Wednesday, March 16, 2022

Alvopetro Energy (ALVOF)(ALV:CA)
Coverage Initiated With Outperform Rating and a $10 Target

Alvopetro Energy Ltd is a Canada based resource company engaged in the exploration, acquisition, development, and production of hydrocarbons in Brazil. The company holds interests in the Cabure and Gomo natural gas assets, two oil fields (Bom Lugar and Mae-da-lua) and seven other exploration assets in the Reconcavo basin onshore Brazil.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Alvopetro is well positioned to take advantage of the recent rise in energy prices. The price Alvopetro receives is set semi-annually based on oil and gas index pricing, heat content and the Brazilian-U.S. exchange rate. In February 2022, prices rose to approximately $11.28/mcf, a 59% increase over the realized price in the last quarter. With operating costs expected to remain at historical levels, the company should begin to see very large operating netbacks and free cash flow.

Management is in a very enviable position of choosing between expanding or returning proceeds to shareholders.  Most likely, it will do both. An initial dividend set in September has already been raised once to an indicated annual rate of $0.24 per share (yield of 7.0%). At the same time, the company has begun an active drilling program and indicated plans to expand midstream operations. Production …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.