InPlay Oil 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.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production surpassing expectations. InPlay announced production levels of 9,600 boe/d, a significant increase over 2022-2Q average of 9,063 BOE/d. Management now believes 2022 production will be at the upper half of a previously stated range of 9,150-9,400 BOE/d. so we are raising our production forecast to 9,400 BOE/d. In addition, two other wells will be brought to production in the next few days leading us to believe production will continue to grow into the fourth quarter.
Drilling success leads to more activity. The company is adding two Extended Reach Horizontal (ERH) wells in 2022. We suspect InPlay may be drilling ERH wells to forego building infrastructure. In addition to drilling longer well spurs, management announced that it is planning to move part of its 2023 drilling program into late 2022. InPlay is adding two horizontal wells in the Belly River where it has not drilled since 2016. Management believes utilizing the success it has found in the Cardium play (Pembina and Willesden Green) will translate into the Belly River.
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.
VANCOUVER, British Columbia, Sept. 28, 2022 (GLOBE NEWSWIRE) — Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCF) (FSE: 75P) (“Permex” or the “Company“), a junior oil and gas company, is pleased to announce that the Company has started drilling on its Breedlove Field Prospect located in Martin County, Texas.
The PPC Eoff #3 well, operated by Permex Petroleum, is the first well to be drilled on the 7,780 gross acre Breedlove oil field. Two initial wells have been permitted and are expected to be drilled and completed on the property in the short term.
Permex Petroleum President and CEO Mehran Ehsan stated, “This makes for a transformative step towards the Company’s next phase of growth and scalability. We are excited to not only have started the drilling program, but to aggressively take advantage of the current high price environment and move the Company towards a cash-flow positive position.”
Drilling of the first well commenced on Wednesday, September 14, 2022, with a possible lateral conversion to follow upon successful mud logging and various zone tests. The drilling and completion of the vertical well will take approximately 60 days and for the horizontal well 90 days.
About Permex Petroleum Corporation
Permex Petroleum (CSE: OIL) (OTCQB: OILCF) (FSE: 75P) is a uniquely positioned junior oil & 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.
CAUTIONARY DISCLAIMER STATEMENT:
The Canadian Securities Exchange has neither approved nor disapproved the contents of this press release.
Forward-Looking Statements
This news release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as “intends”, “expects” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or will “potentially” or “likely” occur. This information and these statements, referred to herein as “forward‐looking statements”, are not historical facts, are made as of the date of this news release and include without limitation, statements regarding Permex’s expectations of entering into a growth phase in relation to its business and drilling programs; the market opportunity in the oil and gas industry; Permex’s future plans to bring additional shut-in wells online, and the deployment of the Company’s capital.
In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Permex which have been used to develop such statements and information but which may prove to be incorrect. Although Permex believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Permex can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: that Permex will continue to conduct its operations in a manner consistent with past operations; continued performance from existing wells; the continued and timely development of infrastructure in areas of new production; the accuracy of the estimates of Permex’s reserve volumes; certain commodity price and other cost assumptions; continued availability of debt and equity financing and cash flow to fund Permex’s current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Permex operates; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Permex to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of Permex to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Permex operates; and the ability of Permex to successfully market its oil and natural gas products.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial outlook that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.
CALGARY, Alberta, Sept. 28, 2022 (GLOBE NEWSWIRE) — InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to announce an operations update and a long-term forecast through 2025.
Operations Update
InPlay is currently producing at record production levels of 9,600 boe/d(2) (57% light oil and NGLs) based on field estimates. In Willesden Green, three (2.9 net) Extended Reach Horizontal (“ERH”) wells were brought on production approximately ten days ago and an additional two (1.9 net) ERH wells will be brought on production in the next few days. These wells are currently in the early clean-up stage and should achieve peak production over the next 30 to 60 days. The Company’s current plans from our original capital program is to drill one (0.95 net) additional two-mile well in Willesden Green.
Given the strong operational results in 2022 to date, InPlay expects to be in the upper half of our full year 2022 production guidance which equates to 9,150 to 9,400 boe/d(2). This forecast is estimated to deliver production growth of 28% to 31% on a per share basis (83% to 92% on a debt adjusted per share basis (1)) which is expected to be top-tier amongst light oil peers.
InPlay has elected to drill additional extended reach wells in 2022 (and fewer one-mile wells) than originally planned, including two two-mile ERH wells which achieved exceptional efficient drill times. The Company is also expecting increased industry activity levels in the first quarter of 2023. With our strong balance sheet, InPlay plans to take advantage of utilizing our preferred contractors and is now tactically planning to start 2023 expenditures in late 2022 by initiating preliminary construction work and adding two horizontal (2.0 net) Belly River light oil wells to the 2022 capital program. These wells are expected to be brought on production late in the fourth quarter positioning the Company for significant production increases in 2023. The Belly River is a producing play which we have not drilled in since 2016 and plans are to utilize the technologies and expertise developed in our Cardium play over the years. These wells have a high light oil weighting (approximately 90% – 95% light oil) that receives a premium to our benchmark Mixed Sweet Blend (“MSW”) pricing. The Company also plans to invest in environmental initiatives by constructing a third vapour recovery unit for additional emission conservation. As a result, the Board of Directors have approved an increased 2022 development capital budget of $70 to $72 million.
Outlook and Long-Term Forecast (3)
InPlay is continuously evaluating market conditions including current recession concerns in order to maximize shareholder returns. Even with the current volatility, commodity prices continue to remain historically strong in part due to the weak Canadian dollar, resulting in high rates of return on capital investment and short payout periods. It is InPlay’s belief that long-term commodity pricing will remain strong due to the lack of industry wide capital spending over recent years, restrictive government regulations and mandates and unstable global geopolitics leading to a multi-year bull cycle in crude oil prices. The Company is continuing to rapidly pay down debt and is in the best operational and financial position in our history while remaining focused on our disciplined strategy.
InPlay is pleased to provide a forecast to the end of 2025. The Company’s strategy is to continue to provide top-tier light-oil weighted growth, maintaining a strong financial position while providing significant FAFF and sustainable returns to shareholders. Our strategy is to provide organic production growth in a range of 6% – 10%. At a WTI price of US $80/bbl or better, we target 10% production growth and with WTI pricing of approximately US $60/bbl, production growth of 6% is targeted. This is demonstrated in our forecast to 2025 which would provide a meaningful return to shareholders.
