Tuesday, May 10, 2022

Gevo (GEVO)
First quarter results meet expectations, but real story is plant progression

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 potential to yield net-zero greenhouse gas emissions when measured across the full lifecycle 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 lifecycle). 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.

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

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

Gevo reported revenues of $0.2m versus $0.1m, operating income of ($16.0m) versus ($9.9m) and net income of ($15.7m) versus ($10.1m). Results were in line with our expectations. The company’s cash position is solid at $413 million, and the company is already planning out its financing for plant development. Plans call for the combined use of nonrecourse project financing, corporate debt and shareholder investments.

Projects are moving forward. In January, Gevo announced it had begun the process of bringing its dairy manure-based project online in order to apply for credits. The credits could contribute $16-$20 million annually, and management is prepared for timing issues between production and receipt of credits. In March, it signed several “take-or-pay” agreements with airlines to provide jet fuel made from ethanol at its Net Zero One plant. In total, Gevo has contracts for 200m gallons of fuel annually and has stated a goal of delivering 1 billion gallons of fuel by 2030. Plant operations are on track, although management indicated it has used up some of the slack assumed in its timeline. …

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. 

Gevo Reports First Quarter 2022 Financial Results

Research, News, and Market Data on Gevo

Gevo to Host Conference Call Today at 4:30 p.m. EST/2:30 p.m. MST ENGLEWOOD, Colo. – May 9, 2022 – Gevo, Inc. (NASDAQ: GEVO) (“Gevo”, the “Company”, “we”, “us” or “our”) today announced financial results for the first quarter of 2022 and recent corporate highlights. Recent Corporate Highlights On January 31, 2022, Gevo announced that it had begun the process of bringing its dairy manure-based renewable natural gas (“RNG”) project online in northwest Iowa and once this facility has reached steady-state production levels of approximately 355,000 MMBTU, its evaluation period by the California Air Resource Board and the Environmental Protection Agency for Low Carbon Fuel Standard (“LCFS”) and Renewable Identification Number (“RIN”) credits will commence. Our Net-Zero 1 project continues to be on schedule, and we recently received the conditional use permits for the plant and the wind turbines that will help power the project. Verity Tracking continues to develop a proprietary platform based on distributed ledger technology (also known as the “blockchain”) and recently partnered with Farmers’ Edge, a company dedicated to helping farmers track data and improve agricultural decision making, to support development. On March 18, 2022, Gevo signed a “take-or-pay” agreement with British Airways plc to supply 30 million gallons per year of sustainable aviation fuel (“SAF”) over a five-year term. On March 21, 2022, the oneworld® Alliance announced that certain of its members plan to purchase up to 200 million gallons per year of SAF from Gevo over a five-year term expected to commence in 2027. On March 22, 2022, Gevo signed a “take-or-pay” agreement with Delta Air Lines, Inc. to supply 75 million gallons per year of SAF for seven years, replacing the existing agreement signed with Delta in 2019 to purchase 10 million gallons per year. 2022 First Quarter Financial Highlights Ended the quarter with cash, cash equivalents, restricted cash and marketable securities of $429.6 million compared to $475.8 million as of the end of Q4 2021 Revenue of $0.2 million for the quarter compared to $0.1 million in Q1 2021 Loss from operations of $(16.0) million for the quarter compared to $(9.9) million in Q1 2021 Non-GAAP cash EBITDA loss of $(10.3) million for the quarter compared to $(7.8) million in Q1 2021 GAAP net loss per share and non-GAAP adjusted net loss per share of $(0.08) for the quarter compared to $(0.05) in Q1 2021   Commenting on the first quarter of 2022 and recent corporate events, Dr. Patrick R. Gruber, Gevo’s Chief Executive Officer, said “We are moving forward with our Net Zero 1 plans in Lake Preston, South Dakota and couldn’t be more pleased with the progress we have made. We look forward to beginning site preparations later this year and construction early next year. We believe we have a world class team in place to manage the development of this first of its kind, Net-Zero plant and the many additional plants that will be needed to produce this valuable fuel. In northwest Iowa, our dairy RNG facility continues its ramp to stable production and I am very proud of how well that team executed to deliver the project on time and within budget. We intend to build many Net-Zero plants over the coming years and we believe we have all the right people in place to get it done.”   First Quarter 2022 Financial Results During the three months ended March 31, 2022, total revenue was $0.2 million, compared with $0.1 million in the same period in 2021. We sold approximately 35,000 gallons of SAF, isooctane and isooctene from our development facility at Luverne, Minnesota  in first quarter of 2022 compared to nil for the three months ended March 31, 2021 due to the COVID-19 shutdown. Cost of goods sold was $4.2 million for the three months ended March 31, 2022, compared with $2.0 million in the same period in 2021. The majority of first quarter 2022 cost of goods sold was related to a $2.9 million adjustment made to the Company’s finished goods and work in process inventory to net realizable value with the offset recorded in cost of goods sold. Selling, general and administrative expense increased by $5.6 million during the three months ended March 31, 2022, compared with the same period in 2021, due primarily to increases in personnel costs related to strategic new hiring, stock-based compensation, professional fees related to new contracts and higher costs for insurance. Preliminary stage project costs are related to our NW Iowa RNG and Net-Zero projects and consist primarily of research and development expense in addition to selling, general and administrative expenses of the projects. Preliminary stage