Intrinsic value of Abraxas Petroleum Corporation - AXAS

Previous Close

$1.33

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$1.33

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of AXAS 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 0001), $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 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  138
  213
  318
  461
  651
  895
  1,201
  1,577
  2,029
  2,563
  3,183
  3,891
  4,690
  5,580
  6,562
  7,633
  8,792
  10,038
  11,369
  12,782
  14,276
  15,849
  17,500
  19,228
  21,033
  22,915
  24,875
  26,914
  29,034
  31,238
Variable operating expenses, $m
  302
  454
  668
  958
  1,342
  1,836
  2,456
  3,218
  4,133
  5,215
  6,446
  7,881
  9,499
  11,302
  13,289
  15,458
  17,807
  20,330
  23,025
  25,887
  28,912
  32,098
  35,441
  38,941
  42,596
  46,408
  50,377
  54,508
  58,802
  63,265
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
  302
  454
  668
  958
  1,342
  1,836
  2,456
  3,218
  4,133
  5,215
  6,446
  7,881
  9,499
  11,302
  13,289
  15,458
  17,807
  20,330
  23,025
  25,887
  28,912
  32,098
  35,441
  38,941
  42,596
  46,408
  50,377
  54,508
  58,802
  63,265
Operating income, $m
  -165
  -242
  -350
  -497
  -691
  -941
  -1,255
  -1,641
  -2,104
  -2,652
  -3,263
  -3,989
  -4,809
  -5,721
  -6,727
  -7,825
  -9,014
  -10,292
  -11,656
  -13,105
  -14,636
  -16,249
  -17,942
  -19,713
  -21,564
  -23,493
  -25,503
  -27,594
  -29,768
  -32,027
EBITDA, $m
  -98
  -152
  -227
  -330
  -465
  -639
  -858
  -1,127
  -1,450
  -1,831
  -2,274
  -2,780
  -3,351
  -3,987
  -4,689
  -5,454
  -6,282
  -7,173
  -8,124
  -9,133
  -10,201
  -11,325
  -12,504
  -13,739
  -15,029
  -16,373
  -17,774
  -19,231
  -20,746
  -22,321
Interest expense (income), $m
  4
  5
  10
  18
  29
  44
  64
  90
  122
  162
  209
  265
  331
  405
  489
  583
  686
  799
  921
  1,052
  1,192
  1,341
  1,498
  1,664
  1,837
  2,019
  2,209
  2,407
  2,614
  2,828
  3,051
Earnings before tax, $m
  -170
  -252
  -368
  -526
  -735
  -1,005
  -1,345
  -1,763
  -2,266
  -2,861
  -3,529
  -4,320
  -5,214
  -6,211
  -7,310
  -8,512
  -9,813
  -11,213
  -12,708
  -14,297
  -15,977
  -17,747
  -19,605
  -21,551
  -23,583
  -25,703
  -27,910
  -30,207
  -32,596
  -35,079
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -170
  -252
  -368
  -526
  -735
  -1,005
  -1,345
  -1,763
  -2,266
  -2,861
  -3,529
  -4,320
  -5,214
  -6,211
  -7,310
  -8,512
  -9,813
  -11,213
  -12,708
  -14,297
  -15,977
  -17,747
  -19,605
  -21,551
  -23,583
  -25,703
  -27,910
  -30,207
  -32,596
  -35,079

