Intrinsic value of TransGlobe Energy - TGA

Previous Close

$1.38

  Intrinsic Value

$0.97

stock screener

  Rating & Target

sell

-29%

Previous close

$1.38

 
Intrinsic value

$0.97

 
Up/down potential

-29%

 
Rating

sell

We calculate the intrinsic value of TGA 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, %
  -31.18
  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
  64
  102
  158
  237
  343
  484
  666
  894
  1,174
  1,510
  1,907
  2,369
  2,896
  3,490
  4,153
  4,883
  5,680
  6,543
  7,470
  8,461
  9,512
  10,624
  11,794
  13,023
  14,309
  15,652
  17,053
  18,511
  20,029
  21,607
  23,247
Variable operating expenses, $m
 
  227
  351
  525
  762
  1,075
  1,478
  1,983
  2,604
  3,351
  4,233
  5,256
  6,426
  7,745
  9,215
  10,835
  12,604
  14,519
  16,577
  18,774
  21,108
  23,574
  26,172
  28,898
  31,751
  34,732
  37,840
  41,077
  44,444
  47,946
  51,585
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
  121
  227
  351
  525
  762
  1,075
  1,478
  1,983
  2,604
  3,351
  4,233
  5,256
  6,426
  7,745
  9,215
  10,835
  12,604
  14,519
  16,577
  18,774
  21,108
  23,574
  26,172
  28,898
  31,751
  34,732
  37,840
  41,077
  44,444
  47,946
  51,585
Operating income, $m
  -58
  -125
  -193
  -288
  -418
  -590
  -812
  -1,090
  -1,431
  -1,841
  -2,325
  -2,887
  -3,530
  -4,255
  -5,062
  -5,952
  -6,924
  -7,976
  -9,106
  -10,313
  -11,595
  -12,950
  -14,377
  -15,875
  -17,443
  -19,080
  -20,787
  -22,565
  -24,415
  -26,339
  -28,338
EBITDA, $m
  -29
  -78
  -121
  -181
  -263
  -371
  -510
  -684
  -898
  -1,156
  -1,460
  -1,813
  -2,216
  -2,671
  -3,178
  -3,737
  -4,347
  -5,007
  -5,717
  -6,474
  -7,279
  -8,130
  -9,026
  -9,966
  -10,950
  -11,978
  -13,050
  -14,166
  -15,327
  -16,535
  -17,790
Interest expense (income), $m
  5
  4
  7
  13
  20
  30
  44
  61
  83
  109
  142
  180
  224
  274
  331
  394
  464
  540
  622
  710
  805
  905
  1,011
  1,123
  1,240
  1,363
  1,491
  1,625
  1,764
  1,909
  2,060
Earnings before tax, $m
  -75
  -128
  -200
  -301
  -439
  -621
  -855
  -1,151
  -1,513
  -1,950
  -2,467
  -3,067
  -3,753
  -4,529
  -5,393
  -6,346
  -7,388
  -8,516
  -9,728
  -11,024
  -12,400
  -13,856
  -15,389
  -16,998
  -18,683
  -20,443
  -22,279
  -24,190
  -26,179
  -28,248
  -30,398
Tax expense, $m
  13
  0
  0
  0
  0
  0
  0
  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
  -88
  -128
  -200
  -301
  -439
  -621
  -855
  -1,151
  -1,513
  -1,950
  -2,467
  -3,067
  -3,753
  -4,529
  -5,393
  -6,346
  -7,388
  -8,516
  -9,728
  -11,024
  -12,400
  -13,856
  -15,389
  -16,998
  -18,683
  -20,443
  -22,279
  -24,190
  -26,179
  -28,248
  -30,398

