Maple Groove Wealth Planners
Designed Securities Ltd.

A plain-cash valuation · Meren Energy Inc. (TSX: MER)

How much cash does Meren really make, and what is a share of it worth?

Meren Energy, until May 2025 called Africa Oil, owns 100 per cent of Prime Oil and Gas, which holds 8 and 16 per cent interests in two deepwater Nigeria blocks containing the producing Agbami, Akpo and Egina fields, operated by affiliates of Chevron and TotalEnergies. It consolidated Prime in March 2025 after buying out its partner BTG for shares, and working interest production averaged 30,800 boe a day in 2025. The company pays about 100 million US dollars a year in dividends and holds exploration stakes elsewhere in Africa, including the Venus discovery in Namibia through its associate Impact. This page counts only the cash that was actually left over each year, after every bill was paid and every well was drilled, then asks the only question that matters to an owner: what is one share worth, and how does that compare with the price? The rules come from the calculations economists and engineers use to decide whether a project is worth building, applied to a whole company.

figures to FY2025 · price US$1.62 (close of 28 August 2026) · all figures US dollars · Meren reports in US dollars, so every figure here including the share price is US$. Its TSX close of C$2.25 on 28 August 2026 converts at the Bank of Canada daily rate of 1.3888 to about US$1.62.
Every year of this cash history has been hand-checked against the company's own audited annual filings; the sources are named at the bottom of the page.
Step 1
Count only real cash
6 years of reported accounts, worked down from the "cash flow" in the headlines to the cash that was truly left for owners after every well was drilled.
Step 2
Project it forward
Start from the average of the history, or the latest year. Grow it at the dial you set for ten years, then at a long-run rate for as long as the wells keep producing.
Step 3
Bring it back to today
A dollar arriving in ten years is worth less than a dollar now. Your required return sets how much less.
Step 4
Compare it with the price
Take off the debt and the clean-up cost, add anything the business owns but does not need, divide by the shares. That number against US$1.62 is the whole story.
What one share is worth on your settings: the most you could pay today and still earn your required return
$1.14per share, US$
Price above value
Paying far more than it is worthPrice equals value at US$1.62Buying well below value
Today's share price, close of 28 August 2026
US$1.62
676.1M shares · US$1.1B in total
What you gain or lose buying at US$1.62
−$0.48
value minus price, in today's dollars; a minus sign means you are paying more than the cash is worth
The growth today's price assumes
+7.0% a year
ten years of growth in real cash that makes this start worth exactly US$1.62
When you get your money back, with your return
not within the well life
years until the cash you receive repays US$1.62 plus your required return
Your dials
-5%051020%
-4% declining0 flat+3%
6%89 typical1214%
How long the wells keep producing
Well life set to 8 years, the proved plus probable reserves.

What Meren really earned, and what you are assuming it will earn

Solid bars are reported history: the real cash left each year after every bill was paid and every well was drilled. Negative years are when the owners put cash in; positive years are when it came back out. Striped bars are your projection.

Owners put cash in (a negative year)Real cash left for ownersYour projectionDividends and buybacks (when shown)
-0.1B00.1B0.2B0.3B0.4BUS$reportedprojected202020252030US$322MUS$170M
Table view: every year, US$ millions
YearStatusReal cash leftPer share
2020reported201.4$0.43
2021reported203.0$0.43
2022reported231.2$0.49
2023reported106.3$0.22
2024reported−13.1−$0.03
2025reported322.3$0.52
2026projected169.9$0.25
2027projected169.9$0.25
2028projected169.9$0.25
2029projected169.9$0.25
2030projected169.9$0.25
2031projected169.9$0.25
2032projected169.9$0.25
2033projected169.9$0.25

If you bought one share today

The red bar is what you pay. Yellow years pay you back, including the return you asked for. Green years are pure profit on top. If there is no green, you paid more than the cash is worth.

What you payPaying you back, with your returnProfit on top
−$2−$2−$1−$1$0$1$1buyyr 5−$1.62 paid

At these settings you never get US$1.62 back with a 9.0% return within 8 years. Buying at US$1.62 loses you $0.48 a share in today's dollars.

