Intrinsic value of Northern Oil&Gas - NOG

Previous Close

$1.14

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$1.14

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of NOG 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 0.1

 

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, %
  -47.27
  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
  145
  232
  358
  536
  778
  1,097
  1,509
  2,025
  2,659
  3,421
  4,321
  5,366
  6,561
  7,908
  9,409
  11,063
  12,869
  14,824
  16,925
  19,168
  21,551
  24,070
  26,722
  29,505
  32,419
  35,462
  38,635
  41,940
  45,378
  48,953
  52,669
Variable operating expenses, $m
 
  1,176
  1,817
  2,717
  3,943
  5,562
  7,647
  10,264
  13,478
  17,343
  21,905
  27,201
  33,256
  40,085
  47,693
  56,079
  65,233
  75,143
  85,793
  97,165
  109,242
  122,009
  135,452
  149,561
  164,330
  179,756
  195,841
  212,593
  230,022
  248,144
  266,979
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
  374
  1,176
  1,817
  2,717
  3,943
  5,562
  7,647
  10,264
  13,478
  17,343
  21,905
  27,201
  33,256
  40,085
  47,693
  56,079
  65,233
  75,143
  85,793
  97,165
  109,242
  122,009
  135,452
  149,561
  164,330
  179,756
  195,841
  212,593
  230,022
  248,144
  266,979
Operating income, $m
  -229
  -944
  -1,458
  -2,181
  -3,165
  -4,465
  -6,138
  -8,240
  -10,819
  -13,921
  -17,584
  -21,835
  -26,696
  -32,177
  -38,285
  -45,016
  -52,364
  -60,319
  -68,868
  -77,997
  -87,691
  -97,940
  -108,731
  -120,056
  -131,911
  -144,294
  -157,206
  -170,653
  -184,643
  -199,190
  -214,310
EBITDA, $m
  -168
  -846
  -1,307
  -1,955
  -2,837
  -4,002
  -5,502
  -7,386
  -9,698
  -12,479
  -15,762
  -19,573
  -23,929
  -28,843
  -34,317
  -40,351
  -46,938
  -54,069
  -61,732
  -69,914
  -78,604
  -87,791
  -97,464
  -107,616
  -118,242
  -129,342
  -140,916
  -152,969
  -165,510
  -178,550
  -192,102
Interest expense (income), $m
  60
  60
  38
  62
  96
  142
  203
  281
  380
  501
  646
  817
  1,017
  1,244
  1,501
  1,787
  2,102
  2,447
  2,819
  3,220
  3,647
  4,101
  4,581
  5,087
  5,617
  6,172
  6,752
  7,357
  7,987
  8,642
  9,324
Earnings before tax, $m
  -295
  -1,004
  -1,497
  -2,243
  -3,261
  -4,607
  -6,341
  -8,521
  -11,199
  -14,422
  -18,230
  -22,653
  -27,712
  -33,421
  -39,786
  -46,803
  -54,467
  -62,766
  -71,687
  -81,216
  -91,338
  -102,041
  -113,312
  -125,143
  -137,528
  -150,466
  -163,959
  -178,010
  -192,630
  -207,833
  -223,634
Tax expense, $m
  -2
  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
  -293
  -1,004
  -1,497
  -2,243
  -3,261
  -4,607
  -6,341
  -8,521
  -11,199
  -14,422
  -18,230
  -22,653
  -27,712
  -33,421
  -39,786
  -46,803
  -54,467
  -62,766
  -71,687
  -81,216
  -91,338
  -102,041
  -113,312
  -125,143
  -137,528
  -150,466
  -163,959
  -178,010
  -192,630
  -207,833
  -223,634

