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Petroleo Brasileiro: Now the World s Fifth Largest Oil Company

Posted on June 23, 2008

When we raised oil price for calculation purposes to $100 a barrel on May 13, we raised estimated Net Present Value [NPV] for the common stock of Petrobras (PBR) to $75 a share from $61, adjusted for a 2:1 split. First quarter results according to Brazilian accounting reported the previous day chalked up strong gains in oil production cash flow offset by that old nemesis of price controls on refined products. Nonetheless, we project a high level of unlevered cash flow (Ebitda).Projected cash flow capitalized at unlevered multiples (PV/Ebitda) related to reserve life (Adjusted R/P) supports pre...

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gas , oil , petroleum , refined