Intrinsic value of CNOOC Limited - CEO

Previous Close

$167.94

  Intrinsic Value

$30,680

stock screener

  Rating & Target

str. buy

+999%

Previous close

$167.94

 
Intrinsic value

$30,680

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CEO 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 1.7

 

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, %
  33.60
  30.74
  28.17
  25.85
  23.76
  21.89
  20.20
  18.68
  17.31
  16.08
  14.97
  13.97
  13.08
  12.27
  11.54
  10.89
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
Revenue, $m
  37,639
  49,209
  63,070
  79,373
  98,235
  119,737
  143,923
  170,807
  200,376
  232,597
  267,422
  304,794
  344,653
  386,941
  431,605
  478,600
  527,894
  579,468
  633,316
  689,450
  747,895
  808,694
  871,905
  937,602
  1,005,872
  1,076,818
  1,150,557
  1,227,219
  1,306,949
  1,389,902
Variable operating expenses, $m
  7,564
  9,819
  12,521
  15,699
  19,375
  23,566
  28,280
  33,521
  39,284
  45,564
  52,124
  59,409
  67,178
  75,420
  84,126
  93,286
  102,894
  112,947
  123,442
  134,384
  145,775
  157,626
  169,947
  182,752
  196,059
  209,887
  224,260
  239,202
  254,743
  270,912
Fixed operating expenses, $m
  17,915
  18,309
  18,712
  19,123
  19,544
  19,974
  20,413
  20,862
  21,321
  21,790
  22,270
  22,760
  23,260
  23,772
  24,295
  24,830
  25,376
  25,934
  26,505
  27,088
  27,684
  28,293
  28,915
  29,551
  30,202
  30,866
  31,545
  32,239
  32,948
  33,673
Total operating expenses, $m
  25,479
  28,128
  31,233
  34,822
  38,919
  43,540
  48,693
  54,383
  60,605
  67,354
  74,394
  82,169
  90,438
  99,192
  108,421
  118,116
  128,270
  138,881
  149,947
  161,472
  173,459
  185,919
  198,862
  212,303
  226,261
  240,753
  255,805
  271,441
  287,691
  304,585
Operating income, $m
  12,160
  21,081
  31,837
  44,551
  59,316
  76,197
  95,229
  116,424
  139,771
  165,242
  193,028
  222,625
  254,215
  287,749
  323,184
  360,485
  399,624
  440,587
  483,369
  527,978
  574,436
  622,775
  673,043
  725,298
  779,611
  836,064
  894,752
  955,778
  1,019,258
  1,085,317
EBITDA, $m
  29,017
  43,050
  59,929
  79,846
  102,944
  129,325
  159,042
  192,114
  228,525
  268,231
  311,175
  357,283
  406,483
  458,699
  513,867
  571,930
  632,848
  696,596
  763,168
  832,577
  904,856
  980,057
  1,058,251
  1,139,531
  1,224,005
  1,311,802
  1,403,068
  1,497,963
  1,596,668
  1,699,376
Interest expense (income), $m
  738
  1,079
  1,694
  2,444
  3,341
  4,397
  5,619
  7,011
  8,578
  10,319
  12,234
  14,321
  16,577
  18,997
  21,579
  24,318
  27,210
  30,254
  33,447
  36,787
  40,275
  43,910
  47,696
  51,633
  55,727
  59,982
  64,404
  68,999
  73,775
  78,740
  83,904
Earnings before tax, $m
  11,081
  19,387
  29,394
  41,210
  54,919
  70,578
  88,218
  107,846
  129,452
  153,008
  178,706
  206,049
  235,218
  266,170
  298,866
  333,274
  369,370
  407,140
  446,582
  487,704
  530,526
  575,080
  621,410
  669,571
  719,629
  771,660
  825,753
  882,003
  940,517
  1,001,413
Tax expense, $m
  2,992
  5,234
  7,936
  11,127
  14,828
  19,056
  23,819
  29,118
  34,952
  41,312
  48,251
  55,633
  63,509
  71,866
  80,694
  89,984
  99,730
  109,928
  120,577
  131,680
  143,242
  155,272
  167,781
  180,784
  194,300
  208,348
  222,953
  238,141
  253,940
  270,382
Net income, $m
  8,089
  14,153
  21,457
  30,083
  40,091
  51,522
  64,399
  78,728
  94,500
  111,696
  130,456
  150,416
  171,709
  194,304
  218,172
  243,290
  269,640
  297,212
  326,005
  356,024
  387,284
  419,808
  453,629
  488,787
  525,329
  563,312
  602,799
  643,862
  686,578
  731,032