The table below outlines the highlights of the four year forecast based on the following WTI pricing scenarios:
2022
2023
2024
2025
WTI (US$/bbl)
93.25
75.00
70.00
65.00
Production (boe/d)(2)
9,150 – 9,400
9,900 – 10,400
10,650 – 11,200
11,300 – 11,900
Capital ($ millions)
70 – 72
69 – 71
75 – 77
80 – 82
Net wells
17.5
17.5 – 18.5
18.5 – 19.5
21.0 – 22.0
DAPPS Growth (%)(1) *
83 – 92
46 – 59
40 – 45
30 – 35
AFF ($ millions)(4)
139 – 143
134 – 140
136 – 142
133 – 139
FAFF ($ millions)(1)
67 – 73
63 – 71
59 – 67
51 – 59
Working Capital (Net Debt) at Year-end ($ millions)(4)
(12) – (16)
43 – 50
97 – 103
141 – 147
Annual Net Debt / EBITDA(1)
0.1 – 0.2
(0.3) – (0.4)
(0.7) – (0.8)
(1.0) – (1.1)
EV / DAAFF(1)*
1.5 – 1.6
1.2 – 1.3
0.8 – 0.9
0.5 – 0.6
* Assumes a $2.50 share price
This forecast shows the high quality deliverability and return of our assets evidencing the sustainability of the Company with increasing positive working capital and minimal leverage.
Return of Shareholder Capital
InPlay’s trailing 12 month net debt to earnings before interest, taxes and depletion (“EBITDA”) ratio was less than 0.5 times at the end of the second quarter and is forecast to be 0.1 – 0.2 times at the end of 2022. With this threshold achieved, in addition to the continued generation of FAFF, elimination of debt and generation of positive working capital forecasted through to 2025, the Company is committed towards providing a return of capital to shareholders. The Company believes that our share price is currently significantly undervalued and the prudent first step in enhancing returns to shareholders is a share buyback program which the Company’s Board of Director’s has approved for implementation and will be subject to regulatory approval. With this in place the Company will be able to acquire common shares at opportunistic times and share prices.
As outlined above in the long term forecast, the Company is forecasting to generate material FAFF resulting in a growing positive working capital balance through to 2025. Our strategy for the accumulating additional FAFF is to provide returns to shareholders through potential share buybacks, dividends, increased tactical capital investment and accretive strategic acquisitions.
Given the significant volatility in both commodity prices and market conditions experienced in recent weeks, the Company and its Board of Directors will continue to monitor and evaluate the timing and implementation of additional returns to shareholders.
The Company has been disciplined in maintaining operational flexibility by quickly adapting to changing market conditions and commodity price fluctuations in making business decisions. This same prudent approach is currently being followed. Management would like to thank our employees, board members, lenders and shareholders for their support and we look forward to continuing our journey of deleveraging and delivering strong returns to shareholders in a sustainable, prudent and responsible manner.
For further information please contact:
Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632
Non-GAAP financial measure or ratio that does not have a standardized meaning under International Financial Reporting Standards (IFRS) and GAAP and therefore may not be comparable with the calculations of similar measures for other companies. Please refer to “Non-GAAP and Other Financial Measures” contained within this press release.
See “Production Breakdown by Product Type” at the end of this press release.
See “Reader Advisories – Forward Looking Information and Statements” for full details and key budget and underlying assumptions related to our 2022 capital program and associated guidance and long-term forecast.
Capital management measure. See “Non-GAAP and Other Financial Measures” contained within this press release.
Reader Advisories
Non-GAAP and Other Financial Measures
Throughout this press release and other materials disclosed by the Company, InPlay uses certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed under GAAP and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered alternatives to, or more meaningful than, financial measures that are determined in accordance with GAAP as indicators of the Company performance. Management believes that the presentation of these non-GAAP and other financial measures provides useful information to shareholders and investors in understanding and evaluating the Company’s ongoing operating performance, and the measures provide increased transparency and the ability to better analyze InPlay’s business performance against prior periods on a comparable basis.
Non-GAAP Financial Measures and Ratios
Included in this document are references to the terms “free adjusted funds flow (“FAFF”)”, “Net Debt to EBITDA”, “Production per debt adjusted share (“DAPPS”)” and “EV / DAAFF”. Management believes these measures and ratios are helpful supplementary measures of financial and operating performance and provide users with similar, but potentially not comparable, information that is commonly used by other oil and natural gas companies. These terms do not have any standardized meaning prescribed by GAAP and should not be considered an alternative to, or more meaningful than “profit (loss) before taxes”, “profit (loss) and comprehensive income (loss)”, “adjusted funds flow”, “capital expenditures”, “corporate acquisitions, net of cash acquired”, “working capital (net debt)”, “weighted average number of common shares (basic)” or assets and liabilities as determined in accordance with GAAP as a measure of the Company’s performance and financial position.
Free Adjusted Funds Flow (“FAFF”)
Management considers FAFF per share important measures to identify the Company’s ability to improve its financial condition through debt repayment, which has become more important recently with the introduction of second lien lenders, on an absolute and weighted average per share basis. FAFF should not be considered as an alternative to or more meaningful than AFF as determined in accordance with GAAP as an indicator of the Company’s performance. FAFF is calculated by the Company as AFF less exploration and development capital expenditures and property dispositions (acquisitions) and is a measure of the cashflow remaining after capital expenditures before corporate acquisitions that can be used for additional capital activity, corporate acquisitions, and repayment of debt or decommissioning expenditures or potentially return of capital to shareholders. FAFF per share is calculated by the Company as FAFF divided by weighted average outstanding shares. Refer to the “Forward Looking Information and Statements” section for a calculation of forecast FAFF.
Net Debt to EBITDA
Management considers Net Debt to EBITDA an important measure as it is a key metric to identify the Company’s ability to fund financing expenses, net debt reductions and other obligations. EBITDA is calculated by the Company as adjusted funds flow before interest expense. When this measure is presented quarterly, EBITDA is annualized by multiplying by four. When this measure is presented on a trailing twelve month basis, EBITDA for the twelve months preceding the Net Debt date is used in the calculation. This measure is consistent with the EBITDA formula prescribed under the Company’s Senior Credit Facility. Net Debt to EBITDA is calculated as Net Debt divided by EBITDA. Refer to the “Forward Looking Information and Statements” section for a calculation of forecast Net Debt to EBITDA.
Production per Debt Adjusted Share
InPlay uses “Production per debt adjusted share” as a key performance indicator. Debt adjusted shares should not be considered as an alternative to or more meaningful than common shares as determined in accordance with GAAP as an indicator of the Company’s performance. Debt adjusted shares is a non-GAAP measure used in the calculation of Production per debt adjusted share and is calculated by the Company as common shares outstanding plus the change in working capital (net debt) divided by the Company’s current trading price on the TSX, converting working capital (net debt) to equity. Debt adjusted shares should not be considered as an alternative to or more meaningful than weighted average number of common shares (basic) as determined in accordance with GAAP as an indicator of the Company’s performance. Management considers Debt adjusted share is a key performance indicator as it adjusts for the effects of capital structure in relation to the Company’s peers. Production per debt adjusted share is calculated by the Company as production divided by debt adjusted shares. Management considers Production per debt adjusted share is a key performance indicator as it adjusts for the effects of changes in annual production in relation to the Company’s capital structure. Refer to the “Forward Looking Information and Statements” section for a calculation of forecast production per debt adjusted share.
