Intrinsic value of PetroQuest Energy - PQ

Previous Close

$1.89

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

0%

Previous close

$1.89

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
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 PQ 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, %
  -42.24
  50.00
  45.50
  41.45
  37.81
  34.52
  31.57
  28.91
  26.52
  24.37
  22.43
  20.69
  19.12
  17.71
  16.44
  15.29
  14.27
  13.34
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
Revenue, $m
  67
  101
  146
  207
  285
  383
  505
  650
  823
  1,023
  1,253
  1,512
  1,801
  2,120
  2,469
  2,847
  3,253
  3,687
  4,148
  4,635
  5,149
  5,688
  6,252
  6,842
  7,457
  8,097
  8,764
  9,457
  10,177
  10,926
  11,704
Variable operating expenses, $m
 
  354
  515
  728
  1,004
  1,350
  1,777
  2,291
  2,898
  3,604
  4,413
  5,326
  6,345
  7,468
  8,696
  10,026
  11,456
  12,984
  14,608
  16,325
  18,134
  20,032
  22,020
  24,097
  26,263
  28,519
  30,866
  33,307
  35,844
  38,480
  41,220
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
  157
  354
  515
  728
  1,004
  1,350
  1,777
  2,291
  2,898
  3,604
  4,413
  5,326
  6,345
  7,468
  8,696
  10,026
  11,456
  12,984
  14,608
  16,325
  18,134
  20,032
  22,020
  24,097
  26,263
  28,519
  30,866
  33,307
  35,844
  38,480
  41,220
Operating income, $m
  -90
  -253
  -369
  -522
  -719
  -967
  -1,272
  -1,640
  -2,075
  -2,581
  -3,160
  -3,814
  -4,543
  -5,348
  -6,227
  -7,179
  -8,203
  -9,298
  -10,460
  -11,690
  -12,985
  -14,345
  -15,768
  -17,255
  -18,806
  -20,422
  -22,102
  -23,850
  -25,667
  -27,554
  -29,516
EBITDA, $m
  -61
  -215
  -312
  -442
  -609
  -819
  -1,077
  -1,389
  -1,757
  -2,185
  -2,676
  -3,229
  -3,847
  -4,528
  -5,272
  -6,079
  -6,946
  -7,872
  -8,857
  -9,898
  -10,994
  -12,146
  -13,351
  -14,610
  -15,923
  -17,291
  -18,714
  -20,194
  -21,732
  -23,331
  -24,992
Interest expense (income), $m
  33
  28
  6
  13
  23
  36
  52
  71
  95
  123
  155
  192
  234
  281
  333
  389
  450
  516
  586
  660
  739
  822
  910
  1,001
  1,096
  1,196
  1,299
  1,407
  1,519
  1,636
  1,757
Earnings before tax, $m
  -90
  -281
  -375
  -535
  -742
  -1,003
  -1,324
  -1,711
  -2,170
  -2,704
  -3,315
  -4,006
  -4,777
  -5,629
  -6,559
  -7,568
  -8,653
  -9,813
  -11,046
  -12,350
  -13,724
  -15,167
  -16,678
  -18,256
  -19,903
  -21,617
  -23,402
  -25,257
  -27,186
  -29,190
  -31,273
Tax expense, $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
Net income, $m
  -91
  -281
  -375
  -535
  -742
  -1,003
  -1,324
  -1,711
  -2,170
  -2,704
  -3,315
  -4,006
  -4,777
  -5,629
  -6,559
  -7,568
  -8,653
  -9,813
  -11,046
  -12,350
  -13,724
  -15,167
  -16,678
  -18,256
  -19,903
  -21,617
  -23,402
  -25,257
  -27,186
  -29,190
  -31,273

