International Petroleum (IPCO.TO), mcap=C$1.5bn, price C$11.02 vs C$15.65

$IPCO.TO pitch:
– O&G company with cash-flowing energy assets in Canada, offshore Malaysia, and France.
– Cheap on the valuation of its reserves and relative to peers.
– Flush in cash today – set to generate 28% of its market cap in 2022 FCF.
– Stands out from its peers in terms of capital allocation with management extremely capable of increasing company per-share value during the lean times.

$IPCO.TO valuation:
– Trades at 67% of NPV of 2P reserves are discounted at 8%, or 75% is discounted at 10%.
– Peer is levered and more expensive relative to their reserves.
– Reserve values are based on reasonable oil price assumptions of $73, $70, and $68 for 2022, 2023, and 2024.

Exp. gain: Not specified.

Full IPCO.TO write-up (free guest account required):

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