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6
  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
  432
  682
  1,054
  1,577
  2,288
  3,227
  4,437
  5,956
  7,820
  10,063
  12,710
  15,783
  19,296
  23,259
  27,673
  32,539
  37,850
  43,600
  49,780
  56,378
  63,386
  70,793
  78,593
  86,780
  95,349
  104,299
  113,633
  123,352
  133,465
  143,980
  154,909
Adjusted assets (=assets-cash), $m
  426
  682
  1,054
  1,577
  2,288
  3,227
  4,437
  5,956
  7,820
  10,063
  12,710
  15,783
  19,296
  23,259
  27,673
  32,539
  37,850
  43,600
  49,780
  56,378
  63,386
  70,793
  78,593
  86,780
  95,349
  104,299
  113,633
  123,352
  133,465
  143,980
  154,909
Revenue / Adjusted assets
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
Average production assets, $m
  483
  773
  1,194
  1,786
  2,591
  3,655
  5,025
  6,745
  8,857
  11,397
  14,395
  17,875
  21,854
  26,341
  31,341
  36,851
  42,867
  49,379
  56,377
  63,850
  71,787
  80,176
  89,010
  98,281
  107,986
  118,123
  128,693
  139,701
  151,154
  163,063
  175,440
Working capital, $m
  -30
  -58
  -89
  -133
  -193
  -272
  -374
  -502
  -659
  -848
  -1,072
  -1,331
  -1,627
  -1,961
  -2,333
  -2,744
  -3,192
  -3,676
  -4,197
  -4,754
  -5,345
  -5,969
  -6,627
  -7,317
  -8,040
  -8,795
  -9,581
  -10,401
  -11,254
  -12,140
  -13,062
Total debt, $m
  833
  528
  863
  1,333
  1,973
  2,819
  3,907
  5,274
  6,952
  8,971
  11,353
  14,119
  17,281
  20,847
  24,820
  29,199
  33,979
  39,154
  44,716
  50,654
  56,961
  63,628
  70,648
  78,016
  85,728
  93,783
  102,183
  110,931
  120,032
  129,496
  139,332
Total liabilities, $m
  919
  614
  949
  1,419
  2,059
  2,905
  3,993
  5,360
  7,038
  9,057
  11,439
  14,205
  17,367
  20,933
  24,906
  29,285
  34,065
  39,240
  44,802
  50,740
  57,047
  63,714
  70,734
  78,102
  85,814
  93,869
  102,269
  111,017
  120,118
  129,582
  139,418
Total equity, $m
  -487
  68
  105
  158
  229
  323
  444
  596
  782
  1,006
  1,271
  1,578
  1,930
  2,326
  2,767
  3,254
  3,785
  4,360
  4,978
  5,638
  6,339
  7,079
  7,859
  8,678
  9,535
  10,430
  11,363
  12,335
  13,346
  14,398
  15,491
Total liabilities and equity, $m
  432
  682
  1,054
  1,577
  2,288
  3,228
  4,437
  5,956
  7,820
  10,063
  12,710
  15,783
  19,297
  23,259
  27,673
  32,539
  37,850
  43,600
  49,780
  56,378
  63,386
  70,793
  78,593
  86,780
  95,349
  104,299
  113,632
  123,352
  133,464
  143,980
  154,909
Debt-to-equity ratio
  -1.710
  7.740
  8.180
  8.450
  8.620
  8.730
  8.810
  8.860
  8.890
  8.910
  8.930
  8.950
  8.960
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
Adjusted equity ratio
  -1.157
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -293
  -1,004
  -1,497
  -2,243
  -3,261
  -4,607
  -6,341
  -8,521
  -11,199
  -14,422
  -18,230
  -22,653
  -27,712
  -33,421
  -39,786
  -46,803
  -54,467
  -62,766
  -71,687
  -81,216
  -91,338
  -102,041
  -113,312
  -125,143
  -137,528
  -150,466
  -163,959
  -178,010
  -192,630
  -207,833
  -223,634
Depreciation, amort., depletion, $m
  61
  98
  151
  226
  328
  463
  636
  854
  1,121
  1,443
  1,822
  2,263
  2,766
  3,334
  3,967
  4,665
  5,426
  6,251
  7,136
  8,082
  9,087
  10,149
  11,267
  12,441
  13,669
  14,952
  16,290
  17,684
  19,133
  20,641
  22,208
Funds from operations, $m
  114
  -906
  -1,345
  -2,017
  -2,933
  -4,144
  -5,705
  -7,667
  -10,078
  -12,979
  -16,408
  -20,390
  -24,946
  -30,087