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  438
  677
  1,013
  1,469
  2,073
  2,849
  3,825
  5,022
  6,462
  8,163
  10,136
  12,392
  14,937
  17,772
  20,897
  24,308
  28,001
  31,969
  36,207
  40,707
  45,464
  50,474
  55,731
  61,234
  66,983
  72,976
  79,219
  85,713
  92,466
  99,485
Adjusted assets (=assets-cash), $m
  438
  677
  1,013
  1,469
  2,073
  2,849
  3,825
  5,022
  6,462
  8,163
  10,136
  12,392
  14,937
  17,772
  20,897
  24,308
  28,001
  31,969
  36,207
  40,707
  45,464
  50,474
  55,731
  61,234
  66,983
  72,976
  79,219
  85,713
  92,466
  99,485
Revenue / Adjusted assets
  0.315
  0.315
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
  0.314
Average production assets, $m
  299
  462
  692
  1,003
  1,416
  1,946
  2,612
  3,430
  4,414
  5,575
  6,922
  8,463
  10,201
  12,137
  14,271
  16,601
  19,123
  21,833
  24,727
  27,801
  31,050
  34,471
  38,062
  41,820
  45,746
  49,839
  54,102
  58,538
  63,150
  67,943
Working capital, $m
  -57
  -88
  -132
  -191
  -270
  -371
  -498
  -654
  -842
  -1,064
  -1,321
  -1,615
  -1,946
  -2,316
  -2,723
  -3,168
  -3,649
  -4,166
  -4,718
  -5,305
  -5,924
  -6,577
  -7,262
  -7,979
  -8,728
  -9,510
  -10,323
  -11,169
  -12,049
  -12,964
Total debt, $m
  188
  334
  540
  819
  1,189
  1,664
  2,261
  2,994
  3,875
  4,916
  6,123
  7,504
  9,062
  10,797
  12,709
  14,797
  17,057
  19,485
  22,079
  24,833
  27,744
  30,810
  34,028
  37,396
  40,913
  44,582
  48,402
  52,377
  56,509
  60,805
Total liabilities, $m
  268
  414
  620
  899
  1,268
  1,744
  2,341
  3,074
  3,955
  4,996
  6,203
  7,584
  9,141
  10,876
  12,789
  14,876
  17,136
  19,565
  22,158
  24,913
  27,824
  30,890
  34,107
  37,475
  40,993
  44,662
  48,482
  52,456
  56,589
  60,885
Total equity, $m
  170
  263
  393
  570
  804
  1,106
  1,484
  1,949
  2,507
  3,167
  3,933
  4,808
  5,796
  6,896
  8,108
  9,431
  10,864
  12,404
  14,048
  15,794
  17,640
  19,584
  21,624
  23,759
  25,989
  28,315
  30,737
  33,257
  35,877
  38,600
Total liabilities and equity, $m
  438
  677
  1,013
  1,469
  2,072
  2,850
  3,825
  5,023
  6,462
  8,163
  10,136
  12,392
  14,937
  17,772
  20,897
  24,307
  28,000
  31,969
  36,206
  40,707
  45,464
  50,474
  55,731
  61,234
  66,982
  72,977
  79,219
  85,713
  92,466
  99,485
Debt-to-equity ratio
  1.110
  1.270
  1.370
  1.440
  1.480
  1.510
  1.520
  1.540
  1.550
  1.550
  1.560
  1.560
  1.560
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.570
  1.580
  1.580
Adjusted equity ratio
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388
  0.388

