Category: Energy

In The Global Race for Fusion Energy – the U.S. Leaps Ahead

Posted on by phoffman@channelchek.com
U.S. Department of Energy (Flickr)

Why Fusion Ignition is Being Hailed as a Major Breakthrough in Fusion – a Nuclear Physicist Explains

American scientists have announced what they have called a major breakthrough in a long-elusive goal of creating energy from nuclear fusion.

The U.S. Department of Energy said on Dec. 13, 2022, that for the first time – and after several decades of trying – scientists have managed to get more energy out of the process than they had to put in.

But just how significant is the development? And how far off is the long-sought dream of fusion providing abundant, clean energy? Carolyn Kuranz, an associate professor of nuclear engineering at the University of Michigan who has worked at the facility that just broke the fusion record, helps explain this new result.

What Happened in the Fusion Chamber?

Fusion is a nuclear reaction that combines two atoms to create one or more new atoms with slightly less total mass. The difference in mass is released as energy, as described by Einstein’s famous equation, E = mc2 , where energy equals mass times the speed of light squared. Since the speed of light is enormous, converting just a tiny amount of mass into energy – like what happens in fusion – produces a similarly enormous amount of energy.

Fusion is the same process that powers the Sun. NASA/Wikimedia Commons

Researchers at the U.S. Government’s National Ignition Facility in California have demonstrated, for the first time, what is known as “fusion ignition.” Ignition is when a fusion reaction produces more energy than is being put into the reaction from an outside source and becomes self-sustaining.

The technique used at the National Ignition Facility involved shooting 192 lasers at a 0.04 inch (1 mm) pellet of fuel made of deuterium and tritium – two versions of the element hydrogen with extra neutrons – placed in a gold canister. When the lasers hit the canister, they produce X-rays that heat and compress the fuel pellet to about 20 times the density of lead and to more than 5 million degrees Fahrenheit (3 million Celsius) – about 100 times hotter than the surface of the Sun. If you can maintain these conditions for a long enough time, the fuel will fuse and release energy.

The fuel is held in a tiny canister designed to keep the reaction as free from contaminants as possible. U.S. Department of Energy/Lawrence Livermore National Laboratory

The fuel and canister gets vaporized within a few billionths of a second during the experiment. Researchers then hope their equipment survived the heat and accurately measured the energy released by the fusion reaction.

So What Did They Accomplish?

To assess the success of a fusion experiment, physicists look at the ratio between the energy released from the process of fusion and the amount of energy within the lasers. This ratio is called gain.

Anything above a gain of 1 means that the fusion process released more energy than the lasers delivered.

On Dec. 5, 2022, the National Ignition Facility shot a pellet of fuel with 2 million joules of laser energy – about the amount of power it takes to run a hair dryer for 15 minutes – all contained within a few billionths of a second. This triggered a fusion reaction that released 3 million joules. That is a gain of about 1.5, smashing the previous record of a gain of 0.7 achieved by the facility in August 2021.

How Big a Deal is this Result?

Fusion energy has been the “holy grail” of energy production for nearly half a century. While a gain of 1.5 is, I believe, a truly historic scientific breakthrough, there is still a long way to go before fusion is a viable energy source.

While the laser energy of 2 million joules was less than the fusion yield of 3 million joules, it took the facility nearly 300 million joules to produce the lasers used in this experiment. This result has shown that fusion ignition is possible, but it will take a lot of work to improve the efficiency to the point where fusion can provide a net positive energy return when taking into consideration the entire end-to-end system, not just a single interaction between the lasers and the fuel.

Machinery used to create the powerful lasers, like these pre-amplifiers, currently requires a lot more energy than the lasers themselves produce. Lawrence Livermore National Laboratory, CC BY-SA

What Needs to Be Improved?

There are a number of pieces of the fusion puzzle that scientists have been steadily improving for decades to produce this result, and further work can make this process more efficient.

First, lasers were only invented in 1960. When the U.S. government completed construction of the National Ignition Facility in 2009, it was the most powerful laser facility in the world, able to deliver 1 million joules of energy to a target. The 2 million joules it produces today is 50 times more energetic than the next most powerful laser on Earth. More powerful lasers and less energy-intensive ways to produce those powerful lasers could greatly improve the overall efficiency of the system.

Fusion conditions are very challenging to sustain, and any small imperfection in the capsule or fuel can increase the energy requirement and decrease efficiency. Scientists have made a lot of progress to more efficiently transfer energy from the laser to the canister and the X-ray radiation from the canister to the fuel capsule, but currently only about 10% to 30% of the total laser energy is transferred to the canister and to the fuel.

Finally, while one part of the fuel, deuterium, is naturally abundant in sea water, tritium is much rarer. Fusion itself actually produces tritium, so researchers are hoping to develop ways of harvesting this tritium directly. In the meantime, there are other methods available to produce the needed fuel.

These and other scientific, technological and engineering hurdles will need to be overcome before fusion will produce electricity for your home. Work will also need to be done to bring the cost of a fusion power plant well down from the US$3.5 billion of the National Ignition Facility. These steps will require significant investment from both the federal government and private industry.

It’s worth noting that there is a global race around fusion, with many other labs around the world pursuing different techniques. But with the new result from the National Ignition Facility, the world has, for the first time, seen evidence that the dream of fusion is achievable.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Carolyn Kuranz, Associate Professor of Nuclear Engineering, University of Michigan. Carolyn Kuranz receives funding from the National Nuclear Security Administration and Lawrence Livermore National Laboratory. She serves on a review board for Lawrence Livermore National Laboratory. She is a member of the Fusion Energy Science Advisory Committee.

