Red Max theres basically 3 methods available that i like. When i...

Red Max theres basically 3 methods available that i like. When i discover a stock to buy aor am making an investment in it i use all 3 and come up with a consensus estimate.

NPV model for each well, and a discounted NPV for future wells.

Balnace sheet model, using acerage or resources, NAV etc

Future cash flow modeling with PE multiples.

Right now im comfortable just using the latter.

I have a spreadsheet with the next 3 years broken down, average well flows, projected wells according to thier updated presentations. Then i can tap in whatever gas or oil price and PE ration i want.

Its far too long for me to explian here , but these will help.



http://en.wikipedia.org/wiki/Discounted_cash_flow

http://en.wikipedia.org/wiki/Capital_asset_pricing_model

http://en.wikipedia.org/wiki/Valuation_using_discounted_cash_flows

http://en.wikipedia.org/wiki/Net_present_value

http://en.wikipedia.org/wiki/Net_asset_value

http://en.wikipedia.org/wiki/Stock_valuation

http://www.investingator.org/pend-a-reliable-stock-investment-valuation-method/

This method is way over complicated and i would use it but it will help your understanding.
http://www.ogfj.com/index/article-display/287487/articles/oil-gas-financial-journal/volume-4/issue-3/features/comparison-of-methods-used-to-calculate-netback-value.html