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -170
  -252
  -368
  -526
  -735
  -1,005
  -1,345
  -1,763
  -2,266
  -2,861
  -3,529
  -4,320
  -5,214
  -6,211
  -7,310
  -8,512
  -9,813
  -11,213
  -12,708
  -14,297
  -15,977
  -17,747
  -19,605
  -21,551
  -23,583
  -25,703
  -27,910
  -30,207
  -32,596
  -35,079
Depreciation, amort., depletion, $m
  67
  90
  123
  167
  226
  302
  397
  514
  654
  820
  989
  1,209
  1,457
  1,734
  2,039
  2,372
  2,732
  3,119
  3,532
  3,972
  4,436
  4,924
  5,437
  5,974
  6,535
  7,120
  7,729
  8,363
  9,021
  9,706
Funds from operations, $m
  -103
  -162
  -245
  -359
  -509
  -704
  -948
  -1,249
  -1,612
  -2,041
  -2,540
  -3,111
  -3,757
  -4,477
  -5,272
  -6,140
  -7,081
  -8,094
  -9,176
  -10,326
  -11,542
  -12,823
  -14,168
  -15,576
  -17,048
  -18,583
  -20,181
  -21,845
  -23,575
  -25,372
Change in working capital, $m
  -21
  -31
  -44
  -59
  -79
  -101
  -127
  -156
  -188
  -222
  -257
  -294
  -332
  -369
  -407
  -445
  -481
  -517
  -552
  -586
  -620
  -653
  -685
  -717
  -749
  -781
  -813
  -846
  -880
  -915
Cash from operations, $m
  -82
  -131
  -202
  -299
  -431
  -602
  -821
  -1,093
  -1,424
  -1,819
  -2,282
  -2,817
  -3,425
  -4,107
  -4,864
  -5,696
  -6,600
  -7,577
  -8,624
  -9,739
  -10,922
  -12,170
  -13,483
  -14,859
  -16,299
  -17,802
  -19,368
  -20,998
  -22,695
  -24,458
Maintenance CAPEX, $m
  -27
  -43
  -66
  -99
  -143
  -202
  -278
  -373
  -490
  -631
  -796
  -989
  -1,209
  -1,457
  -1,734
  -2,039
  -2,372
  -2,732
  -3,119
  -3,532
  -3,972
  -4,436
  -4,924
  -5,437
  -5,974
  -6,535
  -7,120
  -7,729
  -8,363
  -9,021
New CAPEX, $m
  -112
  -163
  -229
  -312
  -412
  -531
  -666
  -818
  -984
  -1,161
  -1,348
  -1,541
  -1,738
  -1,936
  -2,134
  -2,330
  -2,522
  -2,710
  -2,894
  -3,074
  -3,249
  -3,421
  -3,591
  -3,758
  -3,926
  -4,094
  -4,263
  -4,435
  -4,612
  -4,793
Cash from investing activities, $m
  -139
  -206
  -295
  -411
  -555
  -733
  -944
  -1,191
  -1,474
  -1,792
  -2,144
  -2,530
  -2,947
  -3,393
  -3,868
  -4,369
  -4,894
  -5,442
  -6,013
  -6,606
  -7,221
  -7,857
  -8,515
  -9,195
  -9,900
  -10,629
  -11,383
  -12,164
  -12,975
  -13,814
Free cash flow, $m
  -221
  -337
  -497
  -710
  -986
  -1,335
  -1,765
  -2,284
  -2,898
  -3,611
  -4,427
  -5,347
  -6,372
  -7,501
  -8,732
  -10,064
  -11,494
  -13,019
  -14,637
  -16,345
  -18,142
  -20,027
  -21,998
  -24,055
  -26,199
  -28,430
  -30,751
  -33,163
  -35,669
  -38,273
Issuance/(repayment) of debt, $m
  101
  146
  205
  279
  369
  475
  597
  733
  881
  1,040
  1,208
  1,381
  1,557
  1,735
  1,912
  2,088
  2,260
  2,429
  2,593
  2,754
  2,911
  3,066
  3,218
  3,368
  3,518
  3,668
  3,820
  3,975
  4,133
  4,295
Issuance/(repurchase) of shares, $m
  233
  345
  498
  703
  970
  1,307
  1,723
  2,227
  2,825
  3,521
  4,294
  5,196
  6,201
  7,311
  8,523
  9,835
  11,246
  12,753
  14,352
  16,043
  17,823
  19,691
  21,645
  23,686
  25,813
  28,028
  30,332
  32,727
  35,216
  37,802
Cash from financing (excl. dividends), $m  
  334
  491
  703
  982
  1,339
  1,782
  2,320
  2,960
  3,706
  4,561
  5,502
  6,577
  7,758
  9,046
  10,435
  11,923
  13,506
  15,182
  16,945
  18,797
  20,734
  22,757
  24,863
  27,054
  29,331
  31,696
  34,152
  36,702
  39,349
  42,097
Total cash flow (excl. dividends), $m
  113
  154
  207
  273
  353
  447
  555
  676
  809
  950
  1,075
  1,229
  1,387
  1,545
  1,703
  1,859
  2,012
  2,162
  2,309
  2,452
  2,592
  2,730
  2,865
  2,999
  3,132
  3,266
  3,401
  3,539
  3,680
  3,825
Retained Cash Flow (-), $m
  -233
  -345
  -498
  -703
  -970
  -1,307
  -1,723
  -2,227
  -2,825
  -3,521
  -4,294
  -5,196
  -6,201
  -7,311
  -8,523
  -9,835
  -11,246
  -12,753
  -14,352
  -16,043
  -17,823
  -19,691
  -21,645
  -23,686
  -25,813
  -28,028
  -30,332
  -32,727
  -35,216
  -37,802
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
  -120
  -191
  -291
  -430
  -617
  -860
  -1,168
  -1,551
  -2,016
  -2,570
  -3,219
  -3,966
  -4,815
  -5,766
  -6,820
  -7,976
  -9,234
  -10,590
  -12,043
  -13,591
  -15,231
  -16,961
  -18,780
  -20,687
  -22,681
  -24,762
  -26,931
  -29,188
  -31,536
  -33,977
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  -114
  -170
  -243
  -335
  -444
  -568
  -704
  -845
  -986
  -1,117
  -1,232
  -1,323
  -1,385
  -1,414
  -1,409
  -1,370
  -1,300
  -1,205
  -1,090
  -963
  -830
  -699
  -573
  -459
  -357
  -271
  -200
  -143
  -100
  -67
Current shareholders' claim on cash, %
  48.7
  24.7
  12.9
  7.0
  3.8
  2.2
  1.2
  0.7
  0.4
  0.3
  0.2
  0.1
  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