EV / DAAFF
InPlay uses “enterprise value to debt adjusted AFF” or “EV/DAAFF” as a key performance indicator. EV/DAAFF is calculated by the Company as enterprise value divided by debt adjusted AFF for the relevant period. Debt adjusted AFF (“DAAFF”) is calculated by the Company as adjusted funds flow plus financing costs. Enterprise value is a capital management measures that is used in the calculation of EV/DAAFF. Enterprise value is calculated as the Company’s market capitalization plus working capital (net debt). Management considers enterprise value a key performance indicator as it identifies the total capital structure of the Company. Management considers EV/DAAFF a key performance indicator as it is a key metric used to evaluate the sustainability of the Company relative to other companies while incorporating the impact of differing capital structures. Refer to the “Forward Looking Information and Statements” section for a calculation of forecast EV/DAAFF.
Capital Management Measures
Adjusted Funds Flow
Management considers adjusted funds flow to be an important measure of InPlay’s ability to generate the funds necessary to finance capital expenditures. Adjusted funds flow (“AFF”) is a GAAP measure and is disclosed in the notes to the Company’s consolidated financial statements for the year ending December 31, 2021 and the most recently filed quarterly financial statements. All references to AFF throughout this document are calculated as funds flow adjusting for decommissioning expenditures and transaction and integration costs. This item is adjusted from funds flow as decommissioning expenditures are incurred on a discretionary and irregular basis and are primarily incurred on previous operating assets and transaction costs are non-recurring costs for the purposes of an acquisition, making the exclusion of these items relevant in Management’s view to the reader in the evaluation of InPlay’s operating performance. The Company also presents AFF per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of profit (loss) per common share.
Working Capital (Net Debt)
Working capital (Net Debt) is a GAAP measure and is disclosed in the notes to the Company’s consolidated financial statements for the year ending December 31, 2021 and the most recently filed quarterly financial statements. The Company closely monitors its capital structure with a goal of maintaining a strong balance sheet to fund the future growth of the Company. The Company monitors working capital (net debt) as part of its capital structure. The Company uses working capital (net debt) (bank debt plus accounts payable and accrued liabilities less accounts receivables and accrued receivables, prepaid expenses and deposits and inventory) as an alternative measure of outstanding debt. Management considers working capital (net debt) an important measure to assist in assessing the liquidity of the Company.
Forward-Looking Information and Statements
This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends”, “forecast”, “targets”, “framework” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward looking information and statements pertaining to the following: the Company’s planned 2022 capital program including wells to be drilled and completed and the timing of the same; 2022 guidance based on the planned capital program including forecasts of 2022 annual average production levels, debt adjusted production levels, adjusted funds flow, free adjusted funds flow, Net Debt/EBITDA ratio, and growth rates; the Company’s long-term forecast including wells to be drilled and completed and the timing of the same; production estimates based on the planned capital program including forecasts of annual average production levels, debt adjusted production levels, adjusted funds flow, free adjusted funds flow, working capital, Net Debt/EBITDA ratio, EV/DAAFF and growth rates; light oil and liquids weighting estimates; the expectation that the Company will be in the upper half of our full year 2022 production guidance; the expectation of high industry activity levels in the first quarter of 2023; the expectation that the Belly River wells will significantly reduce operating expenses in the field; the Company’s business strategy, milestones and objectives including, without limitation, the anticipated continuation of debt reduction throughout the year; the expectation that the Company will generate strong FAFF through 2025; expectations regarding the use of additional FAFF; expectations regarding the Company’s share buyback program, including the timing of the same; expectations regarding future commodity prices including InPlay’s belief that strong commodity pricing will remain leading to a multi-year crude bull cycle in crude oil prices; future oil and natural gas prices; future liquidity and financial capacity; future results from operations and operating metrics; future costs, expenses and royalty rates; future interest costs; the exchange rate between the $US and $Cdn; future development, exploration, acquisition, development and infrastructure activities and related capital expenditures, including our planned 2022 capital program and associated guidance.
Without limitation of the foregoing, readers are cautioned that the Company’s return to shareholders framework including a share buyback program and future dividend payments to shareholders of the Company, if any, and the level thereof remains uncertain and accordingly management’s expectations related thereto should not be unduly relied upon. The Company’s share buyback program, if any, dividend policy and funds available for the repurchase of shares or payment of dividends, if any, from time to time, is dependent upon, among other things, levels of FAFF, leverage ratios, financial requirements for the Company’s operations and execution of its growth strategy, fluctuations in commodity prices and working capital, the timing and amount of capital expenditures, credit facility availability and limitations on distributions existing thereunder, and other factors beyond the Company’s control. Further, the ability of the Company to implement a return to shareholder program will be subject to applicable laws, including, but not limited to, satisfaction of solvency tests under the ABCA, approval of the Toronto Stock Exchange (“TSX”) and satisfaction of certain applicable contractual restrictions contained in the agreements governing the Company’s outstanding indebtedness.
Forward-looking statements or information are based on a number of material factors, expectations or assumptions of InPlay which have been used to develop such statements and information but which may prove to be incorrect. Although InPlay believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because InPlay can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which InPlay operates; the timely receipt of any required regulatory approvals; the ability of InPlay to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which InPlay has an interest in to operate the field in a safe, efficient and effective manner; the ability of InPlay to obtain debt financing on acceptable terms and the anticipated lifting of certain restrictions on the payment of distributions to shareholders which currently exist thereunder; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and the ability of InPlay to secure adequate product transportation; future commodity prices; that various conditions to a shareholder return strategy can be satisfied, including TSX approval; expectations regarding the potential impact of COVID-19 and the Russia/Ukraine conflict; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which InPlay operates; and the ability of InPlay to successfully market its oil and natural gas products. The forward-looking information and statements included herein are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: the continuing impact of the COVID-19 pandemic and the Russia/Ukraine conflict; changes in our planned 2022 capital program; changes in commodity prices and other assumptions outlined herein; the risk that the Company is unable to implement a return to shareholder strategy or, if implemented, the risk that such strategy may be reduced, suspended or cancelled; the potential for variation in the quality of the reservoirs in which we operate; changes in the demand for or supply of our products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans or strategies of InPlay or by third party operators of our properties; changes in our credit structure, increased debt levels or debt service requirements; inaccurate estimation of our light crude oil and natural gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in InPlay’s continuous disclosure documents filed on SEDAR including our Annual Information Form and our MD&A.