  -35,818
  -42,138
  -49,040
  -56,515
  -64,551
  -73,134
  -82,252
  -91,892
  -102,045
  -112,702
  -123,859
  -135,514
  -147,668
  -160,326
  -173,497
  -187,192
  -201,426
Change in working capital, $m
  12
  -22
  -31
  -44
  -60
  -79
  -102
  -128
  -157
  -189
  -223
  -259
  -296
  -334
  -372
  -410
  -448
  -485
  -521
  -556
  -591
  -625
  -658
  -690
  -723
  -755
  -787
  -820
  -853
  -887
  -922
Cash from operations, $m
  102
  -885
  -1,314
  -1,973
  -2,873
  -4,065
  -5,603
  -7,539
  -9,920
  -12,790
  -16,184
  -20,131
  -24,650
  -29,753
  -35,446
  -41,728
  -48,593
  -56,030
  -64,030
  -72,577
  -81,661
  -91,267
  -101,387
  -112,012
  -123,137
  -134,759
  -146,881
  -159,507
  -172,644
  -186,305
  -200,505
Maintenance CAPEX, $m
  0
  -61
  -98
  -151
  -226
  -328
  -463
  -636
  -854
  -1,121
  -1,443
  -1,822
  -2,263
  -2,766
  -3,334
  -3,967
  -4,665
  -5,426
  -6,251
  -7,136
  -8,082
  -9,087
  -10,149
  -11,267
  -12,441
  -13,669
  -14,952
  -16,290
  -17,684
  -19,133
  -20,641
New CAPEX, $m
  -93
  -290
  -421
  -592
  -805
  -1,064
  -1,370
  -1,720
  -2,112
  -2,540
  -2,998
  -3,480
  -3,979
  -4,487
  -5,000
  -5,510
  -6,016
  -6,512
  -6,998
  -7,473
  -7,936
  -8,390
  -8,834
  -9,271
  -9,705
  -10,137
  -10,570
  -11,008
  -11,453
  -11,909
  -12,377
Cash from investing activities, $m
  -91
  -351
  -519
  -743
  -1,031
  -1,392
  -1,833
  -2,356
  -2,966
  -3,661
  -4,441
  -5,302
  -6,242
  -7,253
  -8,334
  -9,477
  -10,681
  -11,938
  -13,249
  -14,609
  -16,018
  -17,477
  -18,983
  -20,538
  -22,146
  -23,806
  -25,522
  -27,298
  -29,137
  -31,042
  -33,018
Free cash flow, $m
  11
  -1,236
  -1,833
  -2,716
  -3,904
  -5,458
  -7,436
  -9,895
  -12,886
  -16,451
  -20,625
  -25,433
  -30,891
  -37,007
  -43,780
  -51,206
  -59,273
  -67,969
  -77,278
  -87,187
  -97,679
  -108,744
  -120,370
  -132,550
  -145,282
  -158,565
  -172,404
  -186,805
  -201,781
  -217,347
  -233,523
Issuance/(repayment) of debt, $m
  -6
  -305
  335
  470
  640
  846
  1,089
  1,367
  1,678
  2,018
  2,383
  2,766
  3,162
  3,566
  3,973
  4,379
  4,780
  5,175
  5,561
  5,939
  6,307
  6,667
  7,020
  7,368
  7,712
  8,055
  8,400
  8,748
  9,101
  9,463
  9,836
Issuance/(repurchase) of shares, $m
  -1
  1,565
  1,534
  2,296
  3,332
  4,701
  6,462
  8,673
  11,385
  14,646
  18,495
  22,960
  28,064
  33,818
  40,227
  47,289
  54,998
  63,341
  72,305
  81,876
  92,039
  102,782
  114,092
  125,962
  138,385
  151,362
  164,892
  178,982
  193,642
  208,884
  224,727
Cash from financing (excl. dividends), $m  
  -8
  1,260
  1,869
  2,766
  3,972
  5,547
  7,551
  10,040
  13,063
  16,664
  20,878
  25,726
  31,226
  37,384
  44,200
  51,668
  59,778
  68,516
  77,866
  87,815
  98,346
  109,449
  121,112
  133,330
  146,097
  159,417
  173,292
  187,730
  202,743
  218,347
  234,563
Total cash flow (excl. dividends), $m
  3
  25
  35
  50
  68
  89
  115
  144
  177
  213
  252
  292
  334
  377
  420
  463
  505
  547
  588
  628
  667
  705
  742
  779
  815
  852
  888
  925
  962
  1,000
  1,040
Retained Cash Flow (-), $m
  289
  -1,565
  -1,534
  -2,296
  -3,332
  -4,701
  -6,462
  -8,673
  -11,385
  -14,646
  -18,495
  -22,960
  -28,064
  -33,818
  -40,227
  -47,289
  -54,998
  -63,341
  -72,305
  -81,876
  -92,039
  -102,782
  -114,092
  -125,962
  -138,385
  -151,362
  -164,892
  -178,982
  -193,642
  -208,884
  -224,727
Prev. year cash balance distribution, $m
 
