You use the same methodologies, except:
– You look at industry-specific multiples like P / MCFE and P / NAV in addition to the more standard ones.
– You need to project the prices of commodities like oil and natural gas, and also the company’s reserves to determine its revenue and cash flows in future years.
– Rather than a DCF, you use a NAV (Net Asset Value) model – it’s similar, but everything flows from the company’s reserves rather than simple revenue growth / EBITDA margin projections.
In addition to all of the above, there are also some accounting complications with energy companies and you need to think about what a “proven” reserve is vs. what is more speculative.