Intrinsic value of Extraction Oil&Gas - XOG

Previous Close

$7.06

  Intrinsic Value

$2.22

stock screener

  Rating & Target

str. sell

-68%

Previous close

$7.06

 
Intrinsic value

$2.22

 
Up/down potential

-68%

 
Rating

str. sell

We calculate the intrinsic value of XOG 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 1.2

 

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
  967
  1,494
  2,234
  3,241
  4,573
  6,287
  8,439
  11,081
  14,259
  18,010
  22,364
  27,342
  32,957
  39,212
  46,106
  53,633
  61,780
  70,536
  79,886
  89,815
  100,312
  111,364
  122,964
  135,106
  147,789
  161,014
  174,786
  189,116
  204,015
  219,501
Variable operating expenses, $m
  410
  630
  939
  1,360
  1,916
  2,632
  3,532
  4,635
  5,963
  7,530
  9,344
  11,424
  13,770
  16,384
  19,264
  22,409
  25,813
  29,472
  33,378
  37,527
  41,913
  46,531
  51,377
  56,451
  61,750
  67,275
  73,030
  79,017
  85,242
  91,713
Fixed operating expenses, $m
  496
  507
  518
  529
  541
  553
  565
  577
  590
  603
  616
  630
  644
  658
  672
  687
  702
  718
  733
  749
  766
  783
  800
  818
  836
  854
  873
  892
  912
  932
Total operating expenses, $m
  906
  1,137
  1,457
  1,889
  2,457
  3,185
  4,097
  5,212
  6,553
  8,133
  9,960
  12,054
  14,414
  17,042
  19,936
  23,096
  26,515
  30,190
  34,111
  38,276
  42,679
  47,314
  52,177
  57,269
  62,586
  68,129
  73,903
  79,909
  86,154
  92,645
Operating income, $m
  62
  358
  777
  1,352
  2,116
  3,102
  4,343
  5,868
  7,706
  9,876
  12,404
  15,288
  18,543
  22,171
  26,170
  30,537
  35,265
  40,347
  45,774
  51,539
  57,633
  64,051
  70,787
  77,838
  85,204
  92,885
  100,884
  109,207
  117,861
  126,857
EBITDA, $m
  567
  1,135
  1,937
  3,032
  4,483
  6,354
  8,706
  11,597
  15,075
  19,183
  23,953
  29,409
  35,563
  42,421
  49,980
  58,234
  67,170
  76,774
  87,030
  97,922
  109,437
  121,563
  134,289
  147,611
  161,526
  176,037
  191,148
  206,872
  223,220
  240,213
Interest expense (income), $m
  31
  68
  138
  240
  383
  578
  836
  1,168
  1,584
  2,096
  2,711
  3,437
  4,279
  5,243
  6,330
  7,540
  8,875
  10,331
  11,908
  13,603
  15,413
  17,335
  19,366
  21,505
  23,751
  26,101
  28,556
  31,115
  33,781
  36,554
  39,438
Earnings before tax, $m
  -6
  220
  537
  969
  1,538
  2,266
  3,175
  4,284
  5,610
  7,166
  8,967
  11,009
  13,300
  15,841
  18,629
  21,662
  24,933
  28,438
  32,171
  36,126
  40,299
  44,685
  49,281
  54,088
  59,103
  64,329
  69,769
  75,426
  81,307
  87,419
Tax expense, $m
  0
  59
  145
  262
  415
  612
  857
  1,157
  1,515
  1,935
  2,421
  2,972
  3,591
  4,277
  5,030
  5,849
  6,732
  7,678
  8,686
  9,754
  10,881
  12,065
  13,306
  14,604
  15,958
  17,369
  18,838
  20,365
  21,953
  23,603
Net income, $m
  -6
  160
  392
  707
  1,123
  1,654
  2,318
  3,127
  4,095
  5,231
  6,546
  8,036
  9,709
  11,564
  13,599
  15,813
  18,201
  20,760
  23,485
  26,372
  29,418
  32,620
  35,975
  39,484
  43,145
  46,960
  50,931
  55,061
  59,354
  63,816

