Clare Capital uses the Enterprise Value/2P reserves ratio to give an indication of how the market is valuing a number of New Zealand and Australian comparators in the oil and gas exploration and production industry (as at 22nd September 2016). Companies with an EV less than NZ$20 million are excluded (such as Pan Pacific Petroleum).
The graph above highlights three values of each company in the Australasian Oil & Gas (O&G) Industry:
- Enterprise Value of the O&G company / Amount of latest reported 2P reserves [vertical axis]
- Amount of latest reported 2P reserves [horizontal axis]
- Enterprise Value of the O&G company [size of the bubble]
Green colouration denotes companies with New Zealand operations, while blue colouration represents Australian only operations. The closer a company is to the horizontal axis, the ‘cheaper’ its market valuation.