The Winners of California’s Floating Wind Turbine Projects

Posted on by phoffman@channelchek.com
Image Credit: Scottish Government (Flickr)

How Do Floating Wind Turbines Work? Five Companies Just Won the First US Leases for Building them off California’s Coast

Northern California has some of the strongest offshore winds in the U.S., with immense potential to produce clean energy. But it also has a problem. Its continental shelf drops off quickly, making building traditional wind turbines directly on the seafloor costly if not impossible.

Once water gets more than about 200 feet deep – roughly the height of an 18-story building – these “monopile” structures are pretty much out of the question.

A solution has emerged that’s being tested in several locations around the world: wind turbines that float.

In California, where drought has put pressure on the hydropower supply, the state is moving forward on a plan to develop the nation’s first floating offshore wind farms. On Dec. 7, 2022, the federal government auctioned off five lease areas about 20 miles off the California coast to companies with plans to develop floating wind farms. The bids were lower than recent leases off the Atlantic coast, where wind farms can be anchored to the seafloor, but still significant, together exceeding US$757 million.

So, how do floating wind farms work?

Three Main Ways to Float a Turbine

A floating wind turbine works just like other wind turbines – wind pushes on the blades, causing the rotor to turn, which drives a generator that creates electricity. But instead of having its tower embedded directly into the ground or the seafloor, a floating wind turbine sits on a platform with mooring lines, such as chains or ropes, that connect to anchors in the seabed below.

These mooring lines hold the turbine in place against the wind and keep it connected to the cable that sends its electricity back to shore.

Most of the stability is provided by the floating platform itself. The trick is to design the platform so the turbine doesn’t tip too far in strong winds or storms.

Three of the common types of floating wind turbine platform. Josh Bauer/NREL

There are three main types of platforms:

A spar buoy platform is a long hollow cylinder that extends downward from the turbine tower. It floats vertically in deep water, weighted with ballast in the bottom of the cylinder to lower its center of gravity. It’s then anchored in place, but with slack lines that allow it to move with the water to avoid damage. Spar buoys have been used by the oil and gas industry for years for offshore operations.

Semisubmersible platforms have large floating hulls that spread out from the tower, also anchored to prevent drifting. Designers have been experimenting with multiple turbines on some of these hulls.

Tension leg platforms have smaller platforms with taut lines running straight to the floor below. These are lighter but more vulnerable to earthquakes or tsunamis because they rely more on the mooring lines and anchors for stability.

Each platform must support the weight of the turbine and remain stable while the turbine operates. It can do this in part because the hollow platform, often made of large steel or concrete structures, provides buoyancy to support the turbine. Since some can be fully assembled in port and towed out for installation, they might be far cheaper than fixed-bottom structures, which require specialty vessels for installation on site.

The University of Maine has been experimenting with a small floating wind turbine, about one-eighth scale, on a semisubmersible platform with RWE, one of the winning bidders.

Floating platforms can support wind turbines that can produce 10 megawatts or more of power – that’s similar in size to other offshore wind turbines and several times larger than the capacity of a typical onshore wind turbine you might see in a field.

Why Do We Need Floating Turbines?

Some of the strongest wind resources are away from shore in locations with hundreds of feet of water below, such as off the U.S. West Coast, the Great Lakes, the Mediterranean Sea and the coast of Japan.

Some of the strongest offshore wind power potential in the U.S. is in areas where the water is too deep for fixed turbines, including off the West Coast. NREL

The U.S. lease areas auctioned off in early December cover about 583 square miles in two regions – one off central California’s Morro Bay and the other near the Oregon state line. The water off California gets deep quickly, so any wind farm that is even a few miles from shore will require floating turbines.

Once built, wind farms in those five areas could provide about 4.6 gigawatts of clean electricity, enough to power 1.5 million homes, according to government estimates. The winning companies suggested they could produce even more power.

But getting actual wind turbines on the water will take time. The winners of the lease auction will undergo a Justice Department anti-trust review and then a long planning, permitting and environmental review process that typically takes several years.

The first five federal lease areas for Pacific coast offshore wind energy development. Bureau of Ocean Energy Management

Globally, several full-scale demonstration projects with floating wind turbines are already operating in Europe and Asia. The Hywind Scotland project became the first commercial-scale offshore floating wind farm in 2017, with five 6-megawatt turbines supported by spar buoys designed by the Norwegian energy company Equinor.

Equinor Wind US had one of the winning bids off Central California. Another winning bidder was RWE Offshore Wind Holdings. RWE operates wind farms in Europe and has three floating wind turbine demonstration projects. The other companies involved – Copenhagen Infrastructure Partners, Invenergy and Ocean Winds – have Atlantic Coast leases or existing offshore wind farms.

While floating offshore wind farms are becoming a commercial technology, there are still technical challenges that need to be solved. The platform motion may cause higher forces on the blades and tower, and more complicated and unsteady aerodynamics. Also, as water depths get very deep, the cost of the mooring lines, anchors and electrical cabling may become very high, so cheaper but still reliable technologies will be needed.

But we can expect to see more offshore turbines supported by floating structures in the near future.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Matthew Lackner, Professor of Mechanical Engineering, UMass Amherst.

Vanguard Drops Net Zero Pledge – Will Others Follow?

Posted on by phoffman@channelchek.com
Image Credit: Jim Surkamp (Flickr)

Will Asset Managers Start Stepping Back from ESG Pledges?

The Net Zero Asset Managers (NAZM) initiative is an international group of 291 asset managers with 66 trillion in combined AUM. They all signed that they are committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. This week the number of asset managers was reduced by one as Vanguard, with $8.1 trillion AUM left the agreement. Vanguard said it made the decision in an effort to better speak for itself on its views and to be certain to balance client’s needs and returns along with climate impact in its funds’ investments.