project costs decreased by $2.2 million during the three months ended March 31, 2022, compared to the same period in 2021. The decrease is primarily due to the capitalization of Net-Zero 1 project costs in the third quarter of 2021, after completing certain project milestones. Net-Zero 1 related costs and RNG related costs were still being expensed in the first quarter of 2021. Gevo incurred a net loss for the three months ended March 31, 2022, of $(15.7) million, compared with a net loss of $(10.1) million during the same period in 2021. Non-GAAP adjusted net loss for the three months ended March 31, 2022, was $(15.7) million, compared with a non-GAAP adjusted net loss of $(10.0) million during the same period in 2021. Among other things, we incurred costs related to our production of isobutanol and hydrocarbon products for market development purposes, process technology and related process engineering work, expenses for additional intellectual property and know-how development for chemical and biological catalysts and related technologies, market development, partnership development, site development work, and Verity Tracking development expenses. Non-GAAP cash EBITDA loss in the three months ended March 31, 2022, was $(10.3) million, compared with a $(7.8) million non-GAAP cash EBITDA loss in the same period in 2021. During the three months ended March 31, 2022, we used $7.9 million in cash for investing activities, of which $71.1 million related to proceeds from sales and maturities of marketable securities, offset by the reinvestment of $31.2 million in marketable securities, and $31.5 million of investments in our capital projects, including $18.3 million in the NW Iowa RNG project, $9.6 million in the Net-Zero 1 project, as well as $3.2 million in development projects at Agri-Energy and Gevo.   Webcast and Conference Call Information Hosting today’s conference call at 4:30 p.m. EST (2:30 p.m. MST) will be Dr. Patrick R. Gruber, Chief Executive Officer, L. Lynn Smull, Chief Financial Officer, Dr. Chris Ryan, Chief Operating Officer, Heather Manuel, Vice President – Investor Relations & Communications and John Richardson, Director of Investor Relations. They will review Gevo’s financial results and provide an update on recent corporate highlights . To participate in the conference call, please dial 1 (833) 729-4776 (inside the U.S.) or 1 (830) 213-7701 (outside the U.S.) and reference the access code 2251249# or through the event weblink https://edge.media-server.com/mmc/p/rkzfqmut A replay of the call and webcast will be available two hours after the conference call ends on May 9, 2022. To access the replay, please dial 1 (855) 859-2056 (inside the U.S.) or 1 (404) 537-3406 (outside the U.S.) and reference the access code 2251249#. The archived webcast will be available in the Investor Relations section of Gevo’s website at www.gevo.com. 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 potential to yield net-zero greenhouse gas emissions when measured across the full lifecycle 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 lifecycle). 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 Argonne National Laboratory GREET model is the best available standard of scientific based measurement for life cycle inventory or LCI. Learn more at Gevo’s website: www.gevo.com 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, including, without limitation, our financial condition, our results of operation and liquidity, our business development activities, our Net-Zero Projects, our RNG Project, the engineering and design work for our projects, our offtake agreements, our plans to develop its business, our ability to successfully construct and finance our operations and growth projects, our ability to achieve cash flow from our planned projects, the ability of our products to contribute to lower greenhouse gas emissions, particulate and sulfur pollution, Verity Tracking development progress, project development costs and other statements that are not purely statements of historical fact These forward-looking statements are made based on 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.     Non-GAAP Financial Information This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), including non-GAAP cash EBITDA loss, non-GAAP adjusted net loss and non-GAAP adjusted net loss per share. Non-GAAP cash EBITDA loss excludes depreciation and amortization and non-cash stock-based compensation from GAAP loss from operations. Non-GAAP adjusted net loss and adjusted net loss per share exclude non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of Gevo’s financial instruments, such as warrants, convertible debt and embedded derivatives, from GAAP net loss. Management believes these measures are useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Gevo’s historical performance as well as comparisons to the operating results of other companies. In addition, Gevo believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision making. Non-GAAP information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP when understanding Gevo’s operating performance. A reconciliation between GAAP and non-GAAP financial information is provided in the financial statement tables below   Gevo, Inc. Condensed Consolidated Balance Sheets Information (Unaudited, in thousands, except share and per share amounts) March 31, 2022 December 31, 2021 Assets Current assets Cash and cash equivalents $                     44,626 $                     40,833 Marketable securities (current)                      265,813                      275,340 Restricted cash (current)                        16,216                        25,032 Accounts receivable, net                            168                            978 Inventories                          2,735                          2,751 Prepaid expenses and other current assets                          5,861                          6,857 Total current assets                      335,419                      351,791 Property, plant and equipment, net                      156,896                      139,141 Long-term marketable securities                        32,724                        64,396 Long-term restricted cash                        70,238                        70,168 Operating right-of-use assets                          2,209                          2,414 Finance