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  28
  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
  145
  175
  255
  361
  497
  669
  880
  1,135
  1,436
  1,786
  2,187
  2,639
  3,144
  3,701
  4,309
  4,968
  5,677
  6,434
  7,238
  8,089
  8,985
  9,926
  10,911
  11,940
  13,014
  14,132
  15,295
  16,504
  17,761
  19,067
  20,425
Adjusted assets (=assets-cash), $m
  117
  175
  255
  361
  497
  669
  880
  1,135
  1,436
  1,786
  2,187
  2,639
  3,144
  3,701
  4,309
  4,968
  5,677
  6,434
  7,238
  8,089
  8,985
  9,926
  10,911
  11,940
  13,014
  14,132
  15,295
  16,504
  17,761
  19,067
  20,425
Revenue / Adjusted assets
  0.573
  0.577
  0.573
  0.573
  0.573
  0.572
  0.574
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
  0.573
Average production assets, $m
  130
  194
  283
  400
  551
  741
  975
  1,257
  1,591
  1,978
  2,422
  2,923
  3,482
  4,099
  4,773
  5,503
  6,288
  7,126
  8,017
  8,960
  9,952
  10,994
  12,086
  13,225
  14,414
  15,652
  16,940
  18,280
  19,672
  21,119
  22,623
Working capital, $m
  -37
  -63
  -92
  -130
  -179
  -240
  -316
  -408
  -516
  -642
  -786
  -948
  -1,130
  -1,330
  -1,548
  -1,785
  -2,039
  -2,312
  -2,601
  -2,906
  -3,228
  -3,566
  -3,920
  -4,290
  -4,675
  -5,077
  -5,495
  -5,929
  -6,381
  -6,850
  -7,338
Total debt, $m
  294
  56
  128
  223
  346
  500
  690
  920
  1,190
  1,505
  1,866
  2,273
  2,727
  3,229
  3,776
  4,369
  5,007
  5,688
  6,413
  7,178
  7,985
  8,832
  9,718
  10,644
  11,610
  12,616
  13,663
  14,752
  15,883
  17,059
  18,280
Total liabilities, $m
  396
  158
  230
  325
  448
  602
  792
  1,022
  1,292
  1,607
  1,968
  2,375
  2,829
  3,331
  3,878
  4,471
  5,109
  5,790
  6,515
  7,280
  8,087
  8,934
  9,820
  10,746
  11,712
  12,718
  13,765
  14,854
  15,985
  17,161
  18,382
Total equity, $m
  -251
  18
  26
  36
  50
  67
  88
  114
  144
  179
  219
  264
  314
  370
  431
  497
  568
  643
  724
  809
  899
  993
  1,091
  1,194
  1,301
  1,413
  1,529
  1,650
  1,776
  1,907
  2,042
Total liabilities and equity, $m
  145
  176
  256
  361
  498
  669
  880
  1,136
  1,436
  1,786
  2,187
  2,639
  3,143
  3,701
  4,309
  4,968
  5,677
  6,433
  7,239
  8,089
  8,986
  9,927
  10,911
  11,940
  13,013
  14,131
  15,294
  16,504
  17,761
  19,068
  20,424
Debt-to-equity ratio
  -1.171
  3.180
  5.000
  6.170
  6.950
  7.480
  7.840
  8.100
  8.290
  8.430
  8.530
  8.610
  8.680
  8.720
  8.760
  8.790
  8.820
  8.840
  8.860
  8.870
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
Adjusted equity ratio
  -2.385
  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
  -91
  -281
  -375
  -535
  -742
  -1,003
  -1,324
  -1,711
  -2,170
  -2,704
  -3,315
  -4,006
  -4,777
  -5,629
  -6,559
  -7,568
  -8,653
  -9,813
  -11,046
  -12,350
  -13,724
  -15,167
  -16,678
  -18,256
  -19,903
  -21,617
  -23,402
  -25,257
  -27,186
  -29,190
  -31,273
Depreciation, amort., depletion, $m
  29
  39
  57
  80
  110
  148
  195
  251
  318
  396
  484
  585
  696
  820
  955
  1,101
  1,258
  1,425
  1,603
  1,792
  1,990
  2,199
  2,417
  2,645
  2,883
  3,130
  3,388
  3,656
  3,934
  4,224
  4,525
Funds from operations, $m
  -111
  -243
  -318
  -455
  -632
  -854