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
  5,432
  8,392
  12,551
  18,210
  25,692
  35,321
  47,411
  62,253
  80,105
  101,179
  125,641
  153,608
  185,150
  220,292
  259,024
  301,307
  347,081
  396,270
  448,797
  504,581
  563,550
  625,642
  690,810
  759,025
  830,276
  904,573
  981,946
  1,062,448
  1,146,152
  1,233,152
Adjusted assets (=assets-cash), $m
  5,432
  8,392
  12,551
  18,210
  25,692
  35,321
  47,411
  62,253
  80,105
  101,179
  125,641
  153,608
  185,150
  220,292
  259,024
  301,307
  347,081
  396,270
  448,797
  504,581
  563,550
  625,642
  690,810
  759,025
  830,276
  904,573
  981,946
  1,062,448
  1,146,152
  1,233,152
Revenue / Adjusted assets
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
  0.178
Average production assets, $m
  4,194
  6,480
  9,691
  14,061
  19,839
  27,273
  36,609
  48,070
  61,854
  78,127
  97,016
  118,611
  142,966
  170,101
  200,009
  232,659
  268,003
  305,986
  346,545
  389,619
  435,153
  483,098
  533,419
  586,092
  641,109
  698,478
  758,223
  820,384
  885,018
  952,196
Working capital, $m
  -390
  -602
  -900
  -1,306
  -1,843
  -2,534
  -3,401
  -4,466
  -5,746
  -7,258
  -9,013
  -11,019
  -13,282
  -15,802
  -18,581
  -21,614
  -24,897
  -28,426
  -32,194
  -36,196
  -40,426
  -44,880
  -49,555
  -54,448
  -59,559
  -64,889
  -70,439
  -76,214
  -82,218
  -88,459
Total debt, $m
  2,091
  3,636
  5,807
  8,761
  12,667
  17,693
  24,004
  31,752
  41,070
  52,071
  64,840
  79,439
  95,904
  114,248
  134,466
  156,538
  180,431
  206,109
  233,527
  262,647
  293,428
  325,841
  359,858
  395,467
  432,660
  471,442
  511,831
  553,854
  597,547
  642,961
Total liabilities, $m
  2,835
  4,381
  6,551
  9,506
  13,411
  18,437
  24,748
  32,496
  41,815
  52,815
  65,585
  80,184
  96,648
  114,992
  135,211
  157,282
  181,176
  206,853
  234,272
  263,391
  294,173
  326,585
  360,603
  396,211
  433,404
  472,187
  512,576
  554,598
  598,292
  643,705
Total equity, $m
  2,596
  4,011
  5,999
  8,705
  12,281
  16,883
  22,662
  29,757
  38,290
  48,364
  60,057
  73,425
  88,502
  105,299
  123,813
  144,025
  165,904
  189,417
  214,525
  241,190
  269,377
  299,057
  330,207
  362,814
  396,872
  432,386
  469,370
  507,850
  547,861
  589,447
Total liabilities and equity, $m
  5,431
  8,392
  12,550
  18,211
  25,692
  35,320
  47,410
  62,253
  80,105
  101,179
  125,642
  153,609
  185,150
  220,291
  259,024
  301,307
  347,080
  396,270
  448,797
  504,581
  563,550
  625,642
  690,810
  759,025
  830,276
  904,573
  981,946
  1,062,448
  1,146,153
  1,233,152
Debt-to-equity ratio
  0.810
  0.910
  0.970
  1.010
  1.030
  1.050
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
Adjusted equity ratio
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6
  160
  392
  707
  1,123
  1,654
  2,318
  3,127
  4,095
  5,231
  6,546
  8,036
  9,709
  11,564
  13,599
  15,813
  18,201
  20,760
  23,485
  26,372
  29,418
  32,620
  35,975
  39,484
  43,145
  46,960
  50,931
  55,061
  59,354
  63,816
Depreciation, amort., depletion, $m
  505
  777
  1,159
  1,680
  2,367
  3,252
  4,364
  5,728
  7,369
  9,306
  11,549
  14,120
  17,020
  20,250
  23,811
  27,697
  31,905
  36,427
  41,255
  46,383
  51,804
  57,512
  63,502
  69,773
  76,323
  83,152
  90,265
  97,665
  105,359
  113,357
Funds from operations, $m
  499
  937
  1,552
  2,387
  3,490
  4,907
  6,681
  8,856
  11,464
  14,537
  18,095
  22,157
  26,729
  31,814
  37,410
  43,511
  50,107
  57,187
  64,740
  72,755
  81,222
  90,131
  99,478
  109,257
  119,468
  130,112
  141,196
  152,726
  164,713
  177,172
Change in working capital, $m
  -146
  -212
  -298
  -406
  -537
  -691
  -867
  -1,065
  -1,281
  -1,512
  -1,755
  -2,006
  -2,263
  -2,521
  -2,778
  -3,033
  -3,284
