Discounted Cash Flow (DCF) Analysis Levered

TransGlobe Energy Corporation (TGL.TO)

$3.65

+0.23 (+6.73%)

All numbers are in Millions, Currency in USD

Stock DCF: 4.09 | 3.65 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	148.46	299.14	140.10	188.77	169.01	199.68	235.92	278.74	329.33	389.10
Revenue (%)
Operating Cash Flow	59.45	69.19	44.84	31.71	44.96	55.34	65.39	77.25	91.28	107.84
Operating Cash Flow (%)
Capital Expenditure	-37.21	-40.12	-36	-7.06	-26.73	-33.44	-39.51	-46.68	-55.15	-65.16
Capital Expenditure (%)
Free Cash Flow	22.24	29.07	8.83	24.65	18.24	21.91	25.88	30.58	36.13	42.69

Weighted Average Cost Of Capital

Share price	$ 3.65
Beta	2.334
Diluted Shares Outstanding	73.34
Cost of Debt
Tax Rate	35.72
After-tax Cost of Debt	19.10%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.979
Total Debt	3.84
Total Equity	267.70
Total Capital	271.54
Debt Weighting	1.41
Equity Weighting	98.59
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	148.46	299.14	140.10	188.77	169.01	199.68	235.92	278.74	329.33	389.10
Operating Cash Flow	59.45	69.19	44.84	31.71	44.96	55.34	65.39	77.25	91.28	107.84
Capital Expenditure	-37.21	-40.12	-36	-7.06	-26.73	-33.44	-39.51	-46.68	-55.15	-65.16
Free Cash Flow	22.24	29.07	8.83	24.65	18.24	21.91	25.88	30.58	36.13	42.69
WACC
PV LFCF						19.04	19.56	20.09	20.63	21.19
SUM PV LFCF										100.50

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	15.04
Free cash flow (t + 1)	43.54
Terminal Value	333.90
Present Value of Terminal Value	165.72

Intrinsic Value

Enterprise Value	266.22
Net Debt	-34.09
Equity Value	300.30
Shares Outstanding	73.34
Equity Value Per Share	4.09