TAOIF - TAG Oil: Valuation Missing 75% Of Assets (And Is Still Cheap)
2024-05-06 09:37:51 ET
Summary
- TAG Oil has provided investors with a Net Present Value (NPV) for a 20-well development in Egypt, but believes it could add another fifty wells or more.
- The estimated development economics for its assets exceed industry norms, supported by existing infrastructure and expected flow rates.
- Management aims to maximise cash flows and total reserves to drive investor value, and there is potential for TAG Oil to be sold after reaching multiple billion barrels in reserves.
Thesis
TAG Oil ( TAO:CA ) has provided investors with a Net Present Value ((NPV)) for a 20-well development in Egypt but has stated it could add another fifty wells or more. Considering the expanded well count, TAO trades at about 10% of its potential NPV. If or when the market believes these reserves are economically extractable, TAO’s share price could appreciate to 50% of NPV.
Estimated development economics exceed industry norms, supported by existing infrastructure and expected flow rates....
TAG Oil: Valuation Missing 75% Of Assets (And Is Still Cheap)