“Industry initiatives like NZAM can advance constructive dialogue, but they can also create confusion about the views of individual firms. We want to provide greater clarity that Vanguard speaks freely on important matters such as climate risk. After a considerable period of review, we have decided to withdraw from the NZAM in order to provide clarity on what our investors want about the role of index funds and how we think about material risks, including climate-related risk,” said Alyssa Thornton, a spokesperson for Vanguard.

Firms that have signed the NAZM agreement are coming under a lot of pressure from states, pension funds, and others to defend how this is measurably best for the assets left in the care of the manager.

Vanguard, the world’s top mutual fund manager, official statement read, “We have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks—and to make clear that Vanguard speaks independently on matters of importance to our investors.” Again, the themes are to not be beholden to outside control over its decisions and the company developing its own measurements of material risks from world energy-related moves.

Vanguard, said the change “will not affect our commitment to helping our investors navigate the risks that climate change can pose to their long-term returns.”

Is This Going to Be a Trend?

There is a movement growing with large clients asking investment firms to explain how their energy-investment-related decision is in line with their fiduciary role. Roughly a week ago, Consumers’ Research and 13 state attorneys general asked the Federal Energy Regulatory Commission to review Vanguard’s request to own energy company stocks. “Americans are paying sky-high electricity rates and companies like Vanguard are making the problem worse,” Will Hild, executive director of Consumers’ Research, wrote in an op-ed for the Wall Street Journal.

Another issue Hild has with Vanguard is its meddling with strategic decisions and corporate governance at energy firms. Hild wrote, “With more than $7 trillion in assets under management, the Pennsylvania-based investment firm has publicly committed to pressuring utilities to lower their emissions.” Hild then accused, “Vanguard appears to be not only putting America’s critical infrastructure at risk but violating its agreement only to control utility company shares passively. To protect U.S. consumers and safeguard national security, FERC should investigate the company’s conduct.”

Vanguard isn’t the only firm of the 291 that are being questioned by their largest customers.

Today North Carolina State Treasurer Dale Folwell sent a letter to BlackRock’s board of directors calling for Fink to step aside because the CEO’s “pursuit of a political agenda has gotten in the way of BlackRock’s same fiduciary duty” to its investors. “A focus on ESG is not a focus on returns and could potentially force us to violate our fiduciary duty,” Folwell wrote. North Carolina has approximately $14 billion with Blackrock, and $111 billion under management.

But the fiduciary knife can be cut both ways. Those that are more concerned with any impact that continued fossil-fuel use would have on climate and economies stand behind the argument that it is not in anyone’s best interest not to follow a net zero 2050 goal. “It is unfortunate that political pressure is impacting this crucial economic imperative and attempting to block companies from effectively managing risks — a crucial part of their fiduciary duty,” said Kirsten Snow Spalding, a vice president at sustainability nonprofit Ceres and a NZAM founding partner.

Meanwhile in order to be able to best decipher how to view concepts like net zero investing, the Texas Senate Committee on State Affairs will hold a hearing on December 15 to discuss the impacts of environmental social governance (ESG) policies on state pensions. The panel has asked Vanguard, BlackRock, StateStreet and ISS to appear and answer questions about their ESG practices. Texas previously asked the four firms to turn over documents in August. The Lone Star state had subpoenaed BlackRock to provide additional documents in person after the firm failed to comply with certain aspects of the initial request.

Take Away

All trends, whether investment related or not go through a vetting period, followed by a continued push and pull to seek balance. Firms that have signed on to NAZM can do their own analysis and develop their own plans that best serve their customers. The NZAM may only get in the way. Yet, they don’t have to back-off of caring about and keeping in mind environmental principles, they can just better tailor them to those they are contracted to invest for. An outside global organization is less likely to understand how to be a fiduciary for a Vanguard fund that may be used in the Louisiana state pension system. And with more investment firms acting independently, more and better opportunities will grow from the competition.

ESG, which is in a related family, will also develop and evolve over time. Down the road, investors, analysts, and organizations providing ESG scoring can get revised measures on impact and adjust scoring based on effectiveness.

Paul Hoffman

Managing Editor, Channelchek

Sources

NetZeroAssetMgars (NZAM)

VanguardLeavesNZAM

VanguardPullsOut

VanguardAntiWoke

Release – Alvopetro Announces November 2022 Sales Volumes and an Operational Update

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on ALVOF

Dec 07, 2022

CALGARY, AB, Dec. 7, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces November 2022 sales volumes and an operational update.

November 2022 sales volumes

November sales volumes averaged 2,667 boepd, including natural gas sales of 15.2 MMcfpd and associated natural gas liquids sales from condensate of 135 bopd, based on field estimates, a decrease of 2% from the October 2022 average daily volumes and an increase of 1% from our Q3 2022 average.

Operational Update

We have now moved the service rig to our 182-C2 well on our 100% owned and operated Block 182 and expect to commence testing operations shortly. We completed drilling the 182-C2 well in October to a total measured depth (“MD”) of 3,185 metres. Testing of the 182-C2 well will begin with the Sergi Formation, the deepest of two formations with hydrocarbons shows during drilling. As previously announced, the well encountered a 223.7-metre-thick section with 121.3 metres of sand estimated above 6% porosity in the sand-dominated interval between 2,704.1 and 2,927.8 metres total vertical depth in the Sergi Formation. Caliper logs indicate that a significant amount of the wellbore in the Sergi interval contains washouts from drilling and is out of gauge, making open-hole log analysis challenging. As such, hydrocarbon potential in the Sergi will be validated through formation testing. Following testing of the Sergi Formation, testing will proceed up-hole to the Agua Grande Formation where, based on open-hole wireline logs, the well encountered 10.9 metres of potential net hydrocarbon pay, with an average porosity of 8.9% and average water saturation of 25.1%, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off. This testing will assess the extent, if any, of commercial hydrocarbons associated with the well, the productive capability of the well and will help define the field development plan.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