  -1,129
  -1,460
  -1,852
  -2,308
  -2,831
  -3,422
  -4,081
  -4,809
  -5,605
  -6,468
  -7,396
  -8,388
  -9,443
  -10,558
  -11,734
  -12,968
  -14,261
  -15,611
  -17,020
  -18,487
  -20,014
  -21,601
  -23,252
  -24,967
  -26,749
Change in working capital, $m
  -54
  -21
  -29
  -38
  -49
  -62
  -76
  -91
  -108
  -126
  -144
  -163
  -181
  -200
  -219
  -237
  -255
  -272
  -289
  -306
  -322
  -338
  -354
  -370
  -386
  -402
  -418
  -435
  -452
  -469
  -488
Cash from operations, $m
  -57
  -222
  -289
  -417
  -583
  -793
  -1,053
  -1,368
  -1,744
  -2,182
  -2,687
  -3,259
  -3,900
  -4,609
  -5,386
  -6,231
  -7,141
  -8,116
  -9,154
  -10,253
  -11,412
  -12,630
  -13,907
  -15,241
  -16,634
  -18,085
  -19,596
  -21,167
  -22,800
  -24,497
  -26,261
Maintenance CAPEX, $m
  0
  -26
  -39
  -57
  -80
  -110
  -148
  -195
  -251
  -318
  -396
  -484
  -585
  -696
  -820
  -955
  -1,101
  -1,258
  -1,425
  -1,603
  -1,792
  -1,990
  -2,199
  -2,417
  -2,645
  -2,883
  -3,130
  -3,388
  -3,656
  -3,934
  -4,224
New CAPEX, $m
  -30
  -65
  -88
  -117
  -151
  -190
  -234
  -282
  -333
  -388
  -444
  -501
  -559
  -617
  -674
  -730
  -785
  -839
  -891
  -942
  -993
  -1,042
  -1,091
  -1,140
  -1,189
  -1,238
  -1,288
  -1,340
  -1,392
  -1,447
  -1,504
Cash from investing activities, $m
  -5
  -91
  -127
  -174
  -231
  -300
  -382
  -477
  -584
  -706
  -840
  -985
  -1,144
  -1,313
  -1,494
  -1,685
  -1,886
  -2,097
  -2,316
  -2,545
  -2,785
  -3,032
  -3,290
  -3,557
  -3,834
  -4,121
  -4,418
  -4,728
  -5,048
  -5,381
  -5,728
Free cash flow, $m
  -62
  -312
  -417
  -591
  -814
  -1,093
  -1,435
  -1,845
  -2,329
  -2,888
  -3,526
  -4,245
  -5,043
  -5,922
  -6,880
  -7,915
  -9,027
  -10,212
  -11,470
  -12,799
  -14,196
  -15,663
  -17,197
  -18,798
  -20,468
  -22,206
  -24,015
  -25,895
  -27,848
  -29,879
  -31,988
Issuance/(repayment) of debt, $m
  -44
  -215
  72
  95
  123
  155
  190
  229
  271
  315
  361
  407
  454
  501
  547
  593
  638
  681
  724
  766
  807
  847
  887
  926
  966
  1,006
  1,047
  1,088
  1,131
  1,176
  1,222
Issuance/(repurchase) of shares, $m
  0
  555
  383
  545
  755
  1,020
  1,345
  1,737
  2,200
  2,739
  3,355
  4,051
  4,828
  5,684
  6,620
  7,634
  8,724
  9,889
  11,127
  12,435
  13,814
  15,261
  16,776
  18,359
  20,010
  21,729
  23,518
  25,378
  27,312
  29,321
  31,409
Cash from financing (excl. dividends), $m  
  -57
  340
  455
  640
  878
  1,175
  1,535
  1,966
  2,471
  3,054
  3,716
  4,458
  5,282
  6,185
  7,167
  8,227
  9,362
  10,570
  11,851
  13,201
  14,621
  16,108
  17,663
  19,285
  20,976
  22,735
  24,565
  26,466
  28,443
  30,497
  32,631
Total cash flow (excl. dividends), $m
  -119
  28
  38
  50
  65
  81
  100
  120
  142
  166
  190
  214
  239
  263
  288
  312
  335
  358
  381
  403
  424
  445
  466
  487
  508
  529
  550
  572
  595
  618
  642
Retained Cash Flow (-), $m
  88
  -555
  -383
  -545
  -755
  -1,020
  -1,345
  -1,737
  -2,200
  -2,739
  -3,355
  -4,051
  -4,828
  -5,684
  -6,620
  -7,634
  -8,724
  -9,889
  -11,127
  -12,435
  -13,814
  -15,261
  -16,776
  -18,359
  -20,010
  -21,729
  -23,518
  -25,378
  -27,312
  -29,321
  -31,409
Prev. year cash balance distribution, $m
 
