What’s a gas company worth?
Three weeks ago, we asked you: What is a gas giant worth?
Now, thanks to a report from The Wall Street Journal, we know.
The article cites data from Thomson Reuters and estimates that the value of the company at its peak in 2016 was about $15 billion, making it the third-largest publicly traded U.S. corporation behind oil and gas giant ExxonMobil and pharmaceutical giant Pfizer.
“We know from the data that there are about 200 of them in existence today,” Michael Kocher, an analyst at Bespoke Investment Group, said of the gas giant’s market value.
“So the market cap is $5 billion.”
Kocher also pointed out that this estimate assumes that gas companies will be profitable at some point in the future, and that there’s a good chance that the company will be bought out.
That would put it in a position to be worth about $10 billion, about four times what it was worth in 2016.
“The question is, how much is this worth today?
The answer is, it is hard to say,” Kochel told Bloomberg.
“If you have $15 [billion], you have to go through the motions of buying a company, paying dividends, investing in the business, and you can do that.
But if you are $10, you can just sell the company.”
Kochel noted that a lot of companies are being bought out or spun off.
He also pointed to the $3 billion sale of oil-and-gas company Devon Energy in August.
That was one of the biggest transactions in recent memory.