     Twitter – https://twitter.com/AlvopetroEnergy     Instagram – https://www.instagram.com/alvopetro/     LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltd     YouTube –https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

bbls                         =              barrelsboepd                     =              barrels of oil equivalent (“boe”) per daybopd                       =              barrels of oil and/or natural gas liquids (condensate) per dayMMcf                      =              million cubic feetMMcfpd                 =              million cubic feet per day

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Testing and Well Results. Data obtained from the 182-C2 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities and initial testing data, should be considered to be preliminary until detailed pressure transient and other analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 182-C2 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning potential hydrocarbon pay in the 182-C2 well, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro’s testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results of the 183-B1 well and the 182-C2 well, equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Demand for Tankers Causes Shipping Rates to Explode

Posted on by phoffman@channelchek.com

Oil Tanker Day Rates To Be Supported By The EU’s Ban On Russian Crude

Over the past 12 months, global container shipping rates have steadily declined to their long-term averages as supply chain snarls have receded and backups at ports have disappeared.

Now, another segment of the cargo shipping industry is seeing day rates explode to record highs.

So-called dirty tankers, those that carry crude oil, are charging over $100,000 a day for their services as international sanctions against Russia force ships—including Suezmaxes, Aframaxes and very large crude carriers (VLCCs)—to take longer, more circuitous routes. Carriers that once made deliveries to the North Sea port of Rotterdam via the Baltic Sea are now having to sail to China, India and Turkey, which are twice or three times the distance. All three Asian countries have said they will continue to buy Russian oil.

The Baltic Exchange Dirty Tanker Index, which measures shipping rates on 12 international routes, rose as much as 243% for the 12-month period through the end of November.

So how high could rates go? According to Omar Nokta, a shipping analyst at Jefferies, they could potentially climb to between $150,000 and $200,000 a day.

We’re almost there now. The Aframax day rate to ship oil from the Black Sea to the Mediterranean hit an astronomical $145,000 a day during the week ended November 18, according to Compass Maritime.

Russia Oil Turmoil To Drive Tanker Market Higher

This week, the 27 countries of the European Union (EU) officially banned crude imports from Russia, the world’s number two producer, and on February 5, 2023, all Russian oil products will be banned. This will have the effect of disrupting global trade routes further, driving up rates even more.

As you can see below, Europe’s imports of Russian oil were already down dramatically from the beginning of 2022, when the country invaded Ukraine. Before the ban, the Netherlands was the only remaining European destination for deliveries outside of the Mediterranean and Black Sea basin. To help offset the loss of Russian supply, Norway will ship a record volume of North Sea oil in January, Bloomberg reports.

Oil Tankers Generating Record Revenues, Stocks Hitting New Highs

Due to changes in shipping routes, demand for oil tankers is expected to surge to levels not seen in three decades, according to Clarkson Research. The U.K.-based group is forecasting that the number of ton-miles, defined as one ton of freight shipped one mile, could increase 9.5% next year. That would mark the largest annual increase since 1993.

Volumes are already at pre-pandemic levels, with VLCCs and Aframaxes having exceeded 2019 volumes for the first time since the second quarter of 2020.

Oil Tankers Generating Record Revenues, Stocks Hitting New Highs

Also supporting rates is the fact that oil carriers are replacing vessels at a historically low pace.

In July, Clarksons reported that new shipbuilding orders for container vessels had surpassed those for tankers for the first time ever. Whereas the global order book for containerships stood at 72.5 million deadweight tonnage (dwt)—a measure for how much weight a ship can carrier—the orderbook for crude oil and oil product tankers was 34 million dwt, a new record low.

This has contributed to massive revenues and net income, which should keep carriers in a strong position even as container rates have dried up. Last week, Mitsui O.S.K. Lines president Takeshi Hashimoto told JPMorgan analysts that he believes profits will remain strong due to the company’s liquified natural gas (LNG) business as well as dry bulkers and tankers.

Frontline, the fourth largest oil tanker company, just reported net income of $154.4 million in the third quarter, compared to $108.5 million estimated.

Below you can see how revenues have surged for companies such as International Seaways, Ardmore Shipping and Scorpio Tankers.

With the S&P 500 still down more than 14% for the year, shares of a number of oil tankers have hit new all-time highs in recent days. Among those are Ardmore, International Seaways and Euronav. Teekay Tankers was up 226% year-to-date, while Scorpio was up 323% over the same period.

Will these returns continue? I can’t say, of course, but the structural support doesn’t appear to be going away anytime soon.

The Baltic Dirty Tanker Index is made up from 12 routes taken from the Baltic International Tanker Routes. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Mitsui OSK Lines Ltd.

This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes of U.S. Global Investors (GROW). Find more of Frank’s articles here – Originally published October 21, 2021

US Global Investors Disclaimer

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s)  and is not responsible for its/their content.

The Baltic Dirty Tanker Index is made up from 12 routes taken from the Baltic International Tanker Routes. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/22): Mitsui OSK Lines Ltd.

Crude Prices vs. Energy Company Prices –  Will the Gap Narrow?

Posted on by phoffman@channelchek.com
Image Credit: Mussi Katz (Flickr)

The Argument for Higher Oil Market Prices is Fairly Straightforward

The price of oil is near its 2022 low. This lower per barrel cost is normal when the commodities market perceives the economy as slowing or that it will slow. What is surprising is that the price is near the low for the year when the Chinese are easing Covid restrictions and will soon be requiring more fuel; at the same time, a Russian oil cap, which is sure to bring less supply to the market, was just instituted this week. In the meantime, energy producers, up 60.8% on the year, are not sinking at the pace of oil prices.