This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about InPlay’s financial and leverage targets and objectives and InPlay’s long-term forecast, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. The actual results of operations of InPlay and the resulting financial results will likely vary from the amounts set forth in this press release and such variation may be material. InPlay and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, InPlay undertakes no obligation to update such FOFI. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about InPlay’s anticipated future business operations and strategy. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.
The forward-looking information and statements contained in this news release speak only as of the date hereof and InPlay does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
The key budget and underlying material assumptions used by the Company in the development of its 2022 guidance and long-term forecast including forecasted production, operating income, capital expenditures, AFF, FAFF, working capital (net debt), Net Debt/EBITDA, DAPPS and EV/DAAFF are as follows:
Actuals FY 2021
Previous Guidance FY 2022(1)
Updated Guidance FY 2022
Forecast FY 2023
Forecast FY 2024
Forecast FY 2025
WTI
US$/bbl
$67.91
$95.40
$93.25
$75.00
$70.00
$65.00
NGL Price
$/boe
$37.79
$47.80
$50.50
$43.00
$40.00
$37.25
AECO
$/GJ
$3.44
$6.00
$5.15
$4.90
$4.50
$4.65
Foreign Exchange Rate
CDN$/US$
0.80
0.79
0.77
0.73
0.73
0.73
MSW Differential
US$/bbl
$3.88
$2.70
$1.90
$3.75
$3.75
$3.75
Production
Boe/d
5,768
8,900 – 9,400
9,150 – 9,400
9,900 – 10,400
10,650 – 11,200
11,300 – 11,900
Royalties
$/boe
5.51
11.50 – 13.00
10.10 – 11.60
7.75 – 9.25
6.25 – 7.75
5.00 – 6.50
Operating Expenses
$/boe
12.83
11.00 – 14.00
11.00 – 14.00
10.50 – 13.50
10.00 – 13.00
9.50 – 12.50
Transportation
$/boe
1.11
1.05 – 1.30
1.05 – 1.30
1.00 – 1.25
0.90 – 1.15
0.85 – 1.10
Interest
$/boe
2.67
0.85 – 1.25
1.20 – 1.60
0.00 – 0.50
0.00 – 0.10
0.00 – 0.10
General and Administrative
$/boe
2.83
2.40 – 2.95
2.40 – 2.95
2.25 – 2.75
2.20 – 2.70
2.15 – 2.65
Hedging loss
$/boe
6.20
1.85 – 2.15
1.90 – 2.20
–
–
–
Decommissioning Expenditures
$ millions
$1.4
$2.0 – $2.5
$2.0 – $2.5
$3.5 – $4.0
$5.0 – $5.5
$5.0 – $5.5
Adjusted Funds Flow
$ millions
$47.0
$147 – $156
$139 – $143
$134 – $140
$136 – $142
$133 – $139
Actuals FY 2021
Previous Guidance FY 2022(1)
Updated Guidance FY 2022
Forecast FY 2023
Forecast FY 2024
Forecast FY 2025
Adjusted Funds Flow
$ millions
$47.0
$147 – $156
$139 – $143
$134 – $140
$136 – $142
$133 – $139
Capital Expenditures
$ millions
$33.3
$64
$70 – $72
$69 – $71
$75 – $77
$80 – $82
Free Adjusted Funds Flow
$ millions
$13.6
$83 – $92
$67 – $73
$63 – $71
$59 – $67
$51 – $59
Actuals FY 2021
Previous Guidance FY 2022(1)
Updated Guidance FY 2022
Forecast FY 2023
Forecast FY 2024
Forecast FY 2025
Adjusted Funds Flow
$ millions
$47.0
$147 – $156
$139 – $143
$134 – $140
$136 – $142
$133 – $139
Interest
$/boe
2.67
0.85 – 1.25
1.20 – 1.60
0.00 – 0.50
0.00 – 0.10
0.00 – 0.10
EBITDA
$ millions
$52.6
$150 – $159
$143 – $147
$135 – $141
$136 – $142
$133 – $139
Working Capital (Net Debt)
$ millions
($80.2)
$1 – $10
($12) – ($16)
$43 – $50
$97 – $103
$141 – $147
Net Debt/EBITDA
1.5
0.0 – 0.1
0.1 – 0.2
(0.3) – (0.4)
(0.7) – (0.8)
(1.0) – (1.1)
Actuals FY 2021
Previous Guidance FY 2022(1)
Updated Guidance FY 2022
Forecast FY 2023
Forecast FY 2024
Forecast FY 2025
Production
Boe/d
5,768
8,900 – 9,400
9,150 – 9,400
9,900 – 10,400
10,650 – 11,200
11,300 – 11,900
Opening Working Cap. (Net Debt)
$ millions
($73.7)
($80.2)
($80.2)
($12) – ($16)
$43 – $50
$97 – $103
Ending Working Cap. (Net Debt)
$ millions
($80.2)
$1 – $10
($12) – ($16)
$43 – $50
$97 – $103
$141 – $147
Weighted avg. outstanding shares
# millions
69.8
86.5
86.9
87.1
87.1
87.1
Assumed Share price
$
1.16(4)
3.66
2.50
2.50
2.50
2.50
DAPPS Growth(2)
31%
70% – 80%
83% – 92%
46% – 59%
40% – 45%
30% – 35%
Actuals FY 2021
Previous Guidance FY 2022(1)
Updated Guidance FY 2022
Forecast FY 2023
Forecast FY 2024
Forecast FY 2025
Share outstanding, end of year
# millions
86.2
86.5
87.1
87.1
87.1
87.1
Assumed Share price
$
2.18(3)
3.66
2.50
2.50
2.50
2.50
Market capitalization
$ millions
$188
$317
$218
$218
$218
$218
Working Capital (Net Debt)
$ millions
($80.2)
$1 – $10
($12) – ($16)
$43 – $50
$97 – $103
$141 – $147
Enterprise value
$millions
$268.2
$307 – $316
$230 – $234
$168 – $175
$115 – $121
$71 – $77
Adjusted Funds Flow
$ millions
$47.0
$147 – $156
$139 – $143
$134 – $140
$136 – $142
$133 – $139
Interest
$/boe
2.67
0.85 – 1.25
1.20 – 1.60
0.00 – 0.50
0.00 – 0.10
0.00 – 0.10
Debt Adjusted AFF
$ millions
$49.7
$151– $160
$143 – $147
$135 – $141
$136 – $142
$133 – $139
EV/DAAFF
5.4
1.9 – 2.1
1.5 – 1.6
1.2 – 1.3
0.8 – 0.9
0.5 – 0.6
(1) As previously released May 11, 2022.
(2) Production per debt adjusted share is calculated by the Company as production divided by debt adjusted shares. Debt adjusted shares is calculated by the Company as common shares outstanding plus the change in working capital (net debt) divided by the Company’s current trading price on the TSX, converting working capital (net debt) to equity. Share price at December 31, 2022 through December 31, 2025 is assumed to be consistent with the current share price.
