Saturday, June 28, 2014

Seeking Alpha: Can Natural Gas Development Drive PetroChina Further?

Having recently gone over the investment prospects for Italy's Eni (E) and China's CNOOC (CEO), I went into PetroChina (PTR) expecting to find another state-owned energy company trading at a discount to fair value. I think that is what I found, though deciding on the "right" EV/EBITDA multiple involves pretty arbitrary decisions of whether to add a half-point here or there that move the fair value quite a lot. I think PetroChina is undervalued today if it can deliver the mid-single digit EBITDA growth that analysts expect, but significant reserve potential has to be viewed in the context of rising production costs and a significant degree of interference from the government at all levels of the operation and end markets.

Read the full article here:
Can Natural Gas Development Drive PetroChina Further?

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