  6
  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
 
  -1,534
  -1,498
  -2,246
  -3,264
  -4,612
  -6,347
  -8,528
  -11,208
  -14,433
  -18,243
  -22,668
  -27,729
  -33,441
  -39,807
  -46,827
  -54,492
  -62,794
  -71,717
  -81,248
  -91,372
  -102,077
  -113,350
  -125,183
  -137,570
  -150,510
  -164,004
  -178,057
  -192,680
  -207,884
  -223,687
Discount rate, %
 
  14.50
  15.23
  15.99
  16.79
  17.62
  18.51
  19.43
  20.40
  21.42
  22.49
  23.62
  24.80
  26.04
  27.34
  28.71
  30.14
  31.65
  33.23
  34.90
  36.64
  38.47
  40.40
  42.42
  44.54
  46.76
  49.10
  51.56
  54.14
  56.84
  59.68
PV of cash for distribution, $m
 
  -1,340
  -1,129
  -1,439
  -1,755
  -2,048
  -2,292
  -2,461
  -2,538
  -2,516
  -2,398
  -2,200
  -1,943
  -1,651
  -1,350
  -1,063
  -804
  -586
  -410
  -275
  -178
  -110
  -65
  -37
  -20
  -10
  -5
  -2
  -1
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  2.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Northern Oil and Gas, Inc. is an independent energy company. The Company is engaged in the acquisition, exploration, development and production of oil and natural gas properties, primarily in the Bakken and Three Forks formations within the Williston Basin in North Dakota and Montana. The Company holds working interests in over 2,630 gross (204.3 net) producing wells, including over 2,630 wells targeting the Bakken and Three Forks formations and over two wells targeting other formations. The Company leases approximately 165,910 net acres, all located in the Williston Basin. The Company engages in oil exploration and production through non-operated working interests in wells drilled and completed in spacing units that include its acreage. The Company's proved reserves are approximately 65.3 million barrels of oil equivalent (MMBoe).

FINANCIAL RATIOS  of  Northern Oil&Gas (NOG)

Valuation Ratios
P/E Ratio -0.2
Price to Sales 0.5
Price to Book -0.1
Price to Tangible Book
Price to Cash Flow 0.7
Price to Free Cash Flow 8
Growth Rates
Sales Growth Rate -47.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -67.8%
Cap. Spend. - 3 Yr. Gr. Rate -23.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity -171%
Total Debt to Equity -171%
Interest Coverage -4
Management Effectiveness
Return On Assets -40.5%
Ret/ On Assets - 3 Yr. Avg. -32.4%
Return On Total Capital -59.6%
Ret/ On T. Cap. - 3 Yr. Avg. -45.3%
Return On Equity 85.5%
Return On Equity - 3 Yr. Avg. -77.1%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 68.3%
Gross Margin - 3 Yr. Avg. 80%
EBITDA Margin -120%
EBITDA Margin - 3 Yr. Avg. -132.4%
Operating Margin -157.9%
Oper. Margin - 3 Yr. Avg. -171.2%
Pre-Tax Margin -203.4%
Pre-Tax Margin - 3 Yr. Avg. -195.9%
Net Profit Margin -202.1%
Net Profit Margin - 3 Yr. Avg. -176.4%
Effective Tax Rate 0.7%
Eff/ Tax Rate - 3 Yr. Avg. 18.5%
Payout Ratio 0%

NOG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NOG stock intrinsic value calculation we used $145 million for the last fiscal year's total revenue generated by Northern Oil&Gas. The default revenue input number comes from 2016 income statement of Northern Oil&Gas. 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 NOG 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 14.5%, whose default value for NOG is calculated based on our internal credit rating of Northern Oil&Gas, 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 Northern Oil&Gas.
    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 NOG stock the variable cost ratio is equal to 506.9%.

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 NOG 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 7.2% for Northern Oil&Gas.

Corporate tax rate of 27% is the nominal tax rate for Northern Oil&Gas. 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 NOG 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 NOG are equal to 333.1%.