  5
  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
 
  -522
  -345
  -495
  -691
  -939
  -1,245
  -1,616
  -2,058
  -2,573
  -3,166
  -3,837
  -4,589
  -5,421
  -6,332
  -7,322
  -8,389
  -9,531
  -10,746
  -12,033
  -13,390
  -14,816
  -16,310
  -17,872
  -19,502
  -21,200
  -22,968
  -24,806
  -26,717
  -28,703
  -30,767
Discount rate, %
 
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.65
  23.79
  24.98
  26.23
  27.54
  28.91
  30.36
  31.88
  33.47
  35.14
  36.90
  38.75
  40.68
  42.72
  44.85
  47.10
  49.45
  51.92
  54.52
  57.25
  60.11
  63.11
  66.27
PV of cash for distribution, $m
 
  -450
  -252
  -303
  -349
  -384
  -406
  -412
  -402
  -377
  -341
  -296
  -248
  -200
  -155
  -115
  -83
  -57
  -38
  -24
  -15
  -8
  -5
  -2
  -1
  -1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  2.2
  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

PetroQuest Energy, Inc. is an oil and gas company. The Company is engaged in exploratory, development and acquisition activities. The Company has approximately 30 gross exploratory wells and over 30 gross development wells. The Company has reserves in various areas, including East Texas, Gulf Coast Basin and Oklahoma Woodford. Its annual production from East Texas area is approximately 114.1 billions of cubic feet equivalent (Bcfe); Gulf Coast Basin is over 43.9 Bcfe, and Oklahoma Woodford is approximately 20.0 Bcfe. The net production from its East Texas assets averages over 30.4 millions of cubic feet equivalent (MMcfe) per day. Production from Gulf Coast Basin area totals approximately 37.8 MMcfe per day. The average daily production from its Oklahoma-Woodford properties totals over 25 MMcfe per day. The Company sells its oil and natural gas production under fixed or floating market contracts.

FINANCIAL RATIOS  of  PetroQuest Energy (PQ)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 0.6
Price to Book -0.2
Price to Tangible Book
Price to Cash Flow -0.7
Price to Free Cash Flow -0.5
Growth Rates
Sales Growth Rate -42.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -67%
Cap. Spend. - 3 Yr. Gr. Rate -36.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity -108%
Total Debt to Equity -117.1%
Interest Coverage -2
Management Effectiveness
Return On Assets -22%
Ret/ On Assets - 3 Yr. Avg. -18.8%
Return On Total Capital -80.2%
Ret/ On T. Cap. - 3 Yr. Avg. -51.4%
Return On Equity 44%
Return On Equity - 3 Yr. Avg. 779.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 56.7%
Gross Margin - 3 Yr. Avg. 65.2%
EBITDA Margin -41.8%
EBITDA Margin - 3 Yr. Avg. -46.4%
Operating Margin -134.3%
Oper. Margin - 3 Yr. Avg. -124.5%
Pre-Tax Margin -134.3%
Pre-Tax Margin - 3 Yr. Avg. -124.5%
Net Profit Margin -135.8%
Net Profit Margin - 3 Yr. Avg. -125.5%
Effective Tax Rate -1.1%
Eff/ Tax Rate - 3 Yr. Avg. -4.3%
Payout Ratio -1.1%

PQ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PQ stock intrinsic value calculation we used $67 million for the last fiscal year's total revenue generated by PetroQuest Energy. The default revenue input number comes from 2016 income statement of PetroQuest Energy. 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 PQ stock valuation model: a) initial revenue growth rate of 50% 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 16.1%, whose default value for PQ is calculated based on our internal credit rating of PetroQuest Energy, 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 PetroQuest Energy.
    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 PQ stock the variable cost ratio is equal to 352.2%.

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 PQ 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 10.3% for PetroQuest Energy.

Corporate tax rate of 27% is the nominal tax rate for PetroQuest Energy. 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 PQ 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 PQ are equal to 193.3%.

Life of production assets of 4.5 years is the average useful life of capital assets used in PetroQuest Energy 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 PQ is equal to -62.7%. 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 - $-251 million for PetroQuest Energy - 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 21.151 million for PetroQuest Energy 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 PetroQuest Energy at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ 5 Top Performing Energy Stocks of September   [Oct-04-17 04:14PM  Zacks]
▶ PetroQuest Energy Continued Listing Plan Accepted by NYSE   [Aug-24-17 04:59PM  GlobeNewswire]
▶ PetroQuest reports 2Q loss   [Aug-02-17 11:27PM  Associated Press]
▶ PetroQuest reports 1Q loss   [May-03-17 05:39PM  Associated Press]
▶ Webcast-OGIS New York for PetroQuest Energy, Inc.   [Mar-08-17 05:56PM  at Company Spotlight]
▶ PetroQuest reports 4Q loss   [Mar-07-17 06:20PM  Associated Press]
▶ Hedge Funds Are Crazy About Avinger Inc (AVGR)   [Dec-15-16 06:23AM  at Insider Monkey]
▶ [$$] PetroQuest Skips Interest Payment on Bonds   [Sep-02-16 02:01PM  at The Wall Street Journal]
▶ 9 Energy and Metals Stocks Analysts Want You to Buy Now   [Aug-28-16 10:40AM  at 24/7 Wall St.]
Financial statements of PQ
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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