Abraxas Petroleum Corporation is an independent energy company. The Company is engaged in the acquisition, exploration, development and production of oil and gas. As of December 31, 2016, the Company's estimated net proved reserves were 44.7 million barrels of oil equivalent (MMBoe), of which 33.6% were classified as proved developed, 74% were oil and natural gas liquids (NGL), and 95% of which (on a PV-10 basis) were operated by the Company. As of December 31, 2016, the Company's daily net production was 6,181 barrels of oil equivalent per day (Boepd), of which 61% was oil or liquids. The Company's oil and gas assets are located in three operating regions: the Rocky Mountain, Permian Basin and onshore Gulf Coast. The Company's properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana, and in the Green River Powder River and Unita Basins of Wyoming and Utah.

FINANCIAL RATIOS  of  Abraxas Petroleum Corporation (AXAS)

Valuation Ratios
P/E Ratio -1.9
Price to Sales 3.2
Price to Book 9.5
Price to Tangible Book
Price to Cash Flow 6.7
Price to Free Cash Flow -35.9
Growth Rates
Sales Growth Rate -14.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -53.6%
Cap. Spend. - 3 Yr. Gr. Rate -19.6%
Financial Strength
Quick Ratio 0
Current Ratio 0.3
LT Debt to Equity 505.3%
Total Debt to Equity 510.5%
Interest Coverage -23
Management Effectiveness
Return On Assets -42.8%
Ret/ On Assets - 3 Yr. Avg. -19.9%
Return On Total Capital -56.3%
Ret/ On T. Cap. - 3 Yr. Avg. -25.3%
Return On Equity -186.4%
Return On Equity - 3 Yr. Avg. -76.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 57.9%
Gross Margin - 3 Yr. Avg. 61.6%
EBITDA Margin -119.3%
EBITDA Margin - 3 Yr. Avg. -55.4%
Operating Margin -128.1%
Oper. Margin - 3 Yr. Avg. -103.4%
Pre-Tax Margin -168.4%
Pre-Tax Margin - 3 Yr. Avg. -103.9%
Net Profit Margin -168.4%
Net Profit Margin - 3 Yr. Avg. -103.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AXAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AXAS stock intrinsic value calculation we used $86 million for the last fiscal year's total revenue generated by Abraxas Petroleum Corporation. The default revenue input number comes from 0001 income statement of Abraxas Petroleum Corporation. 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 AXAS 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 5.6%, whose default value for AXAS is calculated based on our internal credit rating of Abraxas Petroleum Corporation, 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 Abraxas Petroleum Corporation.
    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 AXAS stock the variable cost ratio is equal to 230.2%.

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 AXAS 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 5.4% for Abraxas Petroleum Corporation.

Corporate tax rate of 27% is the nominal tax rate for Abraxas Petroleum Corporation. 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 AXAS 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 AXAS are equal to 217.5%.

Life of production assets of 7 years is the average useful life of capital assets used in Abraxas Petroleum Corporation 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 AXAS is equal to -41.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $106.308 million for Abraxas Petroleum Corporation - 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 166.608 million for Abraxas Petroleum Corporation 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 Abraxas Petroleum Corporation at the current share price and the inputted number of shares is $0.2 billion.

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