Intrinsic value of MIDSTATES PETROLEUM COMPANY, INC. - MPO

Previous Close

$10.18

  Intrinsic Value

$5.35

stock screener

  Rating & Target

sell

-47%

Previous close

$10.18

 
Intrinsic value

$5.35

 
Up/down potential

-47%

 
Rating

sell

We calculate the intrinsic value of MPO 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 0.3

 

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, %
  30.60
  28.04
  25.74
  23.66
  21.80
  20.12
  18.60
  17.24
  16.02
  14.92
  13.93
  13.03
  12.23
  11.51
  10.86
  10.27
  9.74
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.21
Revenue, $m
  273
  349
  439
  543
  662
  795
  943
  1,106
  1,283
  1,474
  1,679
  1,898
  2,130
  2,375
  2,633
  2,904
  3,187
  3,482
  3,790
  4,110
  4,444
  4,791
  5,151
  5,525
  5,914
  6,319
  6,739
  7,177
  7,631
  8,105
Variable operating expenses, $m
  368
  471
  593
  733
  893
  1,072
  1,272
  1,491
  1,730
  1,988
  2,265
  2,561
  2,874
  3,204
  3,552
  3,917
  4,299
  4,697
  5,113
  5,545
  5,995
  6,462
  6,949
  7,454
  7,978
  8,524
  9,091
  9,681
  10,295
  10,934
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
  368
  471
  593
  733
  893
  1,072
  1,272
  1,491
  1,730
  1,988
  2,265
  2,561
  2,874
  3,204
  3,552
  3,917
  4,299
  4,697
  5,113
  5,545
  5,995
  6,462
  6,949
  7,454
  7,978
  8,524
  9,091
  9,681
  10,295
  10,934
Operating income, $m
  -95
  -122
  -153
  -190
  -231
  -277
  -329
  -386
  -448
  -514
  -586
  -662
  -743
  -829
  -919
  -1,013
  -1,112
  -1,215
  -1,323
  -1,435
  -1,551
  -1,672
  -1,798
  -1,928
  -2,064
  -2,205
  -2,352
  -2,505
  -2,663
  -2,829
EBITDA, $m
  -14
  -18
  -23
  -29
  -35
  -42
  -50
  -58
  -67
  -77
  -88
  -100
  -112
  -125
  -138
  -152
  -167
  -183
  -199
  -216
  -233
  -252
  -271
  -290
  -311
  -332
  -354
  -377
  -401
  -426
Interest expense (income), $m
  0
  1
  3
  4
  6
  7
  10
  12
  15
  18
  21
  24
  28
  32
  36
  41
  46
  51
  56
  61
  67
  73
  79
  85
  92
  98
  106
  113
  121
  129
  137
Earnings before tax, $m
  -97
  -125
  -157
  -195
  -238
  -287
  -341
  -401
  -465
  -535
  -611
  -691
  -776
  -865
  -960
  -1,059
  -1,163
  -1,271
  -1,384
  -1,501
  -1,624
  -1,751
  -1,883
  -2,020
  -2,163
  -2,311
  -2,465
  -2,625
  -2,792
  -2,966
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
  -97
  -125
  -157
  -195
  -238
  -287
  -341
  -401
  -465
  -535
  -611
  -691
  -776
  -865
  -960
  -1,059
  -1,163
  -1,271
  -1,384
  -1,501
  -1,624
  -1,751
  -1,883
  -2,020
  -2,163
  -2,311
  -2,465
  -2,625
  -2,792
  -2,966