What a share is worth under different assumptions

Your required return down the side, ten-year growth across the top. Your current setting is outlined; the dashed cells are within 10% of today's price. Blue means worth more than US$1.62, red means worth less.

return \ growth
-4%
-2%
0%
+2%
+4%
+6%
+8%
+10%
+12%
6%
$1
$1
$1
$1
$2
$2
$2
$2
$2
7%
$1
$1
$1
$1
$2
$2
$2
$2
$2
8%
$1
$1
$1
$1
$1
$2
$2
$2
$2
9%
$1
$1
$1
$1
$1
$2
$2
$2
$2
10%
$1
$1
$1
$1
$1
$1
$2
$2
$2
11%
$1
$1
$1
$1
$1
$1
$2
$2
$2
12%
$1
$1
$1
$1
$1
$1
$1
$2
$2
13%
$1
$1
$1
$1
$1
$1
$1
$2
$2

Growth after year 10, the well life, the starting point and the switches above all carry through. Every cell is the same arithmetic as the big number at the top.

Three honest answers from the same cash

Three answers from the same accounts and the same arithmetic, at your required return, long-run growth and well life. The gap between them is the growth you choose to believe in, and nothing else.

Floor: if it never grows again
The 5-year average of real cash with the growth dial at zero: ten flat years, then your long-run dial. This is the floor if the business never grows again.
✕$1.14
per share · -30% versus the US$1.62 price
Anything paid above this number is paying for growth that has not been demonstrated yet.
Base: the default settings
The same 5-year average of real cash, grown 0.0% a year for ten years. Meren's raised 2026 guidance points at cash flow from operations of 235 to 260 million US dollars, roughly level with 2025, while working interest production is guided down from 30,800 to 23,000 to 28,000 boe a day, so the growth dial starts at 0 and the short 8 year reserve life carries the decline.
✕$1.14
per share · -30% versus the US$1.62 price
To get here you have to believe 0.0% a year holds for a full decade. Move the dials to your own numbers.
The latest year, projected
The most recent year's real cash (2025), grown at the default 0.0% a year. A single year can flatter or punish a producer; the bars above show where it sits in the cycle.
✓$2.44
per share · +51% versus the US$1.62 price
One year of cash rides on one year's prices; the averages smooth the cycle.

From the reported figures to the cash in the bank, FY2025

Reported profit is an accountant's number, and the "cash flow" companies quote usually leaves the drilling out. Here the reported figures are worked down to the cash that was actually left after every bill and every well. Figures in US$ millions.

FY2025, US$ millions
Profit, as reported (the headline number)−31.6
Cash generated by operations, as reported364.2
+ Interest paid, put back34.8
− Rent on leases−0.7
− Every dollar spent on wells and plants−76.0
= Real cash left for owners322.3
Per share (624.5M diluted)$0.52
For comparison: dividends paid in 2025100.2
For comparison: buybacks in 20258.3
For comparison: assets bought and sold, net−384.9

What we take out, and why

  • Depreciation, depletion and every other paper charge: accountants spread the cost of past drilling over years. We ignore that and count the cash actually spent on wells and plants in the year it went out, so nothing is counted twice.
  • Interest paid: put back. Interest is the price of borrowed money, and your required return already charges for the price of money, so every company is judged the same way whether it borrows or not.
  • Rent on leases: small and short leases are treated as a cost of producing, like fuel.
  • Every dollar spent on wells and plants: taken out in full, including the drilling that grows production. That spending buys the future cash the dials project, so it is counted where it happens.

What 6 years of accounts say

Every line the model uses, every year, with the latest year highlighted. Dividends and buybacks are shown as money leaving for owners.

Every year, US$ millions

US$ millions202020212022202320242025
Profit, as reported−17.6190.7−60.387.1−279.1−31.6
Cash generated by operations, as reported194.7189.8234.5121.7−4.9364.2
+ Interest paid, put back28.818.30.00.00.034.8
− Rent on leases−1.2−0.50.00.0−0.5−0.7
− Spent on wells and plants−20.9−4.6−3.3−15.4−7.7−76.0
= Real cash left for owners201.4203.0231.2106.3−13.1322.3
Real cash per share, US$$0.43$0.43$0.49$0.22−$0.03$0.52
Assets bought and sold, net568.42.026.844.989.6−384.9
Dividends paid0.00.0−23.8−23.1−22.6−100.2
Buybacks0.00.0−39.9−6.0−45.3−8.3
Debt after cash, year end100.5−58.9−199.7−232.0−61.4155.3
Shares, millions (diluted average)471.8477.4474.4472.9449.4624.5
Production, barrels of oil equivalent a day28,70027,30023,50019,80017,00030,800

