3 Yr. Avg. 30.6%
Payout Ratio 0%

KEL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KEL stock intrinsic value calculation we used $169 million for the last fiscal year's total revenue generated by Kelt Exploration Ltd.. The default revenue input number comes from 2016 income statement of Kelt Exploration Ltd.. 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 KEL stock valuation model: a) initial revenue growth rate of 34.2% 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 5.2%, whose default value for KEL is calculated based on our internal credit rating of Kelt Exploration Ltd., 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 Kelt Exploration Ltd..
    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 KEL stock the variable cost ratio is equal to 209.5%.

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 KEL 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 3.9% for Kelt Exploration Ltd..

Corporate tax rate of 27% is the nominal tax rate for Kelt Exploration Ltd.. 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 KEL 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 KEL are equal to 295.3%.

Life of production assets of 4.4 years is the average useful life of capital assets used in Kelt Exploration Ltd. 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 KEL is equal to -16.6%. 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 - $843 million for Kelt Exploration Ltd. - 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 175.412 million for Kelt Exploration Ltd. 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 Kelt Exploration Ltd. at the current share price and the inputted number of shares is $1.3 billion.


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Stock chart of KEL Financial statements of KEL
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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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