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  31
  0
  0
  0
  0
  0
  0
  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
  406
  599
  925
  1,384
  2,008
  2,832
  3,894
  5,227
  6,863
  8,831
  11,154
  13,851
  16,934
  20,412
  24,286
  28,556
  33,217
  38,263
  43,686
  49,477
  55,627
  62,128
  68,973
  76,158
  83,678
  91,533
  99,724
  108,253
  117,128
  126,356
  135,947
Adjusted assets (=assets-cash), $m
  375
  599
  925
  1,384
  2,008
  2,832
  3,894
  5,227
  6,863
  8,831
  11,154
  13,851
  16,934
  20,412
  24,286
  28,556
  33,217
  38,263
  43,686
  49,477
  55,627
  62,128
  68,973
  76,158
  83,678
  91,533
  99,724
  108,253
  117,128
  126,356
  135,947
Revenue / Adjusted assets
  0.171
  0.170
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
Average production assets, $m
  302
  483
  747
  1,117
  1,620
  2,286
  3,142
  4,218
  5,538
  7,126
  9,001
  11,177
  13,665
  16,471
  19,597
  23,043
  26,805
  30,877
  35,253
  39,925
  44,888
  50,134
  55,658
  61,455
  67,524
  73,862
  80,472
  87,355
  94,517
  101,963
  109,703
Working capital, $m
  -17
  48
  74
  111
  161
  227
  312
  419
  550
  708
  895
  1,111
  1,358
  1,637
  1,948
  2,290
  2,664
  3,069
  3,504
  3,968
  4,461
  4,983
  5,532
  6,108
  6,711
  7,341
  7,998
  8,682
  9,394
  10,134
  10,903
Total debt, $m
  84
  107
  185
  295
  445
  643
  898
  1,217
  1,610
  2,082
  2,640
  3,287
  4,027
  4,862
  5,792
  6,816
  7,935
  9,146
  10,448
  11,837
  13,313
  14,874
  16,517
  18,241
  20,046
  21,931
  23,897
  25,944
  28,074
  30,288
  32,590
Total liabilities, $m
  121
  144
  222
  332
  482
  680
  935
  1,254
  1,647
  2,119
  2,677
  3,324
  4,064
  4,899
  5,829
  6,853
  7,972
  9,183
  10,485
  11,874
  13,350
  14,911
  16,554
  18,278
  20,083
  21,968
  23,934
  25,981
  28,111
  30,325
  32,627
Total equity, $m
  285
  455
  703
  1,052
  1,526
  2,153
  2,959
  3,972
  5,216
  6,712
  8,477
  10,527
  12,870
  15,513
  18,457
  21,702
  25,245
  29,080
  33,202
  37,603
  42,276
  47,217
  52,420
  57,880
  63,595
  69,565
  75,790
  82,273
  89,018
  96,031
  103,320
Total liabilities and equity, $m
  406
  599
  925
  1,384
  2,008
  2,833
  3,894
  5,226
  6,863
  8,831
  11,154
  13,851
  16,934
  20,412
  24,286
  28,555
  33,217
  38,263
  43,687
  49,477
  55,626
  62,128
  68,974
  76,158
  83,678
  91,533
  99,724
  108,254
  117,129
  126,356
  135,947
Debt-to-equity ratio
  0.295
  0.230
  0.260
  0.280
  0.290
  0.300
  0.300
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  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
Adjusted equity ratio
  0.677
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -88
  -128
  -200
  -301
  -439
  -621
  -855
  -1,151
  -1,513
  -1,950
  -2,467
  -3,067
  -3,753
  -4,529
  -5,393
  -6,346
  -7,388
  -8,516
  -9,728
  -11,024
  -12,400
  -13,856
  -15,389
  -16,998
  -18,683
  -20,443
  -22,279
  -24,190
  -26,179
  -28,248
  -30,398
Depreciation, amort., depletion, $m
  29
  46
  72
  107
  156
  220
  302
  406
  533
  685
  865
  1,075
  1,314
  1,584
  1,884
  2,216
  2,577
  2,969
  3,390
  3,839
  4,316
  4,821
  5,352
  5,909
  6,493
  7,102
  7,738
  8,400
  9,088
  9,804
  10,548
Funds from operations, $m
  3
  -82
  -128
  -194
  -283
  -401
  -553