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
  113,713
  148,669
  190,543
  239,797
  296,784
  361,744
  434,813
  516,033
  605,365
  702,710
  807,921
  920,827
  1,041,249
  1,169,007
  1,303,943
  1,445,922
  1,594,847
  1,750,658
  1,913,342
  2,082,930
  2,259,502
  2,443,185
  2,634,155
  2,832,634
  3,038,887
  3,253,225
  3,476,002
  3,707,611
  3,948,486
  4,199,100
Adjusted assets (=assets-cash), $m
  113,713
  148,669
  190,543
  239,797
  296,784
  361,744
  434,813
  516,033
  605,365
  702,710
  807,921
  920,827
  1,041,249
  1,169,007
  1,303,943
  1,445,922
  1,594,847
  1,750,658
  1,913,342
  2,082,930
  2,259,502
  2,443,185
  2,634,155
  2,832,634
  3,038,887
  3,253,225
  3,476,002
  3,707,611
  3,948,486
  4,199,100
Revenue / Adjusted assets
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
Average production assets, $m
  83,145
  108,704
  139,321
  175,335
  217,002
  264,499
  317,926
  377,313
  442,630
  513,806
  590,735
  673,290
  761,339
  854,753
  953,415
  1,057,228
  1,166,119
  1,280,045
  1,398,995
  1,522,995
  1,652,100
  1,786,406
  1,926,039
  2,071,162
  2,221,970
  2,378,690
  2,541,580
  2,710,927
  2,887,050
  3,070,294
Working capital, $m
  -2,221
  -2,903
  -3,721
  -4,683
  -5,796
  -7,064
  -8,491
  -10,078
  -11,822
  -13,723
  -15,778
  -17,983
  -20,335
  -22,830
  -25,465
  -28,237
  -31,146
  -34,189
  -37,366
  -40,678
  -44,126
  -47,713
  -51,442
  -55,319
  -59,346
  -63,532
  -67,883
  -72,406
  -77,110
  -82,004
Total debt, $m
  31,374
  45,252
  61,876
  81,430
  104,053
  129,842
  158,851
  191,095
  226,560
  265,206
  306,975
  351,799
  399,606
  450,326
  503,895
  560,261
  619,384
  681,241
  745,827
  813,153
  883,252
  956,175
  1,031,990
  1,110,786
  1,192,668
  1,277,760
  1,366,203
  1,458,152
  1,553,779
  1,653,273
Total liabilities, $m
  45,144
  59,022
  75,646
  95,199
  117,823
  143,612
  172,621
  204,865
  240,330
  278,976
  320,745
  365,568
  413,376
  464,096
  517,665
  574,031
  633,154
  695,011
  759,597
  826,923
  897,022
  969,945
  1,045,760
  1,124,556
  1,206,438
  1,291,530
  1,379,973
  1,471,921
  1,567,549
  1,667,043
Total equity, $m
  68,569
  89,647
  114,897
  144,598
  178,961
  218,131
  262,192
  311,168
  365,035
  423,734
  487,176
  555,259
  627,873
  704,911
  786,277
  871,891
  961,693
  1,055,647
  1,153,745
  1,256,007
  1,362,479
  1,473,241
  1,588,396
  1,708,078
  1,832,449
  1,961,695
  2,096,029
  2,235,689
  2,380,937
  2,532,057
Total liabilities and equity, $m
  113,713
  148,669
  190,543
  239,797
  296,784
  361,743
  434,813
  516,033
  605,365
  702,710
  807,921
  920,827
  1,041,249
  1,169,007
  1,303,942
  1,445,922
  1,594,847
  1,750,658
  1,913,342
  2,082,930
  2,259,501
  2,443,186
  2,634,156
  2,832,634
  3,038,887
  3,253,225
  3,476,002
  3,707,610
  3,948,486
  4,199,100
Debt-to-equity ratio
  0.460
  0.500
  0.540
  0.560
  0.580
  0.600
  0.610
  0.610
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.640
  0.640
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
Adjusted equity ratio
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,089
  14,153
  21,457
  30,083
  40,091
  51,522
  64,399
  78,728
  94,500
  111,696
  130,456
  150,416
  171,709
  194,304
  218,172
  243,290
  269,640
  297,212
  326,005
  356,024
  387,284
  419,808
  453,629
  488,787
  525,329
  563,312
  602,799
  643,862
  686,578
  731,032
Depreciation, amort., depletion, $m
  16,857
  21,969
  28,092
  35,295
  43,628
  53,128
  63,813
  75,690
  88,754
  102,989
  118,147
  134,658
  152,268
  170,951
  190,683
  211,446
  233,224
  256,009
  279,799
  304,599
  330,420
  357,281
  385,208
  414,232
  444,394
  475,738
  508,316
  542,185
  577,410
  614,059
Funds from operations, $m
  24,946
  36,121
  49,549
  65,378
  83,719
  104,650
  128,212
  154,418
  183,254
  214,685
  248,603
  285,074
  323,977
  365,255
  408,855
  454,736
  502,864
  553,221
  605,804
  660,623
  717,704
  777,089
  838,837
  903,019
  969,723
  1,039,050
  1,111,115
  1,186,047
  1,263,988
  1,345,090
Change in working capital, $m
