How to Value STMP Stock: NAV Methodology and 2026 Scenario Analysis

Valuing junior oil exploration stocks like Stamper Oil & Gas Corp (TSX-V: STMP) is fundamentally different from valuing established companies. Traditional valuation metrics, such as price-to-earnings (P/E) ratios, are often not applicable because these companies are typically pre-revenue. Instead, investors focus on the potential value of the company’s assets, particularly its exploration licenses.

In the case of Stamper, the company holds five Petroleum Exploration Licenses (PELs) covering approximately 28,237 km² in Namibia. These licenses represent potential future revenue streams based on oil discoveries. Investors must assess the likelihood of these discoveries and the associated costs of exploration.

The primary valuation methodologies used for junior oil exploration stocks include risked and unrisked Net Asset Value (NAV). Risked NAV accounts for the probability of successful exploration, while unrisked NAV assumes full success. For Stamper, the risked NAV is approximately $255 million, while the unrisked NAV exceeds $1.5 billion. This stark contrast highlights the speculative nature of investing in early-stage oil exploration companies.

The distinction between risked and unrisked NAV is crucial for investors looking to value STMP stock. Risked NAV incorporates the probability of success for each of Stamper's PELs, providing a more conservative estimate of the company's potential value. In contrast, unrisked NAV assumes that all exploration efforts are successful, leading to a significantly higher valuation.

For Stamper, the risked NAV of approximately $255 million reflects the company's current market cap of around $10 million. This suggests that the market may not fully recognize the potential value of its assets. The unrisked NAV, exceeding $1.5 billion, indicates the substantial upside that could be realized if exploration efforts yield positive results.

Assigning probability weights to each PEL is a critical step in calculating risked NAV. For instance, PEL 107, where Stamper holds a 32.9% working interest, is adjacent to significant discoveries by supermajors like TotalEnergies and Shell. This block is considered the highest-value asset in Stamper's portfolio, and its success could dramatically influence the company's overall valuation.

Carried interest is a vital concept in the valuation of junior oil exploration stocks like Stamper. It refers to situations where a partner, in this case, Stamper, does not have to fund exploration costs but retains a percentage of ownership and revenue if a discovery is made. This structure allows companies like Stamper to maintain exposure to potentially lucrative projects without incurring the associated costs.

In Stamper's case, PELs 98, 102, and 106 have a carried interest structure, meaning they cost nothing to the company but still hold significant option value. This is particularly important in a high-risk industry like oil exploration, where capital expenditures can be substantial.

The carried interest discount in valuation means that while these assets may not contribute to immediate cash flow, they represent potential future value. Investors should consider the strategic importance of these assets in their overall valuation of STMP stock, as successful discoveries in these blocks could enhance the company's risked NAV significantly.

To better understand the potential future value of STMP stock, it is essential to consider various valuation scenarios for 2026. These scenarios can help investors gauge the risks and rewards associated with their investment.

1. **Base Case**: This scenario assumes a successful farm-down of PEL 107, where Stamper retains a 5-10% carried interest. Given the proximity to significant discoveries by supermajors, this scenario could lead to a substantial increase in the company's risked NAV.

2. **Bull Case**: In this optimistic scenario, a discovery by Chevron in the Walvis Basin, particularly at the Gemsbok-1 well, could de-risk adjacent PELs 98 and 106. This would not only enhance Stamper's valuation but could also attract further investment interest in the company.

3. **Bear Case**: This scenario assumes no near-term farm-out or successful discoveries, resulting in a stagnant valuation for STMP stock. In this case, the market cap may remain close to its current level, reflecting the risks inherent in the exploration phase.

These scenarios illustrate the potential volatility and upside associated with investing in STMP stock, emphasizing the importance of understanding the underlying assets and market dynamics.

The case of Sintana Energy (TSX-V: SEI) provides a relevant precedent for understanding the potential re-rating of STMP stock. Sintana experienced a dramatic increase in market capitalization, rising from approximately $27 million to over $200 million as nearby supermajor discoveries de-risked its acreage.

This comparison is particularly pertinent for Stamper, as both companies operate in similar environments with significant exploration potential. As supermajors like TotalEnergies and Shell continue to make discoveries in Namibia, the market may begin to recognize the value of Stamper's assets, leading to a potential re-rating of STMP stock.

Investors should keep an eye on developments in the region, particularly the upcoming catalysts in 2026, including TotalEnergies' Final Investment Decision (FID) for the Venus project and Chevron's exploration activities. These events could serve as catalysts for a similar valuation increase for Stamper, aligning with the trajectory observed in Sintana Energy.