NOG.L WACC - Weighted Average Cost of Capital
The WACC of Nostrum Oil & Gas PLC (NOG.L) is 10.0%.
| Range | Selected | |
| Cost of equity | 116.7% - 183.5% | 150.1% |
| Tax rate | 19.5% - 32.7% | 26.1% |
| Cost of debt | 4.0% - 15.8% | 9.9% |
| WACC | 5.6% - 14.3% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 18.85 | 25.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 116.7% | 183.5% |
| Tax rate | 19.5% | 32.7% |
| Debt/Equity ratio | 46.13 | 46.13 |
| Cost of debt | 4.0% | 15.8% |
| After-tax WACC | 5.6% | 14.3% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NOG.L | Nostrum Oil & Gas PLC | 46.13 | -0.19 | -0.01 |
| GKP.L | Gulf Keystone Petroleum Ltd | 0 | 1.88 | 1.87 |
| HUR.L | Hurricane Energy PLC | 0.08 | 1.9 | 1.8 |
| IPEKE.IS | Ipek Dogal Enerji Kaynaklari Arastirma ve Uretim AS | 0 | 1.06 | 1.05 |
| OKEA.OL | Okea ASA | 0.17 | 1.53 | 1.37 |
| PGR.L | Phoenix Global Resources PLC | 1.74 | 0.48 | 0.21 |
| PHAR.L | Pharos Energy PLC | 0 | 0.4 | 0.4 |
| RKH.L | Rockhopper Exploration PLC | 0 | 1.49 | 1.49 |
| SQZ.L | Serica Energy PLC | 0.45 | 1.47 | 1.11 |
| TRIN.L | Trinity Exploration and Production PLC | 0.12 | 0.94 | 0.87 |
| Low | High | |
| Unlevered beta | 0.98 | 1.21 |
| Relevered beta | 27.64 | 37.67 |
| Adjusted relevered beta | 18.85 | 25.57 |
NOG.L's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for NOG.L:
cost_of_equity (150.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (18.85) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.