Guidance for 2015 is for $350-400m revenue (at $50 Brent), and a 38% increase in production volumes. Based on that, I estimate 2015 profits to be 26c (or 17p) profit per share, using generous assumptions:
This would give a high PE - fair enough in a cyclical industry. What if we adjust for a long term price of Brent $70?
- From their 14th May 2014 Investor presentation, and after going through the flowchart (p38) Genel's revenue rises/falls by around 6% for every 10% rise/fall in the oil price.
- So an 40% oil price increase to $70 Brent would give a 24% increase in revenue, to $496m. Profit would be 60c or 40p. At a share price of 600p, thats a PE of 15. Not cheap. And with a few unrealistic assumptions.
What am I missing?