(3) Ending share price at December 31, 2021.
(4) Weighted average share price throughout 2021.
See “Production Breakdown by Product Type” below
Quality and pipeline transmission adjustments may impact realized oil prices in addition to the MSW Differential provided above
Changes in working capital (net debt) are not assumed to have a material impact between Dec 31, 2021 and Dec 31, 2022.
Production Breakdown by Product Type Disclosure of production on a per boe basis in this press release consists of the constituent product types as defined in National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities and their respective quantities disclosed in the table below:
Light and Medium Crude oil (bbls/d)
NGLS (boe/d)
Conventional Natural gas (Mcf/d)
Total (boe/d)
2022 Annual Guidance
4,014
1,340
23,530
9,275(1)
2023 Annual Forecast
4,355
1,380
26,500
10,150(2)
2024 Annual Forecast
4,660
1,500
28,600
11,925(2)
2025 Annual Forecast
4,590
1,645
32,200
11,600(2)
Current Production
4,050
1,520
24,190
9,600
Notes:
This reflects the mid-point of the Company’s 2022 production guidance range of 9,150 to 9,400 boe/d.
This reflects the mid-point of the Company’s annual production forecast range.
With respect to forward-looking production guidance, product type breakdown is based upon management’s expectations based on reasonable assumptions but are subject to variability based on actual well results.
References to crude oil, NGLs or natural gas production in this press release refer to the light and medium crude oil, natural gas liquids and conventional natural gas product types, respectively, as defined in NI 51-101.
BOE Equivalent Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of 6:1, utilizing a 6:1 conversion basis may be misleading as an indication of value.
Oil and Gas Metrics This presentation may contain metrics commonly used in the oil and natural gas industry, such as “payout”. This term does not have standardized meaning or standardized methods of calculation and therefore may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Management uses oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare InPlay’s operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this presentation, should not be unduly relied upon.
“Payout” refers to the time required to pay back the capital expenditures (on a before tax basis) of a project.
The benefit of a recessionary economy is it helps to correct supply-demand imbalances. An obvious negative to this is it does so in a way where demand drops, causing supply to be more closely matched. This brings about downward pressure on prices. The price of oil is now where it was in January, before the Russian invasion of Ukraine, and before the partial ban on Russian oil by many large consumers.
The nine-month lows are a market response to an expected decline in economic activity as rising interest rates increase the potential for a deeper global recession – with further price pressure coming from a surging U.S. dollar.
Contracts for both Brent crude and WTI are up near 2% to start this final week of September, but are in part bouncing after a drop of 5% on Friday.
Another factor working against oil price increases is the strength of the dollar. The dollar index measures the $USD against a basket of major currencies; it has climbed to a 20-year high. Dollar-denominated oil has become much more expensive around the globe as oil is transacted in $USD. This pricing also has helped reduce demand for crude.
Five Reasons Oil and Energy May Tick Back Up
Yields on Eurozone government bonds are now rising. This may slow or reverse the strengthening of U.S. dollars as higher yields make them more competitive with U.S. government bonds. This could slow or reverse foreign exchange considerations and stem the rising cost of oil (after conversion to $USD) and help put upward pressure on demand.
Winter is approaching in Europe, and demand naturally picks up in the colder months for petroleum products. This additional demand would begin about the time that Europe has planned a full embargo on imports from Russia. A full embargo would halt the current 1.3 million barrels a day reaching the West. This supply would then have to be filled from other sources which would be expected to put upward prices on oil.
The Biden administration is proposing to replenish crude pulled from the Strategic Oil Reserve under a plan that is likely to see it order 60 million barrels this fall for delivery at an unspecified time in the future. That leaves at least another 100 million barrels to bring the country back to where we were in March 2022 – over two hundred more to bring us back to the peak. This promises to keep demand up well past any current crisis.
It has been a quiet hurricane season for the Gulf states, but there are at least two months left before Florida, Texas, and Louisiana, can let their guard down. These months are known for the strongest, most powerful hurricanes. The shutting of offshore oil wells or production in preparation (or repair after any storm) could cause rapidly rising prices.
Data last week showed OPEC-plus missed its target by 3.58 million barrels per day in August; this is a bigger shortfall than in July. Prices trend with expectations, if OPEC-plus continues to fall short, this could provide for prices to rise.
Take Away
Oil price increases and the concomitant strength of the energy sector has been a standout among other investments in 2022. There has been a slide in both since early June. A recipe for higher levels may be coming together in the months ahead as a multitude of factors come together that may reduce supply just as demand is building in the Northern hemisphere.
CALGARY, Alberta, Sept. 22, 2022 (GLOBE NEWSWIRE) — InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to announce that it has published its inaugural sustainability report (the “Sustainability Report”) which can be accessed through the Company’s website.
The Sustainability Report highlights the Company’s significant environmental successes and reaffirms the Company’s commitment to environmental stewardship while safely and efficiently developing our assets that contribute to the local, provincial and Canadian economies. The Sustainability Report outlines the Company’s progress on environmental, social and governance (“ESG”) practices and has been prepared using principles set forth by the Task Force on Climate-related Financial Disclosure (“TCFD”). The Company’s Board of Directors has approved the Sustainability Report which contains performance metrics for the 2020 and 2021 calendar years. Our goal is to ensure all stakeholders benefit from our business operations both in the short-term and long into the future.
For further information please contact:
Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632
This news release contains certain forward–looking statements within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends”, “forecast”, “targets”, “framework” and similar expressions are intended to identify forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward looking statements pertaining to the following: statements with respect to the Company’s commitments and goals, including its commitment to environmental stewardship while safely and efficiently developing our assets and its goal of ensuring all stakeholders benefit from our business operations both in the short-term and long into the future.
Forward-looking statements are based on a number of material factors, expectations or assumptions of InPlay which have been used to develop such statements but which may prove to be incorrect. Although InPlay believes that the expectations reflected in such forward looking statements are reasonable, undue reliance should not be placed on forward-looking statements because InPlay can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which InPlay operates; the timely receipt of any required regulatory approvals; the ability of InPlay to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which InPlay has an interest in to operate the field in a safe, efficient and effective manner; the ability of InPlay to obtain debt financing on acceptable terms and the anticipated lifting of certain restrictions on the payment of distributions to shareholders which currently exist thereunder; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and the ability of InPlay to secure adequate product transportation; future commodity prices; expectations regarding the potential impact of COVID-19 and the Russia/Ukraine conflict; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which InPlay operates; and the ability of InPlay to successfully market its oil and natural gas products.