  -559
  -683
  -818
  -962
  -1,113
  -1,269
  -1,427
  -1,586
  -1,745
  -1,901
  -2,055
  -2,205
  -2,352
  -2,495
  -2,635
  -2,773
  -2,908
  -3,043
  -3,177
  -3,312
  -3,448
  -3,587
  -3,729
  -3,876
  -4,028
  -4,186
  -4,351
  -4,523
  -4,704
  -4,894
Cash from operations, $m
  25,504
  36,804
  50,367
  66,340
  84,832
  105,918
  129,639
  156,004
  184,998
  216,586
  250,657
  287,279
  326,329
  367,750
  411,491
  457,508
  505,772
  556,264
  608,981
  663,934
  721,152
  780,677
  842,567
  906,895
  973,751
  1,043,236
  1,115,466
  1,190,570
  1,268,692
  1,349,985
Maintenance CAPEX, $m
  -12,444
  -16,629
  -21,741
  -27,864
  -35,067
  -43,400
  -52,900
  -63,585
  -75,463
  -88,526
  -102,761
  -118,147
  -134,658
  -152,268
  -170,951
  -190,683
  -211,446
  -233,224
  -256,009
  -279,799
  -304,599
  -330,420
  -357,281
  -385,208
  -414,232
  -444,394
  -475,738
  -508,316
  -542,185
  -577,410
New CAPEX, $m
  -20,924
  -25,559
  -30,617
  -36,014
  -41,667
  -47,497
  -53,427
  -59,386
  -65,318
  -71,176
  -76,928
  -82,555
  -88,049
  -93,414
  -98,662
  -103,813
  -108,891
  -113,926
  -118,951
  -123,999
  -129,106
  -134,306
  -139,633
  -145,123
  -150,808
  -156,720
  -162,890
  -169,348
  -176,123
  -183,244
Cash from investing activities, $m
  -33,368
  -42,188
  -52,358
  -63,878
  -76,734
  -90,897
  -106,327
  -122,971
  -140,781
  -159,702
  -179,689
  -200,702
  -222,707
  -245,682
  -269,613
  -294,496
  -320,337
  -347,150
  -374,960
  -403,798
  -433,705
  -464,726
  -496,914
  -530,331
  -565,040
  -601,114
  -638,628
  -677,664
  -718,308
  -760,654
Free cash flow, $m
  -7,864
  -5,384
  -1,991
  2,462
  8,098
  15,021
  23,312
  33,033
  44,218
  56,884
  70,968
  86,577
  103,621
  122,068
  141,878
  163,013
  185,436
  209,115
  234,021
  260,136
  287,447
  315,951
  345,652
  376,564
  408,711
  442,122
  476,838
  512,907
  550,383
  589,331
Issuance/(repayment) of debt, $m
  11,385
  13,877
  16,624
  19,554
  22,624
  25,789
  29,009
  32,244
  35,465
  38,646
  41,769
  44,824
  47,807
  50,720
  53,569
  56,366
  59,123
  61,857
  64,585
  67,326
  70,099
  72,922
  75,815
  78,796
  81,882
  85,092
  88,442
  91,949
  95,627
  99,494
Issuance/(repurchase) of shares, $m
  9,229
  6,926
  3,793
  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 from financing (excl. dividends), $m  
  20,614
  20,803
  20,417
  19,554
  22,624
  25,789
  29,009
  32,244
  35,465
  38,646
  41,769
  44,824
  47,807
  50,720
  53,569
  56,366
  59,123
  61,857
  64,585
  67,326
  70,099
  72,922
  75,815
  78,796
  81,882
  85,092
  88,442
  91,949
  95,627
  99,494
Total cash flow (excl. dividends), $m
  12,750
  15,419
  18,426
  22,016
  30,721
  40,810
  52,321
  65,277
  79,683
  95,529
  112,737
  131,401
  151,428
  172,788
  195,447
  219,379
  244,559
  270,972
  298,607
  327,463
  357,546
  388,873
  421,467
  455,360
  490,593
  527,214
  565,281
  604,856
  646,011
  688,825
Retained Cash Flow (-), $m
  -17,318
  -21,078
  -25,250
  -29,700
  -34,363
  -39,171
  -44,061
  -48,976
  -53,867
  -58,699
  -63,442
  -68,083
  -72,614
  -77,038
  -81,366
  -85,614
  -89,802
  -93,954
  -98,098
  -102,261
  -106,473
  -110,761
  -115,155
  -119,682
  -124,371
  -129,246
  -134,334
  -139,660
  -145,248
  -151,120
Prev. year cash balance distribution, $m
  6,182
  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
  1,614
  -5,659
  -6,824
  -7,685
  -3,642
  1,639
  8,260
  16,301
  25,815
  36,831
  49,294
  63,318
  78,814
  95,749
  114,081
  133,765
  154,758
  177,017
  200,508
  225,201
  251,074
  278,112
  306,312
  335,678
  366,222
  397,968
  430,946
  465,196
  500,763
  537,704
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,547
  -5,181
  -5,939
  -6,327
  -2,823
  1,189
  5,580
  10,189
  14,829
  19,309
  23,409
  27,020
  29,967
  32,145
  33,492
  33,993
  33,673
  32,599
  30,873
  28,616
  25,969
  23,076
  20,076
  17,097
  14,247
  11,611
  9,249
  7,197
  5,466
  4,049
Current shareholders' claim on cash, %
  79.5
  69.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5

CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The Company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The Corporate segment is engaged in corporate-related businesses. The Company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.

FINANCIAL RATIOS  of  CNOOC Limited (CEO)

Valuation Ratios
P/E Ratio 81501
Price to Sales 353.8
Price to Book 135.5
Price to Tangible Book
Price to Cash Flow 711.3
Price to Free Cash Flow 2408.6
Growth Rates
Sales Growth Rate -14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.1%
Cap. Spend. - 3 Yr. Gr. Rate -10%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 34.2%
Total Debt to Equity 39.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital 0.1%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 0.2%
Return On Equity - 3 Yr. Avg. 7.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 71.2%
Gross Margin - 3 Yr. Avg. 69.1%
EBITDA Margin 46.9%
EBITDA Margin - 3 Yr. Avg. 51.9%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. 12.7%
Pre-Tax Margin -3.6%
Pre-Tax Margin - 3 Yr. Avg. 12.1%
Net Profit Margin 0.4%
Net Profit Margin - 3 Yr. Avg. 11.4%
Effective Tax Rate 112.1%
Eff/ Tax Rate - 3 Yr. Avg. 40.3%
Payout Ratio 2226.1%

CEO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CEO stock intrinsic value calculation we used $28173 million for the last fiscal year's total revenue generated by CNOOC Limited. The default revenue input number comes from 0001 income statement of CNOOC Limited. 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 CEO stock valuation model: a) initial revenue growth rate of 33.6% 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 4.3%, whose default value for CEO is calculated based on our internal credit rating of CNOOC Limited, 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 CNOOC Limited.
    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 CEO stock the variable cost ratio is equal to 20.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17529 million in the base year in the intrinsic value calculation for CEO 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 CNOOC Limited.

Corporate tax rate of 27% is the nominal tax rate for CNOOC Limited. 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 CEO 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 CEO are equal to 220.9%.

Life of production assets of 0 years is the average useful life of capital assets used in CNOOC Limited 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 CEO is equal to -5.9%. 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 - $57432.738815 million for CNOOC Limited - 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 10.362 million for CNOOC Limited 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 CNOOC Limited at the current share price and the inputted number of shares is $1.7 billion.

RELATED COMPANIES Price Int.Val. Rating
BP BP p.l.c. 39.23 211.92  str.buy
XOM Exxon Mobil Co 74.99 74.13  hold

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