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
  791
  1,013
  1,274
  1,575
  1,918
  2,304
  2,733
  3,204
  3,718
  4,272
  4,867
  5,502
  6,175
  6,885
  7,633
  8,416
  9,237
  10,093
  10,985
  11,914
  12,881
  13,886
  14,930
  16,015
  17,143
  18,315
  19,534
  20,801
  22,120
  23,493
Adjusted assets (=assets-cash), $m
  791
  1,013
  1,274
  1,575
  1,918
  2,304
  2,733
  3,204
  3,718
  4,272
  4,867
  5,502
  6,175
  6,885
  7,633
  8,416
  9,237
  10,093
  10,985
  11,914
  12,881
  13,886
  14,930
  16,015
  17,143
  18,315
  19,534
  20,801
  22,120
  23,493
Revenue / Adjusted assets
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
Average production assets, $m
  736
  943
  1,186
  1,466
  1,786
  2,145
  2,544
  2,983
  3,460
  3,977
  4,531
  5,121
  5,747
  6,409
  7,104
  7,834
  8,597
  9,394
  10,225
  11,090
  11,990
  12,925
  13,897
  14,907
  15,957
  17,048
  18,182
  19,362
  20,590
  21,868
Working capital, $m
  3
  4
  5
  7
  8
  10
  11
  13
  15
  18
  20
  23
  26
  29
  32
  35
  38
  42
  45
  49
  53
  57
  62
  66
  71
  76
  81
  86
  92
  97
Total debt, $m
  42
  66
  93
  125
  161
  201
  246
  296
  350
  408
  470
  537
  608
  682
  761
  843
  929
  1,019
  1,113
  1,210
  1,312
  1,417
  1,527
  1,641
  1,759
  1,882
  2,010
  2,143
  2,282
  2,426
Total liabilities, $m
  83
  106
  134
  165
  201
  242
  287
  336
  390
  449
  511
  578
  648
  723
  801
  884
  970
  1,060
  1,153
  1,251
  1,352
  1,458
  1,568
  1,682
  1,800
  1,923
  2,051
  2,184
  2,323
  2,467
Total equity, $m
  708
  907
  1,140
  1,410
  1,717
  2,062
  2,446
  2,868
  3,327
  3,824
  4,356
  4,924
  5,526
  6,162
  6,831
  7,533
  8,267
  9,033
  9,832
  10,663
  11,528
  12,428
  13,362
  14,334
  15,343
  16,392
  17,483
  18,617
  19,798
  21,026
Total liabilities and equity, $m
  791
  1,013
  1,274
  1,575
  1,918
  2,304
  2,733
  3,204
  3,717
  4,273
  4,867
  5,502
  6,174
  6,885
  7,632
  8,417
  9,237
  10,093
  10,985
  11,914
  12,880
  13,886
  14,930
  16,016
  17,143
  18,315
  19,534
  20,801
  22,121
  23,493
Debt-to-equity ratio
  0.060
  0.070
  0.080
  0.090
  0.090
  0.100
  0.100
  0.100
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.120
  0.120
  0.120
Adjusted equity ratio
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895
  0.895

