Thursday, May 11, 2023
Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production growth combined with price increases is leading to rising revenues. 2023-1Q production rose to 2,767 boepd (up 11% annually and 2% sequentially). Monthly production had been reported, so results were in line with expectations. Realized gas prices were $12.06/mcf (up 20% annually and 8% sequentially). A biannual price adjustment in February resulted in higher rates. This was also disclosed previously, so pricing was in line with our expectations. Energy sales revenues were $18.2 million slightly below our $18.8 million estimate due to lower-than-expected oil and NGL sales.
Top line growth is flowing through to the bottom line. The company reported record Funds Flow From Operations of $15.0 million versus $10.9 million for the same period last year and above our $11.4 million estimate. Net income was $12.8 million ($0.33 per diluted share) versus $15.1 million ($0.30) also above our $9.1 million ($0.24) estimate.
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