Life of production assets of 7.9 years is the average useful life of capital assets used in Northern Oil&Gas 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 NOG is equal to -24.8%. 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 - $-487 million for Northern Oil&Gas - 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 63.824 million for Northern Oil&Gas 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 Northern Oil&Gas at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
OAS Oasis Petroleu 9.95 3.08  str.sell
AXAS Abraxas Petrol 2.09 0.03  str.sell
CLR Continental Re 45.92 2.87  str.sell
WLL Whiting Petrol 23.02 3.49  sell
EOG EOG Resources 101.64 6.05  str.sell
NFX Newfield Explo 30.30 1.18  str.sell
MRO Marathon Oil 15.05 5.13  str.sell

COMPANY NEWS

▶ Northern Oil and Gas, Inc. to Host Earnings Call   [Nov-09-17 07:40AM  ACCESSWIRE]
▶ US Distillate Inventories Are near a 3-Year Low   [Nov-03-17 12:40PM  Market Realist]
▶ US Crude Oil Production Is near 4-Year Low   [Oct-19-17 12:07PM  Market Realist]
▶ Irans Crude Oil Production Was Flat in August 2017   [Sep-19-17 10:32AM  Market Realist]
▶ US Gasoline Inventories Largest Weekly Drop in 27 Years   [Sep-14-17 04:05PM  Market Realist]
▶ Why Were Crude Oil Price Forecasts Downgraded Again?   [Sep-12-17 10:05AM  Market Realist]
▶ How Hurricane Harvey May Impact US Crude Oil Production   [Sep-01-17 05:10PM  Market Realist]
▶ US Distillate Inventories Rose for the First Time in 5 Weeks   [Aug-17-17 10:00AM  Market Realist]
▶ US Crude Oil Inventories Had a Massive Fall Last Week   [Aug-10-17 09:50AM  Market Realist]
▶ Northern Oil and Gas beats Street 2Q forecasts   [Aug-08-17 08:23PM  Associated Press]
▶ Why OPEC Crude Oil Production Rose in July 2017   [Jul-24-17 01:10PM  Market Realist]
▶ Will US Crude Oil Inventories Pressure Oil Prices?   [Jul-19-17 09:26AM  Market Realist]
▶ US Crude Oil Futures Rose above 20-Day Moving Averages   [Jul-18-17 10:56AM  Market Realist]
▶ US Distillate Inventories Rose for the 3rd Time in 5 Weeks   [Jul-13-17 09:20AM  Market Realist]
▶ US Crude Oil Production: Biggest Weekly Fall since July 2016   [Jun-29-17 12:35PM  Market Realist]
▶ US Distillate Inventories Rose for the Fourth Straight Week   [Jun-22-17 02:36PM  Market Realist]
▶ Could US Crude Oil Futures Hit $40 per Barrel?   [Jun-21-17 10:05AM  Market Realist]
▶ Fundamentals in Focus to Drive Energy Returns   [Jun-20-17 12:36PM  Market Realist]
▶ US Crude Oil Futures: Traders Track Key Moving Averages   [Jun-19-17 11:46AM  Market Realist]
▶ Analyzing US Gasoline Inventories and Gasoline Demand   [Jun-15-17 11:04AM  Market Realist]
▶ Goldman Sachs: OPEC and Russia Could Pressure Oil Prices   [May-23-17 08:50AM  Market Realist]
▶ Can OPEC and Russia Rescue the Oil Market?   [May-16-17 08:38AM  Market Realist]
▶ Northern Oil and Gas beats Street 1Q forecasts   [May-08-17 06:40AM  Associated Press]
▶ Why Investors Are Tracking US Gasoline Demand   [May-03-17 09:21AM  Market Realist]
▶ Will Russia Support OPEC if Production Cuts Continue?   [May-02-17 10:03AM  Market Realist]
▶ Will Gasoline Inventories Push Crude Oil Prices Higher?   [Apr-12-17 07:42AM  Market Realist]
▶ US Crude Oil Imports and Refinery Demand Impact Inventories   [Apr-06-17 09:36AM  Market Realist]
▶ Irans Crude Oil Exports Hit a Record: Whats Next?   [Apr-04-17 11:05AM  Market Realist]
▶ What to Expect from Crude Oil Prices in 2Q17   [Apr-03-17 09:36AM  Market Realist]
▶ Hedge Funds Reduced Their Bullish Bets on Crude Oil   [Mar-20-17 08:27AM  Market Realist]
▶ Conference-OGIS New York for Northern Oil & Gas, Inc.   [Mar-08-17 05:56PM  at Company Spotlight]
Financial statements of NOG
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.