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Energy

Oil & Gas Sector Primer

Oil and gas equity analysis primer with an Excel valuation model. Covers reserves, netbacks, breakevens, NAV, EV/DACF and capital returns.

15 Sections 40 Pages PDF + Excel

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The full primer in PDF format

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  • ✓ 40-page sector primer
  • ✓ Worked valuations
  • ✓ Screening thresholds
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Excel Model

Plug-and-play valuation template

£45 / ~$58
  • ✓ Pre-built valuation model
  • ✓ Sensitivity tables
  • ✓ Scenario toggles
Buy Model - £45
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PDF + Model

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£59 / ~$76 £70
  • ✓ 40-page sector primer
  • ✓ Valuation model (.xlsx)
  • ✓ Save £11 vs buying separately
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Inside the primer

The 15-section contents, a worked valuation page, and the Excel dashboard.

Section 09, the NAV bridge from fields to equity: three field NPVs, cash, net debt and the PV of G&A to an equity NAV of $6,883M ($4.59/sh) and P/NAV 0.52x.

Table of Contents

  1. 01 How Exploration and Production (E&P) Companies Make Money
  2. 02 Listed E&P Company Types
  3. 03 The E&P Lifecycle and Reserve Ladder
  4. 04 Segments, Basins and Price Realisation
  5. 05 Revenue Drivers: Production Times Price
  6. 06 Cost Structure: Netback, F&D and Recycle
  7. 07 Decline Curves and the Reinvestment Treadmill
  8. 08 Valuation Frameworks
  9. 09 Worked Example: Multi-Period Portfolio NAV
  10. 10 Applied Case: PV-10 and the Standardised Measure
  11. 11 Applied Cases: Breakevens and Capital Returns
  12. 12 The Companies in This Primer
  13. 13 Key Metrics and Screening
  14. 14 Risks, Benchmarks and Comparative Case Study
  15. 15 Glossary and Cheat Sheet

40 pages · 15 sections · 2 worked NAVs

The Excel model

The model's Dashboard: NAV per share, P/NAV and band, blowdown NAV, PV-10, EV/DACF, reserve life, netback and year-1 free cash flow on one screen.

Educational material for professional use. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.

Exploration and production companies sell undifferentiated oil and gas at market prices. Margin lives in the operating netback after royalties, lease operating expense and transport; reserves are inventory that depletes every production day, so replacement drilling is not optional for a going concern. Standard EV/EBITDA and earnings multiples travel poorly across basins and decline profiles. The tools that fit are reserve-based NAV for the inventory and EV/DACF for cash-flow screening, with survey breakevens and corporate claims kept in separate columns.

The primer walks that toolkit through in sequence: issuer types and the reserve ladder, price realisation by basin, then netbacks, F&D and recycle, and the decline treadmill. Valuation frameworks lead into a multi-period portfolio NAV worked end to end, then applied cases on PV-10 versus the standardised measure, breakevens, and capital-return frameworks. Screening closes with the peer set, key metrics, and the risk checklist.

Free guides on the site unpack individual pieces (reserves reports, netbacks, decline curves, EV/DACF versus NAV) so you can revise one concept without reopening the full PDF. The companion Excel model runs to fifteen sheets, from per-field DCFs through to a breakevens-and-DACF screen, with every commodity price set on one assumptions sheet. Swap in a producer's own field data and the model reprices around it.

Sheets: Quick Start, Instructions, Assumptions, Field 1, Field 2, Field 3, Consolidated, EV-DACF, F&D & Recycle, Reserve Replacement, Reserves & Life, Netback Build, Breakevens, Sensitivity, Dashboard.

See this methodology applied to a real company:

EOG Resources (EOG) →

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