The value of the “shale” assets of the Polish companies may even equal three quarters of the current value of shares in the case of PGNiG and even 40% of the share value in the case of Orlen – estimate the analysts of the Investment House of BRE Bank (DI BRE).

 

In response to the investors’ interest in the subject matter, they were trying to estimate how much could the companies potentially gain if the shale gas actually occurred on the territory of the licenses granted to them for exploration, and if it were possible to extract it and sell. The analysts used data regarding the US market and the levels of market valuations of the US companies engaged in the shale gas extraction (with an adjustment for the Polish realities – among others, occurrence of gas in the rock which is located deeper than in the US and on the areas with more dense population which may involve difficulties in the performance of the operations). According to this analysis, the shale assets of the Polish Oil and Gas Company (PGNiG) may be worth from PLN 0.8 to PLN 3.1 per one share of the company with the Friday’s price of the securities at PLN 4.05. In the case of Orlen, such assets may be equal to PLN 3.4 to PLN 14.8 per share which on Friday cost PLN 36.49. As the DI BRE analysts reserve, such estimates are burdened with significant risk because for the time being the deposits are not confirmed (the forecasts state that in Poland there may be from 1.4 to 5.3 trillion cubic meters of the shale gas which was divided proportionally by the analysts into the number of the licenses held by the individual companies), the price at which the gas could be sold in the future is not known, and there are many unknown elements as to the costs related with the deposits exploitation. That is why the difference between the minimum and maximum valuation of the shale assets presented by DI BRE is so large. “However, it is a fact that today’s valuations of PKN Orlen or PGNiG do not discount in any way the positive scenario to that extent,” the DI BRE analysts summarised.

 

 

Source: Parkiet, page no. : 1, 2011-10-03, by: TGS