德意志银行Latin American Energy Getting ready for 2014

1、,Deutsche Bank Markets Research,Global Emerging Markets Brazil Oil highpoliticalrisk,*Upsidepotentialfromsecondaryrecovery *Valuationattractive,*Growthplanexecutionriskishigh *Argentinamacrosituationisworrisome,Ecopetrol,*LeadingpositioninbothUpstream 2),25 November 2013 Oil and,3),unsuccessful,impl

2、ementation of enhanced oil recovery techniques. Gran Tierra Valuation - We derive our price target from a DCF analysis. We use the DCF methodology because we believe it is a superior indicator of value to multiples, as it relies on free cash flows generated over a longer period of time rather than t

3、he profitability of a single year. Our WACC of 10.0% is based on 30% leverage and 8.3% after-tax cost of debt. We also assume 10.8% cost of equity based on a 1.2% sovereign risk premium, a 3.0% risk free rate and a 5.5% equity risk premium (historical average), along with 1.0 beta to the local marke

4、t Risk - The main downside risks to our Buy rating are: (1) disappointing performance in the Costacayo and Mosqueta Blocks, (2) an unsuccessful exploration and development program, (3) cost overruns and delays in the start-up of producing units, and (4) production disruption due to attacks on pipeli

5、nes. HRT Valuation - We value HRT on based on our NAV10 calculation for the Polvo field plus estimated net cash position as of YE13. We then deduct exploratory capex and overhead expenses. Risk - Main upside risks to our Hold rating: (1) discovery of economic oil in the Solimoes basin and (2) positi

6、ve exploration results from the campaign in Namibia. Main downside risk is the non closing of the Polvo deal and the end of the companys cash position. OGX Valuation - We have performed a detailed NAV calculation for OGX, on a project-by-project basis in the Campos and Parnaiba basins (for the gas t

7、hat has been contracted). We use DBs long term oil price of $110/bbl. Risk - The main upside risks to our Sell rating are: better than expected flow rates, lower production costs (mainly due to the need for fewer wells), early monetization from to asset sales and exploratory success and successful d

8、ebt restructuring. Pacific Rubiales Valuation - We derive our target price from a DCF analysis. We use the DCF methodology because we consider it as a superior indicator of value to multiples, as it relies on free cash flows generated over a longer period of time rather than the profitability of a s

9、ingle year. Our WACC of 10.0% is based on 30% leverage and an 8.3% after-tax cost of debt. We also assume 10.8% cost of equity based on a 1.2% sovereign risk premium, a 3.0% risk-free rate and a 5.5% equity risk premium (historical average), along with a 1.0 beta to the local market. Risk - Main dow

10、nside risks to our Buy rating are: 1) delays in the granting of environmental licenses as they should delay production growth; 2) disruptions to transportation infrastructure; 3) unsuccessful implementation of enhanced oil recovery techniques; and 4) commodity price risk.,Page 40,Deutsche Bank Secur

11、ities Inc.,25 November 2013 Oil as a result, the recommendations may differ and the price targets and estimates of each may vary widely. In August 2009, Deutsche Bank instituted a new policy whereby analysts may choose not to set or maintain a target price of certain issuers under coverage with a Ho

12、ld rating. In particular, this will typically occur for Hold rated stocks having a market cap smaller than most other companies in its sector or region. We believe that such policy will allow us to make best use of our resources. Please visit our website at to determine the target price of any stock

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