  -745
  -981
  -1,265
  -1,601
  -1,992
  -2,440
  -2,945
  -3,509
  -4,131
  -4,810
  -5,547
  -6,339
  -7,185
  -8,084
  -9,035
  -10,037
  -11,089
  -12,190
  -13,341
  -14,541
  -15,791
  -17,091
  -18,444
  -19,849
Change in working capital, $m
  4
  18
  26
  37
  50
  66
  85
  107
  131
  158
  186
  216
  247
  279
  311
  342
  374
  405
  435
  464
  493
  521
  549
  576
  603
  630
  657
  684
  712
  740
  769
Cash from operations, $m
  -1
  -100
  -154
  -230
  -333
  -467
  -638
  -852
  -1,112
  -1,423
  -1,788
  -2,208
  -2,687
  -3,224
  -3,819
  -4,473
  -5,184
  -5,951
  -6,774
  -7,649
  -8,577
  -9,557
  -10,586
  -11,665
  -12,793
  -13,971
  -15,198
  -16,475
  -17,803
  -19,184
  -20,619
Maintenance CAPEX, $m
  0
  -29
  -46
  -72
  -107
  -156
  -220
  -302
  -406
  -533
  -685
  -865
  -1,075
  -1,314
  -1,584
  -1,884
  -2,216
  -2,577
  -2,969
  -3,390
  -3,839
  -4,316
  -4,821
  -5,352
  -5,909
  -6,493
  -7,102
  -7,738
  -8,400
  -9,088
  -9,804
New CAPEX, $m
  -75
  -181
  -263
  -370
  -503
  -666
  -857
  -1,076
  -1,320
  -1,588
  -1,875
  -2,176
  -2,488
  -2,806
  -3,126
  -3,446
  -3,762
  -4,072
  -4,376
  -4,673
  -4,963
  -5,246
  -5,524
  -5,797
  -6,068
  -6,339
  -6,610
  -6,883
  -7,162
  -7,446
  -7,740
Cash from investing activities, $m
  -87
  -210
  -309
  -442
  -610
  -822
  -1,077
  -1,378
  -1,726
  -2,121
  -2,560
  -3,041
  -3,563
  -4,120
  -4,710
  -5,330
  -5,978
  -6,649
  -7,345
  -8,063
  -8,802
  -9,562
  -10,345
  -11,149
  -11,977
  -12,832
  -13,712
  -14,621
  -15,562
  -16,534
  -17,544
Free cash flow, $m
  -88
  -310
  -464
  -672
  -944
  -1,288
  -1,715
  -2,230
  -2,838
  -3,544
  -4,348
  -5,250
  -6,250
  -7,344
  -8,529
  -9,803
  -11,161
  -12,601
  -14,118
  -15,712
  -17,379
  -19,119
  -20,930
  -22,814
  -24,771
  -26,802
  -28,909
  -31,096
  -33,364
  -35,718
  -38,162
Issuance/(repayment) of debt, $m
  0
  54
  78
  110
  150
  198
  255
  320
  393
  472
  558
  647
  740
  835
  930
  1,025
  1,119
  1,211
  1,301
  1,390
  1,476
  1,560
  1,643
  1,724
  1,805
  1,885
  1,966
  2,047
  2,130
  2,215
  2,302
Issuance/(repurchase) of shares, $m
  0
  299
  448
  649
  913
  1,248
  1,662
  2,164
  2,757
  3,446
  4,232
  5,116
  6,097
  7,171
  8,337
  9,591
  10,930
  12,351
  13,850
  15,425
  17,074
  18,797
  20,591
  22,458
  24,398
  26,413
  28,504
  30,673
  32,924
  35,261
  37,687
Cash from financing (excl. dividends), $m  
  -5
  353
  526
  759
  1,063
  1,446
  1,917
  2,484
  3,150
  3,918
  4,790
  5,763
  6,837
  8,006
  9,267
  10,616
  12,049
  13,562
  15,151
  16,815
  18,550
  20,357
  22,234
  24,182
  26,203
  28,298
  30,470
  32,720
  35,054
  37,476
  39,989
Total cash flow (excl. dividends), $m
  -95
  42
  62
  87
  119
  157
  202
  254
  312
  375
  442
  514
  587
  662
  738
  813
  888
  961
  1,033
  1,103
  1,171
  1,238
  1,304
  1,368
  1,432
  1,496
  1,560
  1,624
  1,690
  1,757
  1,827
Retained Cash Flow (-), $m
  87
  -299
  -448
  -649
  -913
  -1,248
  -1,662
  -2,164
  -2,757
  -3,446
  -4,232
  -5,116
  -6,097
  -7,171
  -8,337
  -9,591
  -10,930
  -12,351
  -13,850
  -15,425
  -17,074
  -18,797
  -20,591
  -22,458
  -24,398
  -26,413
  -28,504
  -30,673
  -32,924
  -35,261
  -37,687
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
 