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -97
  -125
  -157
  -195
  -238
  -287
  -341
  -401
  -465
  -535
  -611
  -691
  -776
  -865
  -960
  -1,059
  -1,163
  -1,271
  -1,384
  -1,501
  -1,624
  -1,751
  -1,883
  -2,020
  -2,163
  -2,311
  -2,465
  -2,625
  -2,792
  -2,966
Depreciation, amort., depletion, $m
  81
  104
  130
  161
  196
  236
  280
  328
  380
  437
  498
  563
  632
  704
  781
  861
  945
  1,032
  1,124
  1,219
  1,318
  1,420
  1,527
  1,638
  1,754
  1,873
  1,998
  2,128
  2,263
  2,403
Funds from operations, $m
  -16
  -21
  -27
  -34
  -42
  -51
  -62
  -73
  -85
  -98
  -113
  -128
  -144
  -161
  -179
  -198
  -218
  -239
  -260
  -283
  -306
  -330
  -356
  -382
  -409
  -437
  -467
  -498
  -529
  -563
Change in working capital, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
Cash from operations, $m
  -16
  -22
  -28
  -35
  -44
  -53
  -63
  -75
  -87
  -101
  -115
  -131
  -147
  -164
  -182
  -201
  -221
  -242
  -264
  -286
  -310
  -334
  -360
  -386
  -414
  -442
  -472
  -503
  -535
  -568
Maintenance CAPEX, $m
  -62
  -81
  -104
  -130
  -161
  -196
  -236
  -280
  -328
  -380
  -437
  -498
  -563
  -632
  -704
  -781
  -861
  -945
  -1,032
  -1,124
  -1,219
  -1,318
  -1,420
  -1,527
  -1,638
  -1,754
  -1,873
  -1,998
  -2,128
  -2,263
New CAPEX, $m
  -172
  -206
  -243
  -281
  -320
  -359
  -399
  -439
  -478
  -516
  -554
  -590
  -626
  -661
  -696
  -730
  -763
  -797
  -831
  -865
  -900
  -935
  -972
  -1,010
  -1,050
  -1,091
  -1,134
  -1,180
  -1,228
  -1,278
Cash from investing activities, $m
  -234
  -287
  -347
  -411
  -481
  -555
  -635
  -719
  -806
  -896
  -991
  -1,088
  -1,189
  -1,293
  -1,400
  -1,511
  -1,624
  -1,742
  -1,863
  -1,989
  -2,119
  -2,253
  -2,392
  -2,537
  -2,688
  -2,845
  -3,007
  -3,178
  -3,356
  -3,541
Free cash flow, $m
  -251
  -309
  -374
  -446
  -524
  -608
  -698
  -793
  -893
  -997
  -1,106
  -1,219
  -1,336
  -1,457
  -1,582
  -1,712
  -1,846
  -1,984
  -2,127
  -2,275
  -2,428
  -2,587
  -2,752
  -2,924
  -3,102
  -3,287
  -3,480
  -3,681
  -3,890
  -4,109
Issuance/(repayment) of debt, $m
  19
  23
  27
  32
  36
  41
  45
  49
  54
  58
  62
  67
  71
  75
  78
  82
  86
  90
  94
  98
  101
  106
  110
  114
  118
  123
  128
  133
  138
  144
Issuance/(repurchase) of shares, $m
  263
  323
  391
  465
  546
  632
  725
  822
  925
  1,032
  1,143
  1,258
  1,378
  1,501
  1,629
  1,761
  1,897
  2,037
  2,183
  2,333
  2,489
  2,650
  2,817
  2,991
  3,172
  3,360
  3,556
  3,760
  3,972
  4,194
Cash from financing (excl. dividends), $m  
  282
  346
  418
  497
  582
  673
  770
  871
  979
  1,090
  1,205
  1,325
  1,449
  1,576
  1,707
  1,843
  1,983
  2,127
  2,277
  2,431
  2,590
  2,756
  2,927
  3,105
  3,290
  3,483
  3,684
  3,893
  4,110
  4,338
Total cash flow (excl. dividends), $m
  31
  37
  44
  50
  57
  65
  72
  79
  86
  93
  100
  106
  113
  119
  125
  131
  137
  143
  149
  155
  162
  168
  175
  182
  189
  196
  204
  212
  221
  230
Retained Cash Flow (-), $m
  -263
  -323
  -391
  -465
  -546
  -632
  -725
  -822
  -925
  -1,032
  -1,143
  -1,258
  -1,378
  -1,501
  -1,629
  -1,761
  -1,897
  -2,037
  -2,183
  -2,333
  -2,489
  -2,650
  -2,817
  -2,991
  -3,172
  -3,360
  -3,556
  -3,760
  -3,972
  -4,194
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
  -232
  -286
  -347
  -415
  -488
  -568
  -653
  -744
  -839
  -939
  -1,043
  -1,152
  -1,265
  -1,382
  -1,504
  -1,629
  -1,759
  -1,894
  -2,033
  -2,177
  -2,327
  -2,482
  -2,643
  -2,810
  -2,983
  -3,164
  -3,352
  -3,548
  -3,752
  -3,964
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
  -222
  -262
  -302
  -341
  -378
  -412
  -441
  -465
  -482
  -492
  -496
  -492
  -481
  -464
  -442
  -414
  -383
  -349
  -313
  -277
  -241
  -206
  -173
  -143
  -116
  -92
  -72
  -55
  -41
  -30
Current shareholders' claim on cash, %
  59.0
  35.7
  22.1
  14.0
  9.0
  5.9
  3.9
  2.7
  1.8
  1.3
  0.9
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Midstates Petroleum Company, Inc. engages in the exploration, development, and production of oil, natural gas liquids, and natural gas in the United States. As of December 31, 2015, its Mississippian Lime assets consisted of approximately 69,680 net acres in the Mississippian Lime trend in Woods and Alfalfa counties of Oklahoma, as well as approximately 12,164 net acres in Lincoln County, Oklahoma; and Anadarko Basin assets consisted of approximately 111,190 net acres in the Anadarko Basin located in Texas and western Oklahoma. The company was founded in 1993 and is headquartered in Tulsa, Oklahoma.

FINANCIAL RATIOS  of  MIDSTATES PETROLEUM COMPANY, INC. (MPO)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MPO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MPO stock intrinsic value calculation we used $209 million for the last fiscal year's total revenue generated by MIDSTATES PETROLEUM COMPANY, INC.. The default revenue input number comes from 0001 income statement of MIDSTATES PETROLEUM COMPANY, INC.. 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 MPO stock valuation model: a) initial revenue growth rate of 30.6% 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 MPO is calculated based on our internal credit rating of MIDSTATES PETROLEUM COMPANY, INC., 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 MIDSTATES PETROLEUM COMPANY, INC..
    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 MPO stock the variable cost ratio is equal to 134.9%.

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 MPO 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% for MIDSTATES PETROLEUM COMPANY, INC..

Corporate tax rate of 27% is the nominal tax rate for MIDSTATES PETROLEUM COMPANY, INC.. 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 MPO 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 MPO are equal to 269.8%.

Life of production assets of 9.1 years is the average useful life of capital assets used in MIDSTATES PETROLEUM COMPANY, INC. 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 MPO is equal to 1.2%. 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 - $541.677 million for MIDSTATES PETROLEUM COMPANY, INC. - 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 25.302 million for MIDSTATES PETROLEUM COMPANY, INC. 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 MIDSTATES PETROLEUM COMPANY, INC. at the current share price and the inputted number of shares is $0.3 billion.

CONTACT US       ASSET ALLOCATION

About X-FIN       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2019. All rigths reserved.