Source: Koyfin

Energy shares have been the big winners for 2022. And it is rare that they are flying solo, without the help of price increases of their underlying product. According to Bespoke Investment Group, last month marked the first time since 2006 that the S&P 500 energy sector has traded within 3% of a 12-month high while the price of West Texas Intermediate retreated more than 25% from its one-year peak.. 

The divergence has caught the attention of investors. Since drillers and miners tend to rise and fall with the prices of the commodities they produce, many expect the gap to narrow to its more historical norm. Most are looking for oil to rise rather than drillers to fall.

Pressures that could cause oil to rise include the EU winter season, the U.S. Strategic Reserves bumping up against depletion, OPEC+ keeping production quotas unchanged, and Western governments’ $60-a-barrel price cap on Russian crude. These, taken together, are expected to put upward pressure on per-barrel prices. The commodities market is not moving in accordance with these factors. Futures contracts for U.S. crude closed Monday 3.8% lower at $76.93 a barrel, its fourth-lowest settle of the year.

Working against the argument for higher crude prices is the expected slowing of world economies. The possibility of a recession in many global economies while central banks raise interest rates, is unknown. Any impact remains to be seen.

Paul Hoffman

Managing Editor, Channelchek

Release – InPlay Oil Corp. Confirms Monthly Dividend for December 2022

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on IPOOF

Dec 01, 2022, 17:02 ET

CALGARY, AB, Dec. 1, 2022 /CNW/ – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to confirm that its Board of Directors has declared a monthly cash dividend of $0.015 per common share payable on December 30, 2022, to shareholders of record at the close of business on December 15, 2022.  The monthly cash dividend is expected to be designated as an “eligible dividend” for Canadian federal and provincial income tax purposes.

About InPlay Oil Corp.

InPlay is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.

SOURCE InPlay Oil Corp.

For further information: Doug Bartole, President and Chief Executive Officer, InPlay Oil Corp., Telephone: (587) 955-0632; Darren Dittmer, Chief Financial Officer, InPlay Oil Corp., Telephone: (587) 955-0634

Release – Permex Petroleum Corporation Interview to Air on Bloomberg U.S. on the RedChip Money Report®

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on OILCD

November 30, 2022 07:30 ET | Source: Permex Petroleum Corporation

DALLAS, Nov. 30, 2022 (GLOBE NEWSWIRE) — RedChip Companies will air a new interview with Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCD) (FSE: 75P) (“Permex” or the “Company”), an independent energy company engaged in the acquisition, exploration, development, and production of oil and natural gas properties on private, state, and federal land in the United States, on The RedChip Money Report® on Bloomberg TV, this Saturday, December 3, at 7 p.m. Eastern Time (ET). Bloomberg TV is available in an estimated 73 million homes across the U.S.

Interview highlights:

In the exclusive RedChip Money Report interview, Permex Petroleum’s CEO, President, and Director Mehran Ehsan discusses the Company’s 78 oil and gas wells, the recompletion of oil and gas wells in Eddy County, New Mexico and Marin County, Texas, the Company’s acquisition strategy, and much more.

Access this interview in its entirety at https://www.oilcfinfo.com/interview_access

About The RedChip Money Report®

The RedChip Money Report® is produced by RedChip Companies Inc., an international Investor Relations and media firm with 30 years’ experience focused on Discovering Tomorrow’s Blue Chips Today™. “The RedChip Money Report®” delivers insightful commentary on small-cap investing, interviews with Wall Street analysts, financial book reviews, as well as featured interviews with executives of public companies.

About Permex Petroleum Corporation

Permex Petroleum is a uniquely positioned junior oil and gas company with assets and operations across the Permian Basin of West Texas and the Delaware Sub-Basin of New Mexico. The Company focuses on combining its low-cost development of Held by Production assets for sustainable growth with its current and future Blue-Sky projects for scale growth. The Company, through its wholly-owned subsidiary, Permex Petroleum US Corporation, is a licensed operator in both states, and owns and operates on private, state and federal land. For more information, please visit www.permexpetroleum.com.

About RedChip Companies

RedChip Companies, an Inc. 5000 company, is an international investor relations, media, and research firm focused on microcap and small-cap companies. For 30 years, RedChip has delivered concrete, measurable results for its clients. Our newsletter, the RedChip Money Report is delivered online weekly to 60,000 investors. RedChip has developed the most comprehensive service platform in the industry for microcap and small-cap companies. These services include the following: a worldwide distribution network for its stock research; retail and institutional roadshows in major U.S. cities; outbound marketing to stock brokers, RIAs, institutions, and family offices; a digital media investor relations platform that has generated millions of unique investor views; investor webinars and group calls; a television show, “The RedChip Money Report,” which airs weekly on Bloomberg US; TV commercials in local and national markets; corporate and product videos; website design; and traditional investor relation services, which include press release writing, development of investor presentations, quarterly conference call script writing, strategic consulting, capital raising, and more.