  -257
  -386
  -562
  -794
  -1,090
  -1,460
  -1,910
  -2,445
  -3,071
  -3,790
  -4,603
  -5,510
  -6,509
  -7,600
  -8,778
  -10,043
  -11,390
  -12,817
  -14,322
  -15,903
  -17,558
  -19,288
  -21,090
  -22,966
  -24,917
  -26,944
  -29,049
  -31,234
  -33,504
  -35,860
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  -240
  -336
  -453
  -586
  -733
  -886
  -1,037
  -1,177
  -1,298
  -1,390
  -1,449
  -1,471
  -1,456
  -1,404
  -1,320
  -1,211
  -1,083
  -945
  -804
  -667
  -539
  -424
  -325
  -242
  -175
  -123
  -84
  -55
  -35
  -22
Current shareholders' claim on cash, %
  100
  40.1
  16.6
  7.2
  3.2
  1.5
  0.7
  0.3
  0.2
  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

TransGlobe Energy Corporation is an oil exploration and production company. The Company's activities are concentrated in the Arab Republic of Egypt (Egypt). The Company conducts its operations through the Arab Republic of Egypt segment. The Company is primarily engaged in oil exploration, development, production and the acquisition of properties. It holds interests in various production sharing concessions (PSC) in Eastern Desert Egypt and Western Desert Egypt. Its blocks in Eastern Desert Egypt include West Gharib, which covers approximately 34,860 acres; West Bakr, covering over 11,600 acres; North West (NW) Gharib, covering approximately 162,000 acres; South East (SE) Gharib, which covers over 125,650 acres, and South West (SW) Gharib, covering approximately 48,310 acres. Its blocks in the Western Desert Egypt include South Alamein, covering approximately 335,830 acres; South Ghazalat, covering over 465,300 acres, and North West (NW) Sitra, covering approximately 480,850 acres.

FINANCIAL RATIOS  of  TransGlobe Energy (TGA)

Valuation Ratios
P/E Ratio -1.1
Price to Sales 1.6
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -99.6
Price to Free Cash Flow -1.3
Growth Rates
Sales Growth Rate -31.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 66.7%
Cap. Spend. - 3 Yr. Gr. Rate -10.3%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 2.1%
Total Debt to Equity 29.5%
Interest Coverage -14
Management Effectiveness
Return On Assets -19.1%
Ret/ On Assets - 3 Yr. Avg. -11.8%
Return On Total Capital -21.9%
Ret/ On T. Cap. - 3 Yr. Avg. -13.7%
Return On Equity -26.8%
Return On Equity - 3 Yr. Avg. -16.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 35.9%
Gross Margin - 3 Yr. Avg. 50.7%
EBITDA Margin -64.1%
EBITDA Margin - 3 Yr. Avg. -30.8%
Operating Margin -89.1%
Oper. Margin - 3 Yr. Avg. -64.2%
Pre-Tax Margin -117.2%
Pre-Tax Margin - 3 Yr. Avg. -73%
Net Profit Margin -137.5%
Net Profit Margin - 3 Yr. Avg. -82.5%
Effective Tax Rate -17.3%
Eff/ Tax Rate - 3 Yr. Avg. 24.8%
Payout Ratio 0%

TGA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TGA stock intrinsic value calculation we used $64 million for the last fiscal year's total revenue generated by TransGlobe Energy. The default revenue input number comes from 2016 income statement of TransGlobe 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 TGA 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 6.8%, whose default value for TGA is calculated based on our internal credit rating of TransGlobe 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 TransGlobe 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 TGA stock the variable cost ratio is equal to 221.9%.

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 TGA 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 6.8% for TransGlobe Energy.

Corporate tax rate of 27% is the nominal tax rate for TransGlobe 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 TGA 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 TGA are equal to 471.9%.

Life of production assets of 10.4 years is the average useful life of capital assets used in TransGlobe 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 TGA is equal to 46.9%. 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 - $285 million for TransGlobe 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 73.215 million for TransGlobe 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 TransGlobe Energy at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ TransGlobe Energy Corporation to Host Earnings Call   [Nov-09-17 08:10AM  ACCESSWIRE]
▶ Transglobe reports 2Q loss   [Aug-14-17 11:24PM  Associated Press]
▶ TransGlobe Energy Corporation Reports Voting Results   [May-11-17 06:48PM  Marketwired]
▶ Transglobe reports 1Q loss   [06:28AM  Associated Press]
▶ Transglobe reports 4Q loss   [Mar-07-17 07:18PM  Associated Press]
▶ IIROC Trade Resumption - TGL.DB   [Feb-10-17 08:44AM  PR Newswire]
▶ IIROC Trading Halt - TGL.DB   [08:33AM  PR Newswire]
▶ TransGlobe Energy Corporation Reports Voting Results   [May-13-16 01:40PM  Marketwired]
▶ Do Hedge Funds Love POZEN Inc. (POZN)?   [Nov-30  02:53PM  at Insider Monkey]
▶ Should You Avoid Transenterix Inc (TRXC)?   [Nov-27  06:15PM  at Insider Monkey]
▶ Should You Buy The Phoenix Companies, Inc. (PNX)?   [Nov-21  02:35PM  at Insider Monkey]
▶ TransGlobe Energy Corporation Reports Voting Results   [May-08  10:18AM  Marketwired]
Financial statements of TGA
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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