Egdon gives clue to Encore value?
Today saw Egdon Resources spin off its gas storage business into a new company called Portland Gas. It started out with a valuation of 245p per share and climbed a little by the close of play.
So can we use this valuation to get a ballpark figure for Encores gas storage business?
There are 67,801,840 shares in Portland so at 245p per share this gives a market cap of 166m. Portland have a storage capacity of 35bcf while Encore have a half share in a project with around four times this capacity, so the valuation should be around double which gives us 332m. Encore have 306,174,175 shares in circulation so that gives us a share price of 108p. The current Encore share price is 46.75p.
Now of course its hard to compare the assets of the two companies and I don’t know how similar they are in terms of getting a valuation. However, the 108p figure is ONLY for the gas storage side of the business so at that price, the rest comes free. I’m not going to try to put a figure on the E&P side of Encore so I’ll just say that from this very basic valuation, a demerged Encore could be worth in excess of 108p per share, well over double the current price.
Sourse: Egdon gives clue to Encore value?
Comments
Leave a Reply
About
This site about power resources in any possible way.