To learn more about RedChip’s products and services, please visit:

https://www.redchip.com/corporate/investor_relations

“Discovering Tomorrow’s Blue Chips Today”™

Forward Looking Statements

Statements in this press release may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws as well as applicable Canadian securities laws. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Company’s reports that it files from time to time with the U.S. Securities and Exchange Commission and the Canadian securities regulators which you should review. When used in this press release, words such as “will,” “could,” “plan,” “estimate”, “expect”, “intend”, “may”, “potential”, “believe”, “should” and similar expressions, are forward-looking statements. Forward-looking statements may include, without limitation, statements relating to the Company’s plans to list on NYSE American, financial condition and operating results, legal, economic, business, competitive and/or regulatory factors affecting Permex’s businesses and any other statements regarding events or developments Permex believes or anticipates will or may occur in the future. These forward-looking statements should not be relied upon as predictions of future events, and the Company cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by the Company or any other person that it will achieve its objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any obligation to publicly update or release any revisions to these forward- looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

Contact:

Permex Petroleum Corporation

Mehran Ehsan
President, Chief Executive Officer & Director
(469) 804-1306

Gregory Montgomery
CFO & Director
(469) 804-1306

Or for Investor Relations, please contact:

Dave Gentry
RedChip Companies Inc.
1-800-RED-CHIP (733-2447)
Or 407-491-4498
OILCF@redchip.com

Four Reasons Oil Prices Could Gain Upward Momentum

Posted on by phoffman@channelchek.com
Image Credit: Phillip Pessar (Image Credit)

The Odds May Again be Stacked on the Side of a Prolonged Oil Price Rally

Oil markets and the related energy industry have been cheered this year as the one clear winner, yet within the past few days, crude has brushed up against its low recorded at the start of 2022. The commodity has since bounced, and there are at least four reasons to believe that it will continue to rally.

On Wednesday, November 30, news that China will take steps to ease lockdown restrictions, a drop in U.S. oil supplies, a weaker U.S. dollar, and a signal of OPEC+’s intentions helped push crude prices up by more than 3.5%.

China

Major Chinese manufacturing cities are lifting Covid lockdowns, including the financial hub Shanghai and Zhengzhou (the location of the world’s largest iPhone factory). Renewed expectations that China’s economy may strengthen after being held back by restrictions on movement to contain Covid-19 helped lift prices. After lockdown protests last weekend, Chinese authorities reported fewer cases of the virus on Tuesday. Guangzhou, a city in the south of the country, relaxed some rules on Wednesday. Increased economic activity in China could come at a pace that dramatically increases the demand for oil and related products.

US Supply

U.S. petroleum stockpiles declined by 7.9 million barrels last week, according to reports from the American Petroleum Institute. Official figures from the U.S. Energy Information Administration (EIA) shown below indicate a declining trend that is unsustainable and will soon need to be turned around.

Source: EIA

The decline in the days supply is effectively borrowing against future stockpiles as there will need to be a time when this reverses, and more output-increasing stockpiles will add to demand on production.

U.S. Dollar

A weakening dollar has also helped enhance demand globally for crude by making contracts priced in the U.S. currency more affordable for overseas buyers. The dollar index, a measure of strength against a basket of six other major trading currencies, slipped 0.3% on Wednesday. It’s down about 5% in the past month.

While the effect of this FX change may not be felt by U.S. buyers, the added demand by requiring less local currency to translate into dollars effectively creates demand by virtue of its lower cost.

Source: Koyfin

OPEC+

The Saudis had been considering increasing their output to help soften price pressures and increase availability. This would occur when the cartel meets this weekend to decide output levels. It is reported that the meeting will not be in-person. When OPEC+ agrees to meet virtually, it tends to indicate they are not discussing any major changes to output targets.

Expectations of an increase in output had been built into the price; the new expectations are putting upward pressure on crude.

 Take Away

A number of factors have caused crude to trade off since late Spring. A number of forces are now stacked up that could push crude levels back upward. These include fewer lockdowns in China, a declining U.S. supply, the added global demand that will be attracted by a weakening dollar, and the new realization that members of OPEC+ are not likely to increase output limits. Additionally, there has been a looming concern as to how much supply will be taken offline with price limits that are to be placed on purchases of Russian oil early next week.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.marketwatch.com/articles/oil-demand-dollar-china-crude-51669810965?mod=markets

https://oilprice.com/Energy/Crude-Oil/Source-Dont-Expect-Any-Oil-Supply-Surprises-From-The-Sunday-OPEC-Meeting.html

https://www.eia.gov/petroleum/weekly/crude.php

Release – Alvopetro Announces 183-B1 Candeias Formation Test Results

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on ALVOF

Nov 29, 2022

CALGARY, AB, Nov. 29, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces results from the third interval tested in our 183-B1 well on our 100% owned and operated Block 183.

In July 2022, we completed drilling the 183-B1 exploration well to a total measured depth (“MD”) of 2,917 metres. Based on open-hole wireline logs and fluid samples confirming hydrocarbons, the well discovered hydrocarbons in multiple formations with a total of 34.3 metres of potential net hydrocarbon pay, with an average porosity of 10.6% and average water saturation of 29.0% using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off.

Alvopetro has completed the 183-B1 formation test in the Candeias Formation, the third of three formations with hydrocarbons shows during drilling of the well. We perforated a total of 3 metres in the Candeias Formation between 2,580 to 2,586 metres MD. During the clean up period we swabbed 16 bbls of completion fluid and 12 bbls of 36°API crude oil.   Cumulatively, over the duration of the 48-hour production test, we recovered 13 bbls of 35°API crude oil and 21 bbls of formation water.

Following this test, we will turn our focus back to the Sergi Formation in this well where we perforated a total of 26.5 metres in the upper portion of the Sergi Formation at various intervals between 2,811 metres MD and 2,886 metres MD. We initially swabbed 63 bbls of oil and 7 bbls of completions fluid during the clean-up period. After a short shut-in we then initiated the production test. Cumulatively, over the duration of the 72-hour production test, we recovered 59 bbls of 43°API oil, 7 bbls of water identified as completion fluid, and 0.28 MMcf of associated gas. The daily oil rate recovered during swabbing operations averaged 20 bopd.  We are engineering a stimulation plan for this upper Sergi section in this well and we have submitted applications to drill two follow up wells from this 183-B1 surface location targeting the full Sergi hydrocarbon column and the potential in the deeper Boipeba Member.