  -3,529
  -3,768
  -4,002
  -4,230
  -4,454
  -4,675
  -4,893
  -5,111
  -5,330
  -5,550
  -5,775
  -6,004
  -6,241
Cash from operations, $m
  645
  1,150
  1,850
  2,793
  4,027
  5,597
  7,549
  9,920
  12,745
  16,049
  19,850
  24,163
  28,991
  34,335
  40,188
  46,544
  53,390
  60,716
  68,508
  76,757
  85,452
  94,586
  104,152
  114,150
  124,579
  135,442
  146,746
  158,500
  170,718
  183,413
Maintenance CAPEX, $m
  -312
  -499
  -771
  -1,154
  -1,674
  -2,362
  -3,247
  -4,358
  -5,723
  -7,364
  -9,301
  -11,549
  -14,120
  -17,020
  -20,250
  -23,811
  -27,697
  -31,905
  -36,427
  -41,255
  -46,383
  -51,804
  -57,512
  -63,502
  -69,773
  -76,323
  -83,152
  -90,265
  -97,665
  -105,359
New CAPEX, $m
  -1,574
  -2,286
  -3,211
  -4,370
  -5,777
  -7,435
  -9,335
  -11,461
  -13,784
  -16,273
  -18,889
  -21,595
  -24,355
  -27,135
  -29,908
  -32,649
  -35,345
  -37,983
  -40,559
  -43,074
  -45,534
  -47,945
  -50,321
  -52,673
  -55,017
  -57,369
  -59,745
  -62,161
  -64,633
  -67,178
Cash from investing activities, $m
  -1,886
  -2,785
  -3,982
  -5,524
  -7,451
  -9,797
  -12,582
  -15,819
  -19,507
  -23,637
  -28,190
  -33,144
  -38,475
  -44,155
  -50,158
  -56,460
  -63,042
  -69,888
  -76,986
  -84,329
  -91,917
  -99,749
  -107,833
  -116,175
  -124,790
  -133,692
  -142,897
  -152,426
  -162,298
  -172,537
Free cash flow, $m
  -1,241
  -1,636
  -2,133
  -2,731
  -3,425
  -4,199
  -5,034
  -5,899
  -6,762
  -7,587
  -8,340
  -8,982
  -9,484
  -9,820
  -9,969
  -9,916
  -9,652
  -9,172
  -8,478
  -7,573
  -6,465
  -5,164
  -3,680
  -2,025
  -211
  1,750
  3,849
  6,075
  8,420
  10,876
Issuance/(repayment) of debt, $m
  1,068
  1,545
  2,171
  2,954
  3,905
  5,026
  6,311
  7,748
  9,319
  11,001
  12,769
  14,599
  16,465
  18,344
  20,218
  22,072
  23,894
  25,677
  27,419
  29,119
  30,782
  32,412
  34,018
  35,608
  37,193
  38,783
  40,389
  42,022
  43,694
  45,414
Issuance/(repurchase) of shares, $m
  986
  1,255
  1,595
  1,998
  2,454
  2,948
  3,461
  3,967
  4,438
  4,842
  5,147
  5,332
  5,368
  5,234
  4,915
  4,398
  3,678
  2,753
  1,623
  293
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,054
  2,800
  3,766
  4,952
  6,359
  7,974
  9,772
  11,715
  13,757
  15,843
  17,916
  19,931
  21,833
  23,578
  25,133
  26,470
  27,572
  28,430
  29,042
  29,412
  30,782
  32,412
  34,018
  35,608
  37,193
  38,783
  40,389
  42,022
  43,694
  45,414
Total cash flow (excl. dividends), $m
  812
  1,165
  1,634
  2,221
  2,935
  3,775
  4,739
  5,816
  6,994
  8,256
  9,577
  10,949
  12,348
  13,758
  15,163
  16,554
  17,920
  19,258
  20,564
  21,839
  24,317
  27,248
  30,338
  33,583
  36,982
  40,533
  44,238
  48,097
  52,113
  56,290
Retained Cash Flow (-), $m
  -986
  -1,415
  -1,988
  -2,705
  -3,576
  -4,602
  -5,779
  -7,095
  -8,533
  -10,073
  -11,693
  -13,368
  -15,077
  -16,798
  -18,514
  -20,211
  -21,880
  -23,513
  -25,108
  -26,665
  -28,187
  -29,680
  -31,150
  -32,607
  -34,058
  -35,514
  -36,985
  -38,480
  -40,011
  -41,586
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
  -173
  -251
  -354
  -484
  -642
  -827
  -1,040
  -1,278
  -1,539
  -1,817
  -2,116
  -2,419
  -2,729
  -3,040
  -3,351
  -3,658
  -3,960
  -4,255
  -4,544
  -4,826
  -3,870
  -2,432
  -813
  976
  2,924
  5,019
  7,253
  9,617
  12,103
  14,704
Discount rate, %
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
  -163
  -222
  -292
  -370
  -451
  -531
  -605
  -668
  -716
  -746
  -759
  -749
  -721
  -678
  -622
  -558
  -489
  -418
  -350
  -287
  -174
  -81
  -20
  17
  35
  41
  39
  34
  26
  20
Current shareholders' claim on cash, %
  55.7
  34.2
  22.5
  15.7
  11.5
  8.7
  6.9
  5.6
  4.7
  4.0
  3.5
  3.2
  2.9
  2.7
  2.5
  2.4
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3
  2.3