The forward-looking statements included herein are not guarantees of future performance and should not be unduly relied upon. Such statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking statements including, without limitation: the continuing impact of the COVID-19 pandemic and the Russia/Ukraine conflict; changes in commodity prices and other assumptions outlined herein; the potential for variation in the quality of the reservoirs in which we operate; changes in the demand for or supply of our products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans or strategies of InPlay or by third party operators of our properties; changes in our credit structure, increased debt levels or debt service requirements; inaccurate estimation of our light crude oil and natural gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in InPlay’s continuous disclosure documents filed on SEDAR including our Annual Information Form and our MD&A.
The forward-looking statements contained in this news release speak only as of the date hereof and InPlay does not assume any obligation to publicly update or revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
CALGARY, AB, Sept. 19, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) (“Alvopetro”) announces the exercise of all outstanding warrants held by Cordiant Capital Inc. (“Cordiant”) and that we have now repaid the remaining $2.5 million outstanding on the credit facility.
A total of 2,685,956 warrants at a strike price of US$1.80 were granted to Cordiant in connection with the 2019 $15 million debt financing. Cordiant provided notice to exercise all warrants outstanding and in connection with the exercise, Alvopetro agreed to amend the terms of the warrant certificates so that a total of 1,342,978 of the warrants have been exercised by way of a cashless exercise with 738,638 common shares issued as a result of the cashless exercise. The remaining 1,342,978 warrants have been exercised at the strike price of US$1.80 per share, for total cash proceeds to Alvopetro of US$2.4 million. A total of 2,081,616 common shares have been issued in connection with the exercise. Alvopetro has also now repaid the final $2.5 million outstanding on our credit facility effective September 15, 2022.
President and CEO, Corey Ruttan commented:
“We would like to thank Cordiant for their support over the last three years. Their support was instrumental in providing us with the financial resources to bring our Caburé project onstream. The project has been consistently delivering results above pre-commercialization expectations allowing us to aggressively repay outstanding debt. We are proud to have been able to completely repay all project debt financing within the first 27 months of starting production. During this same time, we started quarterly dividends to our shareholders and we are now also firmly focused on our organic growth plans.”
Alvopetro Energy Ltd.’svision 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.
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 Alvopetro’s 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, 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.
ENGLEWOOD, Colo., Sept. 19, 2022 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ: GEVO) is pleased to announce that the U.S. Department of Agriculture has selected Gevo’s Climate-Smart Farm to Flight proposal for funding with an award ceiling of up to $30 million. Gevo’s project was one of the 70 projects selected by the USDA under the first pool of the Partnerships for Climate-Smart Commodities funding opportunity totaling $2.8 billion. The project aims to create critical structural climate-smart market incentives for low carbon-intensity corn as well as to accelerate the production of sustainable aviation fuel to reduce the sector’s dependency on fossil-based fuels.
“We are honored that our proposal was selected for funding as part of this historic partnership for Climate-Smart Commodities from the U.S. Department of Agriculture,” says Dr. Paul Bloom, Chief Carbon Officer and Chief Innovation Officer for Gevo. “We look forward to working with the great team of partners we’ve assembled to lower our carbon footprint throughout the entire SAF business system while delivering high-quality carbon accounting and rewarding growers for their contributions.”
The project will also focus on the importance of immutable tracking and tracing of the carbon-intensity score starting at the farm production level, through biofuels production, all the way to the sale to an airline company. Gevo plans to accomplish this with further development and implementation of Verity Tracking, a blockchain enabled solutions platform for carbon tracking through the entire business system.
About Gevo Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have the potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.
Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI.
Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters, without limitation, including Gevo’s technology, U.S. Department of Agriculture, the production of SAF, the attributes of Gevo’s products, and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2021, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.
Investor and Media Contact Heather L. Manuel 303-883-1114 IR@gevo.com
CALGARY, AB, Sept. 15, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces that our Board of Directors has declared a quarterly dividend of US$0.08 per common share, payable in cash on October 14, 2022, to shareholders of record at the close of business on September 29, 2022. This dividend is designated as an “eligible dividend” for Canadian income tax purposes.
Dividend payments to non-residents of Canada will be subject to withholding taxes at the Canadian statutory rate of 25%. Shareholders may be entitled to a reduced withholding tax rate under a tax treaty between their country of residence and Canada. For further information, see Alvopetro’s website at https://alvopetro.com/Dividends-Non-resident-Shareholders.
Alvopetro Energy Ltd.’svision 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.
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 the Company’s plans for dividends in the future, the timing and amount of such dividends and the expected tax treatment thereof. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to 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 and other significant worldwide events, 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 in properties 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. In addition, the declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. 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.
ENGLEWOOD, Colo., Sept. 13, 2022 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ: GEVO) is pleased to announce that its Northwest Iowa Renewable Natural Gas project, Gevo NW Iowa RNG, LLC (Gevo RNG), was granted registration approval by the Environmental Protection Agency (EPA), allowing Gevo RNG to participate in the Renewable Fuel Standard (RFS) program.
Gevo previously estimated that approval for RFS Renewable Identification Numbers (RINS) through RFS and carbon credits through California’s Low Carbon Fuel Standard (LCFS) program would happen in late 2022 or early 2023. This early approval is a result of the quality work by Gevo’s expert operations, sustainability, and compliance teams as well as Gevo’s dedicated project partners.
“The work we are doing at the Northwest Iowa RNG operations is critical to Gevo’s work in the reduction of the carbon intensity of fuels. While Gevo RNG is just one piece of the circular economy that Gevo is building, the capture of manure to make RNG in the production of transportation fuels is a very important component, said Dr. Chris Ryan, President and Chief Operating Officer at Gevo, Inc. Meeting the EPA registration requirements ahead of schedule is the direct result of the efforts of a dedicated team of hard-working individuals who demonstrate our collective commitment to this mission.”
The RNG Project generates renewable natural gas captured from dairy cow manure. The manure for the RNG Project is supplied by three dairy farms located in Northwest Iowa totaling over 20,000 milking cows. At full operational capacity, the RNG Project is expected to generate approximately 355,000 MMBtu of RNG per year, which is marketed by BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, “bp”) in California on behalf of Gevo.
About Gevo Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have the potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.
Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI.
Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters, without limitation, including Gevo RNG, the EPA registration approval, Gevo’s production of renewable natural gas, and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2021, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.
Media Contact Heather L. Manuel +1 303-883-1114 IR@gevo.com
CALGARY, Alberta, Sept. 12, 2022 (GLOBE NEWSWIRE) — InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) today announced their participation in Noble Capital Markets’ C-Suite Interview Series, presented by Channelchek.
InPlay Oil (IPOOF)(IPO.V) President & CEO Doug Bartole sat down with Noble Capital Markets Senior Research Analyst Michael Heim for this exclusive interview. Topics covered include:
How has InPlay reacted to recent energy sector strength?
How have drilling costs been affected by inflation and increased production?
Behind the decision to raise their credit facility while paying down debt
The current acquisition landscape
How sustainable are the current oil prices?
