If Im evaluating an E&P Oil and Gas company, I can create 2 models, free cash flows and NAV which will assess its reserves (nav model) as well as cash flows.
So the cash flows will be est. production based on current production plus expected new production (proved, developed non prod.??). Then back out op. costs, royalties, cash tax and f,d&a and I got free cash flows??? What about interest expense, or if they raise capital?
THen for the nav. just take 2p reserves less all debt and deferred taxes to get nav???