Extraction Oil & Gas, Inc., formerly Extraction Oil & Gas, LLC, is an energy company. It is focused on the acquisition, development and production of oil, natural gas and natural gas liquids (NGL) reserves in the Rocky Mountains, primarily in the Wattenberg Field of the Denver-Julesburg Basin (the DJ Basin) of Colorado. It focuses on the development of the Codell and Niobrara formations. It offers its exploration and production processes in various steps, such as seismic, site preparation, drilling the well, completing the well, monitoring the well and reclaiming the site. The Company utilizes sound walls to mute or redirect noise caused by its operations. The Company uses an electric rig to manage its drilling operations. It uses vapor recovery units to capture emissions from storage facilities. It uses lease automatic custody transfer (LACT) units to collect oil from tanks in a closed-loop system that manages air emissions associated with the oil gathering and transportation process.

FINANCIAL RATIOS  of  Extraction Oil&Gas (XOG)

Valuation Ratios
P/E Ratio -2.7
Price to Sales 4.4
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 10.5
Price to Free Cash Flow -1.6
Growth Rates
Sales Growth Rate 40.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 63.7%
Cap. Spend. - 3 Yr. Gr. Rate 107.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 30.4%
Total Debt to Equity 30.4%
Interest Coverage -15
Management Effectiveness
Return On Assets -19.3%
Ret/ On Assets - 3 Yr. Avg. -2.5%
Return On Total Capital -24.7%
Ret/ On T. Cap. - 3 Yr. Avg. -6.4%
Return On Equity -36.1%
Return On Equity - 3 Yr. Avg. -8.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 70.1%
Gross Margin - 3 Yr. Avg. 76.6%
EBITDA Margin -89.6%
EBITDA Margin - 3 Yr. Avg. 33.4%
Operating Margin -113.7%
Oper. Margin - 3 Yr. Avg. -42.1%
Pre-Tax Margin -174.5%
Pre-Tax Margin - 3 Yr. Avg. -48.1%
Net Profit Margin -164%
Net Profit Margin - 3 Yr. Avg. -44.7%
Effective Tax Rate 6%
Eff/ Tax Rate - 3 Yr. Avg. 2%
Payout Ratio 0%

XOG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XOG stock intrinsic value calculation we used $604.296 million for the last fiscal year's total revenue generated by Extraction Oil&Gas. The default revenue input number comes from 0001 income statement of Extraction Oil&Gas. 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 XOG 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%, whose default value for XOG is calculated based on our internal credit rating of Extraction Oil&Gas, 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 Extraction Oil&Gas.
    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 XOG stock the variable cost ratio is equal to 42.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $485 million in the base year in the intrinsic value calculation for XOG 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 6.6% for Extraction Oil&Gas.