Why is InPlay an attractive way to invest in the energy space?
The interview was recorded on August 30, 2022 and is available now on Channelchek.
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.
About Noble Capital Markets
Noble Capital Markets, Inc. was incorporated in 1984 as a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving underfollowed small / microcap companies through investment banking, wealth management, trading & execution, and equity research activities. Over the past 37 years, Noble has raised billions of dollars for these companies and published more than 45,000 equity research reports. www.noblecapitalmarkets.com email: contact@noblecapitalmarkets.com.
About Channelchek Channelchek (.com) is a comprehensive investor-centric portal – featuring more than 6,000 emerging growth companies – that provides advanced market data, independent research, balanced news, video webcasts, exclusive c-suite interviews, and access to virtual road shows. The site is available to the public at every level without cost or obligation. Research on Channelchek is provided by Noble Capital Markets, Inc., an SEC / FINRA registered broker-dealer since 1984. www.channelchek.com email: contact@channelchek.com
For further information please contact:
Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632
CALGARY, AB, Sept. 8, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV); (OTCQX: ALVOF) announces a discovery at our 49.1% Caburé Unit C well, record August sales volumes and an operational update.
7-CARN-2D-BA Well (“Unit-C Well”)
The Unit-C well at the Caburé Unit (49.1% Alvopetro) was spud in July and drilled to a total measured depth (“MD”) of 2,096 metres. Based on Alvopetro’s analysis of open hole logs and fluid samples confirming hydrocarbons, the well has potential net pay in multiple formations using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off. The well was drilled with development objectives in the Pojuca and Marfim sands that are producing from, or tested hydrocarbons in, the offsetting Unit well (IMET-10). The well was also drilled with exploratory objectives in the deeper Maracangalha sands that are producing on the eastern side of the bounding fault. The well encountered a total of 52.6 metres of potential net hydrocarbon pay at an average 37.2% water saturation and average porosity of 16.8% in multiple formations. Fluid samples were also collected using a formation testing tool with natural gas being recovered from a sand in the Maracangalha Formation at 1,443.5 metres total vertical depth and oil from a deeper sand at 1,633.6 metres total vertical depth. Potential net pay is summarized, by formation, as follows:
Formation
Objective
Net Pay (metres)
Water Saturation (%)
Porosity (%)
Pojuca
Development
19.9
31.9
24.6
Marfim
Development
3.9
30.4
12.1
Maracangalha
Exploration
28.8
41.7
12.1
Total
52.6
37.2
16.8
August 2022 Sales Volumes
Our August daily sales volumes averaged 2,727 boepd, including natural gas sales of 15.6 MMcfpd, and associated natural gas liquids sales from condensate of 120 bopd, based on field estimates. Our August sales volumes are a record for Alvopetro, 8% above July sales volumes of 2,514 boepd and 16% above average volumes in the second quarter of 2022 of 2,359 boepd.
Operational Update
On August 26th, we spud our 182-C2 well on Block 182 (100% Alvopetro). The 182-C2 well is a follow-up well to our 182-C1 well drilled earlier this year and targets the Agua Grande and Sergi Formations further east from the bounding fault encountered during drilling of the 182-C1 well.
On our Murucututu project, the ANP inspection of our fiscal meter station at our 183-1 location was completed last week and, subject to receipt of all finalized reports, we expect to commence production from our 183-1 well this month.
Corporate Presentation
Alvopetro’s updated corporate presentation is available on our website at:
Alvopetro Energy Ltd.’svision 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:
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 Unit C well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities, should be considered to be preliminary until testing, detailed 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 Unit C 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.
Cautionary statements regarding the filing of a Notice of Discovery. The unit operator has submitted a Notice of Discovery of Hydrocarbons to the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (the “ANP”) with respect to the Unit C well. All operators in Brazil are required to inform the ANP, through the filing of a Notice of Discovery, of potential hydrocarbon discoveries. A Notice of Discovery is required to be filed with the ANP based on hydrocarbon indications in cuttings, mud logging or by gas detector, in combination with wire-line logging. Based on the results of open-hole logs, a Notice of Discovery has been filed for the Unit C well. These routine notifications to the ANP are not necessarily indicative of commercial hydrocarbons, potential production, recovery or reserves.
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 Unit C 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 results of the Unit C 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.
Crypto Mining can Retire Fossil Fuels for Good. Here’s How
To many, cryptocurrency may be considered the antithesis to ESG. Bitcoin, for instance, it consumes more energy per year than countries such as Finland and Belgium. However, new regulations and approaches to cryptocurrency and cryptocurrency mining could reduce carbon emissions as the industry turns to renewable energy and innovative solutions. Karen Jones, a Space Economist at The Center for Space Policy and Strategy, examines how ESG concerns from investors, the financial sector and governments are changing cryptocurrency and how, in turn, cryptocurrency could become a catalyst for renewable energy projects.
The future of blockchain is bright, but first we need to bring our expectations back to earth. To realize its full potential, the decentralized finance (DeFi) market must operate within regulatory guard rails — to protect both investors and the planet.
Cryptocurrency mining using proof of work calculations is very energy-intensive, but it isn’t the only option.
New regulations and new approaches to mining cryptocurrencies could also see reduced carbon emissions as the crypto industry turns to renewable energy and innovative solutions.
And looking long term, could space-based solar power one day fuel a space-based blockchain revolution?
Since the great cryptocurrency meltdown of May 2022, DeFi has been in the spotlight. Regulators are considering new ways to protect investors and discourage fraudulent activities after hundreds of billions of dollars in value were wiped out and entire currencies became essentially worthless, nearly overnight.
The Cost to the Planet
Now the market faces another challenge. Regulators and Environmental, Social, and Governance (ESG) motivated investors are applying pressure to reduce carbon footprints across many industries — especially the relatively new cryptocurrency market.
Even after this year’s major hit to the market, the global market capitalization for cryptocurrency is still approximately $1.04 trillion. And these companies — this technology, as it stands — is built on the mass consumption of energy.
Senior US politicians have warned that the seven largest crypto companies expect to increase their computing capacity to 2.4 gigawatts. That is a 230 percent increase from current levels, and enough energy to power 1.9 million homes. They called the miners’ energy consumption “disturbing.”
In early May this year, researchers at Columbia University estimated that global mining for Bitcoin alone, just the most popular among hundreds of cryptocurrencies, consumed more energy than the entirety of Argentina and emitted roughly 65 megatons of carbon dioxide into the atmosphere every year.
Cryptocurrency Legislation is Ramping Up
Blockchain-based currency is still in its wild west days, but policymakers are taking notice.
United States legislators have proposed a bill that aims to establish a framework for regulating cryptocurrency, including provisions directing the Federal Energy Regulatory Commission to study the energy impact of the cryptocurrency industry.