How the maths works, and what to be careful about

The words on this page

Real cash (true cash)
What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.
Required return
The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.
Well life (reserve life)
How long the wells keep producing. After the life you choose, nothing is counted. Meren's year-end 2025 statement of reserves shows working interest 2P reserves of 87.7 million boe and 1P of 48.8 million. Against 2025 working interest production of 30,800 boe a day that is 7.8 years on 2P and 4.3 years proved; against the 25,500 boe a day midpoint of 2026 guidance, about 9.4 years. The model uses 8 years.
What a share is worth
Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.
Where the default growth comes from
Meren's raised 2026 guidance points at cash flow from operations of 235 to 260 million US dollars, roughly level with 2025, while working interest production is guided down from 30,800 to 23,000 to 28,000 boe a day, so the growth dial starts at 0 and the short 8 year reserve life carries the decline.

The arithmetic, step by step

  1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
  2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
  3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
  4. Turn it into a share value. Add up the shrunk cash; take off net debt of US$212M; divide by 676.1M shares.
  5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

  • Only six years of history are shown and the start value averages five. Before 2020 Africa Oil was an exploration company with no production, so a longer series would not describe the business that exists today.
  • From 2020 to early 2025 the Nigerian barrels sat inside Prime, a 50 per cent owned joint venture accounted for by the equity method. Reported operating cash flow was a small corporate outflow and the cash actually arrived as Prime dividends inside investing activities. The cfo figures here add those dividends (200.0 in 2020, 200.0 in 2021, 250.0 in 2022, 175.0 in 2023, 36.0 in 2024, and 91.6 of distributions in 2025) to the reported number so the series is comparable across the consolidation. A joint venture dividend is declared by the JV board after the JV's own capital spending and debt service, so this is not the same thing as an operator's consolidated operating cash flow.
  • Prime was consolidated on 19 March 2025 after Meren issued roughly 240 million shares to BTG, which became a shareholder of about a third of the company. 2025 mixes two and a half months of equity accounting with the rest consolidated; Meren's own constructed full-year 2025 cash flow from operations on a 100 per cent basis was 347.6 million.
  • Production for 2020 to 2024 is the working interest share at 50 per cent of Prime as reported each year; 2025 is at 100 per cent. The jump from 17,000 to 30,800 boe a day is ownership, not growth. Entitlement production runs higher than working interest (35,100 versus 30,800 in 2025) because of the production sharing terms.
  • Net debt swings from 61.4 million of net cash at the end of 2024 to 155.3 million of net debt at the end of 2025 because consolidating Prime brought its reserves-based loan onto the balance sheet; at 30 June 2026 net debt was 212.3 million against a 600 million dollar facility.
  • The negative 2025 acquisition figure is the 380.4 million of cash that came onto the balance sheet when Prime was consolidated, plus a small loan repayment; 2020's 568.4 million is the cash cost of the original 50 per cent Prime purchase and investments in associates.
  • Interest is the payment of interest and arrangement fees on the 2020 to 2021 acquisition term loan and the interest paid on the consolidated reserves-based loan in 2025; the company carried no debt from 2022 to 2024.
  • Buybacks are repurchases of share capital only; settlements of performance and restricted share units are excluded. The 2024 figure of 45.3 million reflects the buyback programme that ran before the BTG transaction.
  • Decommissioning liabilities for the Nigerian fields sit inside the consolidated balance sheet from 2025 but are not separately deducted in this model.
  • Net income is volatile because it carries impairments of the Prime investment and exploration assets (including 436.7 million against Prime in 2024) and other non-cash items.
  • Analyst targets: average US$1.30 across 5 analysts (stockanalysis.com analyst consensus of C$1.80, converted at the 28 August 2026 Bank of Canada rate of 1.3888, 17 July 2026).

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.

Sources

Maple Groove Wealth Planners · prepared by Trevor Lawrence, Financial Advisor · every number on this page traces to the sources listed above or a dial you can see. For education, not investment advice.

This page illustrates a research process and is provided for general information only. It is not investment advice and not a recommendation to buy or sell any security. Figures are as at the dates shown and will change. Shares carry risk, including the possible loss of capital. Please speak with a qualified advisor about your own circumstances.