Corporate tax rate of 27% is the nominal tax rate for Extraction Oil&Gas. 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 XOG 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 XOG are equal to 433.8%.

Life of production assets of 8.4 years is the average useful life of capital assets used in Extraction Oil&Gas 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 XOG is equal to -40.3%. 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 - $1616.765 million for Extraction Oil&Gas - 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 175.479 million for Extraction Oil&Gas 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 Extraction Oil&Gas at the current share price and the inputted number of shares is $1.2 billion.

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COMPANY NEWS

▶ Colorado oil companies starting to cash in on production growth   [Nov-09-18 05:02PM  American City Business Journals]
▶ Why Colorado-Focused Oil Stocks Are Sizzling Today   [Nov-07-18 12:12PM  Motley Fool]
▶ Broomfield groups sue city to stop Extraction oil drilling   [Oct-23-18 05:05PM  American City Business Journals]
▶ These businesses are giving heavily to Republican efforts to keep the Colorado Senate   [Oct-09-18 02:05PM  American City Business Journals]
▶ Crestone Peak's Boulder County drilling plan halted by Colorado oil and gas regulator   [Oct-05-18 04:08PM  American City Business Journals]
▶ Boulder County sues two oil and gas companies to stop drilling plans   [Sep-26-18 09:45AM  American City Business Journals]
▶ Can Denver's Extraction Oil and Gas make fracking fit the suburbs?   [Sep-18-18 01:03PM  American City Business Journals]
▶ 9 Small-Cap Stocks to Sell Before Its Too Late   [Sep-10-18 03:00PM  InvestorPlace]
▶ Steven Cohen Dives Deeper Into Extraction Oil & Gas   [Sep-05-18 01:54PM  GuruFocus.com]
▶ Colorado commission, Extraction Oil & Gas sued over oil-well drilling plan   [Aug-31-18 05:02PM  American City Business Journals]
▶ $1B investment in natural gas processing unlocks growth in Colorado's DJ Basin   [Aug-21-18 12:00PM  American City Business Journals]
▶ Colorado oil and gas stocks hit hard by anti-fracking ballot initiative news   [Aug-10-18 04:48PM  American City Business Journals]
▶ Extraction Oil & Gas, Inc. to Host Earnings Call   [Aug-08-18 08:00AM  ACCESSWIRE]
▶ EXTRACTION O&G (XOG) Lags Q2 Earnings Estimates   [Aug-07-18 05:40PM  Zacks]
▶ Thought Leader: Attorney Mark Mathews drills down on oil and gas regulations   [Jun-14-18 02:00PM  American City Business Journals]
▶ How this Colorado oil and gas startup is mining Big Data for its next big strike   [May-29-18 08:15AM  American City Business Journals]
▶ Extraction Oil & Gas, Inc. to Host Earnings Call   [Feb-28-18 07:45AM  ACCESSWIRE]
▶ Broomfield OKs controversial drilling plan after hours of public comments   [Oct-25-17 08:51AM  American City Business Journals]
▶ Broomfield councilman beats back recall attempt over oil and gas issues   [Jul-19-17 09:20AM  American City Business Journals]
▶ Colorado oil and gas companies file inspection reports on 16,514 wells   [Jun-02-17 03:06PM  American City Business Journals]
▶ Questions remain over fatal Firestone blaze and Anadarko Petroleum's well shutdown   [Apr-27-17 07:05PM  American City Business Journals]
▶ Oil And Gas IPOs Return Amid Oil Price Recovery   [Mar-06-17 07:00PM  Oilprice.com]
▶ Broomfield council postpones 6-month oil and gas ban indefinitely   [Mar-01-17 02:25PM  at bizjournals.com]
▶ Broomfield council postpones 6-month oil and gas ban indefinitely   [02:25PM  American City Business Journals]

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