right-of-use assets                        26,887                        27,297 Intangible assets, net                          8,656                          8,938 Deposits and other assets                          5,631                          2,331 Total assets $                   638,660 $                   666,476 Liabilities Current liabilities Accounts payable and accrued liabilities $                     13,410 $                     28,288 Operating lease liabilities (current)                            416                            772 Finance lease liabilities (current)                          4,029                          3,413 Loans payable – other (current)                              89                            158 Total current liabilities                        17,944                        32,631 2021 Bonds payable (long-term)                        66,669                        66,486 Loans payable – other (long-term)                            276                            318 Operating lease liabilities (long-term)                          1,838                          1,902 Finance lease liabilities (long-term)                        17,403                        17,797 Other long-term liabilities                              95                              87 Total liabilities                      104,225                      119,221 Stockholders’ Equity Common stock, $0.01 par value per share; 500,000,000 authorized; 201,752,722 and 201,988,662 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.                          2,019                          2,020 Additional paid-in capital                   1,107,051                   1,103,224 Accumulated other comprehensive loss                        (1,587)                           (614) Accumulated deficit                     (573,048)                     (557,375) Total stockholders’ equity                      534,435                      547,255 Total liabilities and stockholders’ equity $                   638,660 $                   666,476   Gevo, Inc. Condensed Consolidated Statements of Operations Information (Unaudited, in thousands, except share and per share amounts) Three Months Ended March 31, 2022 2021 Revenue and cost of goods sold Ethanol sales and related products, net $                        169 $                          — Hydrocarbon revenue                             63                             13 Other revenue                             —                             80 Total revenues                           232                             93 Cost of production                        3,090                           901 Depreciation and amortization                        1,091                        1,093 Gross loss                      (3,949)                      (1,901) Operating expenses Research and development expense (including noncash compensation expense of $0.1 million and $0.5 million, respectively)                        1,192                        1,378 Selling, general and administrative expense (including noncash compensation expense of $1.4 million and $0.5 million, respectively)                        9,367                        3,814 Preliminary stage project costs                           507                        2,727 Other operations (including noncash compensation expense of $0.1 million and nil, respectively)                           589                             — Depreciation and amortization                           351                             58 Total operating expenses                     12,006                        7,977 Loss from operations                    (15,955)                      (9,878) Other income (expense) (Loss) gain from change in fair value of derivative warrant liability                             —                            (53) Interest expense                              (2)                              (5) Interest and dividend income                           252                             31 Other income (expense), net                             32                          (152) Total other income (expense), net                           282                          (179) Net loss $                 (15,673) $                 (10,057) Net loss per share – basic and diluted $                     (0.08) $                     (0.05) Weighted-average number of common shares outstanding – basic and diluted 201,925,747 183,566,524   Gevo, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited, in thousands, except share and per share amounts) Three Months Ended March 31, 2022 2021 Net loss $                 (15,673) $                (10,057) Other comprehensive income (loss) Unrealized gain (loss) on available-for-sale securities, net of tax                          (974)                             — Adjustment for net gain (loss) realized and included in net income, net of tax                               1                             — Total change in other comprehensive income (loss)                          (973)                             — Comprehensive loss $                 (16,646) $                (10,057)   Gevo, Inc. Condensed Consolidated Statements of Stockholders’ Equity Information (Unaudited, in thousands, except share amounts) Common Stock Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Stockholders’ Equity Shares Balance, December 31, 2021 201,988,662 $     2,020 $    1,103,224 $                      (614) $             (557,375) $             547,255 Issuance of common stock upon exercise of warrants 4,677             —                   3                           —                       —                          3 Non-cash stock-based compensation —             —             4,044                           —                       —                   4,044 Issuance of common stock under stock plans, net of taxes (240,617)             (1)               (220)                           —                       —                     (221) Other comprehensive loss —             —                 —                         (973)                       —                     (973) Net loss —             —                 —                           —                (15,673)                (15,673) Balance, March 31, 2022 201,752,722 $     2,019 $    1,107,051 $                   (1,587) $             (573,048) $             534,435 Balance, December 31, 2020 128,138,311 $     1,282 $      643,269 $                        — $             (498,172) $             146,379 Issuance of common stock, net of issuance costs 68,170,579           682         457,008                           —                       —                457,690 Issuance of common stock upon exercise of warrants 1,863,058             18             1,099                           —                       —                   1,117 Non-cash stock-based compensation —             —                562                           —                       —                      562 Issuance of common stock under stock plans, net of taxes (121,499)             (1)                   1                           —                       —                        — Net loss —             —                 —                           —                (10,057)                (10,057) Balance, March 31, 2021 198,050,449 $     1,981 $    1,101,939 $                        — $             (508,229) $             595,691   Gevo, Inc. Condensed Consolidated Cash Flow Information (Unaudited, in thousands) Three Months Ended March 31, 2022 2021 Operating Activities Net loss $                    (15,673) $                   (10,057) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation                          4,258                            925 Depreciation and amortization                          1,442                         1,149 Non-cash lease expense                             139                              17 Non-cash interest expense                          1,150                              — Changes in operating assets and liabilities: Accounts receivable                             810                            435 Inventories                              16                              39 Prepaid expenses and other current assets, deposits and other assets                         (2,317)                        (4,273) Accounts payable, accrued expenses and long-term liabilities                         (2,285)                         4,600 Net cash used in operating activities                       (12,460)                        (7,165) Investing Activities Acquisitions of property, plant and equipment                       (31,218)                        (4,630) Acquisition of patent portfolio                             (10)                              — Proceeds from sale and maturity of marketable securities                        71,082                              — Purchase of marketable securities                       (31,993)                              — Net cash used in investing activities                          7,861                        (4,630) Financing Activities Debt and equity offering costs                              —                      (31,683) Proceeds from issuance of common stock and common stock warrants                              —                      489,373 Proceeds from exercise of warrants                                3                         1,117 Net settlement of common stock under stock plans                           (220)                              — Payment of loans payable – other                           (103)                             (27) Payment of finance lease liabilities                             (34)                              — Net cash provided by financing activities                           (354)                      458,780 Net increase (decrease) in cash and cash equivalents                         (4,953)                      446,985 Cash, cash equivalents and restricted cash at beginning of period 136,033 78,338 Cash, cash equivalents and restricted cash at end of period $                   131,080 $                   525,323   Gevo, Inc. Reconciliation of GAAP to Non-GAAP Financial Information (Unaudited, in thousands, except share and per share amounts) Three Months Ended March 31, 2022 2021 Non-GAAP Cash EBITDA: Loss from operations $                 (15,955) $                   (9,878) Depreciation and amortization                        1,442                        1,149 Stock-based compensation                        4,258                           925 Non-GAAP cash EBITDA $                 (10,255) $                   (7,804) Non-GAAP Adjusted Net Loss:     Net Loss $                 (15,673) $                 (10,057) Adjustments: Gain (loss) from change in fair value of derivative warrant liability                              —                            (53) Total adjustments                             —                            (53) Non-GAAP Net Income (Loss) $                 (15,673) $                 (10,004) Non-GAAP adjusted net loss per share – basic and diluted $                     (0.08) $                     (0.05) Weighted-average number of common shares outstanding – basic and diluted 201,925,747 183,566,524 Investor and Media Contact +1 720-647-9605 [email protected] 1 Cash EBITDA loss is a non-GAAP measure calculated by adding back depreciation and amortization and non-cash stock-based compensation to GAAP loss from operations. A reconciliation of cash EBITDA loss to GAAP loss from operations is provided in the financial statement tables following this release. 2 Adjusted net loss per share is a non-GAAP measure calculated by adding back non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of our financial instruments, such as warrants, convertible debt and embedded derivatives, to GAAP net loss per share. A reconciliation of adjusted net loss per share to GAAP net loss per share is provided in the financial statement tables following this release. 3 Adjusted net loss is a non-GAAP measure calculated by adding back non-cash gains and/or losses recognized in the quarter due to the changes in the fair value of certain of our financial instruments, such as warrants, convertible debt and embedded derivatives, to GAAP net loss. A reconciliation of adjusted net loss to GAAP net loss is provided in the financial statement tables following this release. 4 Cash EBITDA loss is a non-GAAP measure calculated by adding back depreciation and amortization and non-cash stock compensation to GAAP loss from operations. A reconciliation of cash EBITDA loss to GAAP loss from operations is provided in the financial statement tables following this release.