We now plan to move to test multiple zones in our 182-C2 well, commencing with the Sergi Formation where, as previously announced, based on open-hole wireline logs, the well encountered a 223.7-metre-thick section with 121.3 metres of sand estimated above 6% porosity in the sand-dominated interval between 2,704.1 and 2,927.8 metres total vertical depth. Caliper logs indicate that a significant amount of the wellbore in the Sergi interval contains washouts from drilling and is out of gauge, making open-hole log analysis challenging. As such, hydrocarbon potential in the Sergi will be validated through formation testing. Following testing of the Sergi Formation, testing will proceed up-hole to the Agua Grande formation where, based on open-hole wireline logs, the well encountered 10.9 metres of potential net hydrocarbon pay, with an average porosity of 8.9% and average water saturation of 25.1%, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off. This testing will assess the extent, if any, of commercial hydrocarbons associated with the well, the productive capability of the well and will help define the field development plan.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at: http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltdYouTube – https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

API = American Petroleum Institute°API = an indication of the specific gravity of crude oil measured on the API gravity scale.bbls = barrelsboepd = barrels of oil equivalent (“boe”) per daybopd = barrels of oil and/or natural gas liquids (condensate) per dayMMcf = million cubic feetMMcfpd = million cubic feet per day

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Testing and Well Results. Data obtained from the 183-B1 well and the 182-C2 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities and initial testing data, should be considered to be preliminary until detailed pressure transient and other analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 183-B1 well or the 182-C2 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning potential hydrocarbon pay in the 183-B1 well and the 182-C2 well, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro’s testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results of the 183-B1 well and the 182-C2 well, equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Release – Alvopetro Announces 183-B1 Agua Grande Formation Test Results

Posted on by aweinsoff@channelchek.com

Research, News, and Market Data on ALVOF

Nov 22, 2022

CALGARY, AB, Nov. 22, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces initial results from the second interval tested in our 183-B1 well on our 100% owned and operated Block 183.

In July 2022, we completed drilling the 183-B1 exploration well to a total measured depth (“MD”) of 2,917 metres. Based on open-hole wireline logs and fluid samples confirming hydrocarbons, the well discovered hydrocarbons in multiple formations with a total of 34.3 metres of potential net hydrocarbon pay, with an average porosity of 10.6% and average water saturation of 29.0% using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off.

Alvopetro has completed the 183-B1 formation test in the Agua Grande formation, the second deepest of three formations with hydrocarbons shows during drilling of the well. We perforated a total of 8.5 metres in the Agua Grande formation at various intervals between 2,680 metres and 2,699 metres MD. During the clean up flow period we recovered 16 bbls of completion fluid and 1 bbl of 52°API natural gas liquids (condensate).   After a short shut-in we initiated the production test on a 32/64″ choke. Cumulatively, over the duration of the 72-hour production test, we recovered 2.4 bbls of 48°API natural gas liquids (condensate), 9.4 bbls of formation water and 2.4 MMcf of gas. During the test, the flowing rate decreased from 5.7 MMcfpd to 0.3 MMcfpd, the average gas rate during testing operations was 0.8 MMcfpd.  At the beginning of the testing operations the shut-in wellhead pressure (“SIWHP”) was 2,555 psi, and the final flowing wellhead pressure was 40 psi.  After 32 hours of buildup the SIWHP was 610 psi.

These results indicate a high permeability zone that delivered strong initial production flow rates but, based on pressure and production declines over the flow period, and slow pressure build up following the test, the Agua Grande reservoir appears to be areally constrained in the high permeability zone and likely sub-commercial in the remaining Agua Grande zones. We will now proceed up-hole to test the Candeias Formation.  Based on open-hole logs, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off the Gomo member of the Candeias Formation was encountered at 2,578 to 2,583 metres total vertical depth, with 5.3 metres of potential net light oil pay, at an average 35.0% water saturation and average porosity of 15.7%.  A fluid sample in this Candeias interval was also collected with a dual packer wireline tool recovering 37.1°API oil with no water to surface from 2,580 metres depth at a formation pressure of 4,317 psi.

We previously announced the results of the 183-B1 formation test in the Sergi Formation, the deepest of three formations with hydrocarbons shows during drilling of the well. We perforated a total of 26.5 metres in the upper portion of the Sergi formation at various intervals between 2,811 metres MD and 2,886 metres MD. We initially swabbed 63 bbls of oil and 7 bbls of completions fluid during the clean-up period. After a short shut-in we then initiated the production test. Cumulatively, over the duration of the 72-hour production test, we recovered 59 bbls of 43°API oil, 7 bbls of water identified as completion fluid, and 0.28 MMcf of associated gas. The daily oil rate recovered during swabbing operations averaged 20 bopd.  We are engineering a stimulation plan for this upper Sergi section in this well and we have submitted applications to drill two follow up wells from this 183-B1 surface location targeting the full Sergi hydrocarbon column and the potential in the deeper Boipeba Formation.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltd YouTube – https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

API  =American Petroleum Institute
°API  =an indication of the specific gravity of crude oil measured on the API gravity scale.
bbls=barrels
boepd=barrels of oil equivalent (“boe”) per day
bopd=barrels of oil and/or natural gas liquids (condensate) per day
MMcf  =million cubic feet
MMcfpd=million cubic feet per day

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Testing and Well Results. Data obtained from the 183-B1 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities and initial testing data, should be considered to be preliminary until detailed pressure transient and other analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 183-B1 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning potential hydrocarbon pay in the 183-B1 well, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro’s testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results of the 183-B1 well and the 182-C2 well, equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Has Saudi Arabia Become Europe’s Secret Santa?