The crypto market currently involves energy-intensive mining to solve cryptographic problems, a key component of the blockchain for proof of work, the calculation computers complete to create a new Bitcoin. To reduce power needs, many blockchain applications are shifting from the energy-intensive proof of work consensus to proof of stake, which still validates entries onto the shared ledger, but emits far fewer greenhouse gas (GHG) emissions in doing so.
Despite the huge emissions caused by parts of the industry, not all crypto mining efforts have such large carbon footprints, even when they use proof of work. Mining can rely upon solar, wind, hydroelectric and geothermal renewable energy systems. To discourage carbon-intensive crypto mining operations, New York legislators have proposed a moratorium to partially limit cryptocurrency mining operations that use proof of work authentication methods to validate blockchain transactions. The moratorium would not apply to mining operations that utilize renewable energy.
The Paris Climate Agreement’s goal of Net Zero 2050 is ushering in an era of self-scrutiny, as industries examine their own industrial processes and carbon footprints. One way to do this is to evaluate the cradle to grave lifecycle assessment of a crypto transaction. Sometimes referred to as an environmental lifecycle analysis (E-LCA), this framework provides a structure for conducting an inventory and assessment of a product’s environmental footprint.
Moving towards a lifecycle assessment will also help companies produce data driven ESG statements. As ESG standards guide investors to green products and services, more industries, including crypto companies, will conduct a self-analysis of their own carbon footprints and environmental lifecycles. And good actors will be motivated to assess and broadcast their virtuous carbon-free lifecycles.
Although most environmental lifecycle-related disclosures are currently voluntary, this could change. The United States Securities and Exchange Commission (SEC) has proposed rules for registrant companies to conduct Scope 1, 2, and 3 emissions inventories. If these proposed rules become law, publicly traded cryptocurrencies would need to understand their life cycle emissions intensity, from direct operations (Scope 1), electricity purchases (Scope 2), and indirect upstream and downstream activities (Scope 3) emissions.
Crypto Mining as a Catalyst for Renewable Energy Projects
While there is always a fear that conducting an environmental assessment might reveal “inconvenient details,” it also represents a unique opportunity.
Crypto mining companies are often located near power sources to feed their power-hungry computers. As a result, crypto mining can be a catalyst or market driver for new renewable energy projects. For instance, Digital Power Optimization, in New York, now runs 400 mining computers from spare electricity produced by a hydroelectric dam in Hatfield, Wisconsin. There are many remote geographic areas where the energy demand market is not large enough to support a utility scale renewable energy site.
It is this symbiosis of crypto computer farms and remote green energy projects which offers the potential for mutual benefits — and it may not stop with rural projects.
Many cryptocurrency stakeholders and enthusiasts expect the DeFi market to expand its reach into near space, the moon and beyond — and this idea is not far from being realized. A range of distributed ledger technologies are already being considered for the space domain.
A multi-signature Bitcoin transaction has been demonstrated on the International Space Station. Other companies are moving forward with various space applications, including fundraising, smart contracts, autonomous satellite communications and blockchain applications for managing a range of satellite assets in a decentralized and accountable way.
Perhaps one day in the future an orbiting space-based solar power plant could generate several gigawatts of clean energy and power a range of blockchain applications in space.
Opportunities for consensus-based protocols across the space value chain Image: The Center for Space Policy and Strategy
Several countries, including China, India and the UK are seriously considering space based solar power. As the world seeks decentralized, accountable and carbon free technical solutions, it is this type of cooperative partnership between clean energy providers and blockchain applications that can answer the call.
About the Author:
Karen L. Jones is a Space Economist at The Center for Space Policy and Strategy.
This article first appeared on the World Economic Forum website in August 2022.
How Long Can the Imbalance of Energy Production and Demand Continue?
During the first 19 months after taking office, the Biden administration has leased fewer acres for oil and gas drilling than any president’s first 19 months since Harry Truman (1945-46). Not long ago, Candidate Biden promised to stop drilling on federal lands to help force a transition to cleaner energy. This promise has mostly been kept. But it is getting more difficult for the 46th POTUS. Demand pressures and reduced output caused oil prices to already be off its pandemic lows when Russia’s invasion of Ukraine gave way to a semi-embargo on Russian goods, which included oil and gas.
President Biden’s Interior Department leased 126,228 acres for drilling through Aug. 20, during his first 19 months in office. Analysts at the Wall Street Journal uncovered that no president since Nixon in 1969-70 leased out fewer than 4.4 million acres at this stage in their occupation of the White House.
Truman was the most recent to lease out fewer acres, 65,658. This was just after WWII at a time when offshore drilling was just beginning and the federal government didn’t yet control the deep-water leases that are the largest portion of the federal oil-and-gas program today.
The leasing program had tapered during the past decade as fracking shale became preferable to drilling offshore or on federal land. Biden’s use of land and deep-sea leases represents a decline of 97% as compared to the same time period of Trump’s stewardship which had declined 39% compared to his predecessor.
A record high number of drilling permits for existing leases were filed last year, according to The Interior Department . Department spokeswoman Melissa Schwartz told the Wall Street Journal that industry trends have driven most U.S. production to private and state-owned lands, and that of the roughly 35 million acres now leased from the federal government, about 60% aren’t actively producing.
As for offshore leases, the Biden administration has yet to complete a sale. It did hold one, on Nov. 17, offering 80 million acres in the Gulf of Mexico in a sale originally proposed by the Trump administration that would have been the largest offshore sale in U.S. history. It sold 1.7 million acres, but a federal judge invalidated the sale in January, ruling that the administration failed to do a proper environmental analysis.
One can either appreciate the resolve of the current administration in its effort to foster fewer emmited pollutants, or fault him for his role in curbing energy production and its contribution to higher prices and less energy independence. If the measurement had been made as of the first 17 months of his presidency, the acreage number would be zero, there were no onshore lease sales. The government then held five June 29-30.
Leases for oil and natural gas drilling is the beginning of the petroleum product supply chain. But, while there is no shortage of federal land, an escalation of lease sales now, or under any successor’s policies, would take years to build and deliver its first barrel.
The increase in gasoline and oil prices has caused the president to take steps to boost oil supplies. In late March the President said he’d be releasing as much as 180 million gallons from the strategic oil reserves over the following 180 days. This was unprecedented in its magnitude and a response to the doubling and tripling of gasoline prices.
Energy independence has been the goal of many of Biden’s predecessors. We live at a time when the call has been to prioritize policy that encourages transitioning to non-fossil fuel. This naturally has caused investors in resources like lithium and uranium to see price increases. Large oil price increases have also come from lower growth of petroleum supplies. Part of the relief valve the administration used, is tapping into the finite supply of strategic oil reserves. The current pace of using this resource is unsustainable.
This could indicate that energy investors, in fossil fuels and alternatives may see strong markets with demand outstripping supply going forward for some time.