Posted on by phoffman@channelchek.com
Image Credit: Gunter Henschel (Flickr)

Europe May Be Saved from the December Planned Oil Embargo in a Nick of Time

On December 5, the European Union plans to cap oil prices at levels where EU nations would then be permitted to buy oil from Russia. This would significantly reduce the petroleum supply of the region going into winter. The day before this goes into effect, (December 4), OPEC+ will meet to set output levels. Saudi Arabia and other OPEC producers are expected to discuss an output increase, according to emissaries from the group. The 11th hour move could keep much needed petroleum flowing into the region at a time that weather-related demand would naturally grow, holiday driving would be expected to increase, and war-related strategies would have reduced oil coming out of Russia. While western news has verified their sources as actual delegates of OPEC+, the Saudi’s are now saying that their plans are always secret.  

About the New Expectations

A production increase of up to 500,000 barrels a day is now expected to be the discussion at OPEC+’s December 4 meeting, delegates said. Any output increase would mark a partial reversal of a controversial decision last month to cut production by 2 million barrels a day. This was agreed upon at the most recent meeting of the Organization of the Petroleum Exporting Countries and their Russia-led allies, a group known collectively as OPEC+.

The White House had said the production cut undermined global efforts to negatively impact Russia’s war in Ukraine. Saudi-U.S. relations have hit a low point over oil-production disagreements this year; if the December 4 OPEC+ meeting leads to increased oil, this may warm the cooled Saudi-U.S. relations.  

About the EU December 5th Plan

The European Union has agreed to stop all oil imports from Russia on December 5. The plan is to cap the prices at which EU nations would buy oil from Russia, that price is expected to be near $60 per barrel. Russia has reacted by increasing exports to Asia, but the price cap is expected to reduce its exports and lower total supply by up to one million barrels per day.

About the OPEC+ December 4th Expectations

A production increase of up to 500,000 barrels a day is now under discussion for OPEC+’s December 4 meeting, emissaries said.

Any increase in OPEC+ output will partially undo the decision made at OPEC+’s its last monthly meeting. In October the cartel voted to cut production by 2 million barrels per day. The decision by the Organization of the Petroleum Exporting Countries and their Russia-led allies, (OPEC+) was a disappointment to the White House and NATO nations that saw reduced production as strengthening Russia’s ability to fund its war with higher priced exports.  

Under normal production discussions by OPEC+ production increases, with oil prices falling more than 10% since the first week of November, one might not expect an increase. Brent crude traded at about $87 a barrel on Monday, while WTI, the U.S. benchmark, fell below $80 a barrel for the first time since September. Production increases could cause prices to fall further.  

Emissaries say, a production increase would be to respond to expectations that oil consumption will rise in the winter. Oil demand is expected to increase by 1.69 million barrels a day to 101.3 million barrels a day in the first quarter next year, compared with the average level in 2022.

OPEC and its allies say they have been carefully studying the G-7 plans to impose a price cap on Russian oil, conceding privately that they see any such move by crude consumers to control the market as a threat. Russia has said it wouldn’t sell oil to any country participating in the price cap, potentially resulting in another effective production cut from Moscow—one of the world’s top three oil producers.

Source: Koyfin

What Else?

Raising oil production ahead of the December 5 EU embargo would give the Saudis another argument that they are acting in their own interests, and not is support of Russia’s.

Talk of the production increase emerged after the Biden administration told a federal court judge that Saudi Crown Prince Mohammed bin Salman should have sovereign immunity from a U.S. federal lawsuit related to the killing of Saudi journalist Jamal Khashoggi. The immunity decision is seen by some as a concession to Prince Mohammed, and heighten his standing as the kingdom’s de facto ruler. The move comes after the Biden administration tried for months to isolate him.

Another factor that helps account for the timing of OPEC+’s discussion to raise output is the two large OPEC members, Iraq and the United Arab Emirates that want to pump more oil. Both countries are pushing the oil-producing nations to allow them a higher daily-production ceiling, which would lead to more oil produced globally.

Saudi officials late Monday denied reports the kingdom is reversing course and helping the West with added production.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.wsj.com/articles/saudi-arabia-eyes-opec-production-increase-ahead-of-embargo-price-cap-on-russian-oil-11669040336

https://finance.yahoo.com/news/oil-sinks-china-struggle-covid-024416236.html

https://www.reuters.com/business/energy/saudi-arabia-eyes-opec-production-increase-wsj-2022-11-21/

Permex Petroleum (OILCD) – Uplisting and offering postponed, models adjusted for earlier reverse stock split

Posted on by cpereira@noblefcm.com


Friday, November 18, 2022

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

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

Permex Petroleum decided to postpone its listing on the NYSE American due to market conditions. The company also indicated that a registration statement with the SEC has not yet become effective. The shares of Permex (now trading as OILCD) have fallen approximately 50% following the announcement of a 2 million (later raised to 3.6 million) common share offering. The offering was to be completed in conjunction with the move to the NYSE. Prior to the uplisting and registration announcement, Permex completed a 1-60 reverse stock split.

We are adjusting our estimates and price target to reflect a lower share count associated with the reverse stock split. Our new price target is now $40 per share versus our pre-stock split price target of $4 per share. We have increased our price target by less than a 60-1 multiple due to the following reasons. We have increased the discount rate we are using for the company to reflect what we view as increased financing risk. In addition, we have slowed the assumed pace of new well drilling to one every other quarter instead of one per quarter. We also believe the company will focus primarily on less expensive, but less productive, vertical wells until it starts generating cash flow to fund drilling.


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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.