 

Investor & Media Contact: Gevo Inc. 345 Inverness Drive South, Building C Suite 310, Englewood, CO 80112 Phone: +1 720-647-9605 Email: [email protected]

Friday, May 06, 2022

Alvopetro Energy (ALVOF)
April production levels remain on target

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

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

Alvopetro reported April sales volumes of 2,494 barrel of oil equivalent per day (boepd). Results were slightly below March sales volumes of 2,512 boepd and March quarter levels of 2,501 boepd reflecting natural well production declines. Results were slightly above the 2,461 boepd rate we have modeled for the June quarter. The completion of the 182-C1 well in March and the expected completion of the 183-B1 well in May should offset normal well declines and boost overall production going forward.

Alvopetro anticipates announcing 2022-1Q results after market close on May 12th. Management will host a call with investors on May 13th at 10:00 EST. We are expecting revenues of $13.3 million, a 110% annual and 45% sequential increase due mainly to an increase in the price of gas received. We look for EBITDA of $11 million and earnings of $5.9 million ($0.17 per share)….

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. 

Alvopetro Energy (ALVOF) Corporate Presentation from NobleCon18 Research, News and Market Data on Alvopetro Energy NobleCon 18 Complete Rebroadcast

Energy Fuels (UUUU) Corporate Presentation from NobleCon18 Research, News and Market Data on Energy Fuels NobleCon 18 Complete Rebroadcast

InPlay Oil (IPOOF) Corporate Presentation from NobleCon18 Research, News and Market Data on InPlay Oil NobleCon 18 Complete Rebroadcast

Peninsula Energy (PENMF) Corporate Presentation from NobleCon18 News and Market Data on Peninsula Energy NobleCon 18 Complete Rebroadcast

Permex Petroleum (OILCF) Corporate Presentation from NobleCon18 News and Market Data on Permex Petroleum NobleCon 18 Complete Rebroadcast

Vivakor (VIVK) Corporate Presentation from NobleCon18 News and Market Data on Vivakor NobleCon 18 Complete Rebroadcast

Image Credit: Burak Kebapki

Many Reasons to Remain Bullish on the Energy Sector

Do you recall how big tech stocks started to climb dramatically in 2020? Then when many thought they were overdone, they rose even higher in 2021? Well, energy stocks, despite their staggering climb, seem to be having their turn, and there are reasons to believe the sector’s momentum will continue. Just as with the tech sector, they can’t keep rocketing upwards forever, but there are many factors that suggest the run is not yet over.

JP Morgan is quite bullish on the energy sector. In a recent report, they stated, “Energy is the only sector that is seeing its quality, growth, and momentum scores improve simultaneously.” The bank believes that energy stocks remain the best equity investment as commodity prices continue to rise. They point to continued rapid earnings growth. Despite the massive gains in 2021 and year-to-date, they wrote in a research note on Thursday (April 28), there is still room for more upside in energy stocks.

“Energy is the only sector that is seeing quality, growth, and momentum scores improve simultaneously while maintaining an attractive value and income profile,” – Dubravko Lakos-Bujas, Chief U.S. Equity Strategist and Global Head of Quantitative Research, JPMorgan

Energy remains the bank’s highest conviction investment. Commodity prices continue to rise and the underlying fundamentals of companies are improving. Accordingly, the expectation is that a combination of rapid earnings growth and renewed ratings for key multiples will continue to drive the sector.

And while demand remains elevated for commodities, supply could stay constrained due to a rising cost of capital and pressure from ESG policies. “The supply-demand balance continues to be tilted in favor of improving demand with higher commodity prices,” Lakos-Bujas said.

The highly regarded strategist estimates that energy demand will exceed supply by 20% and would require $1.3 trillion in incremental capital to close the gap by 2030. “While investor interest and sentiment has clearly inflected from record lows over the past year, energy stocks are far from pricing in strong and sustainable outlooks for fundamentals and shareholder returns,” the Chief Equity Strategists said.

JPMorgan’s note highlighted that energy remains the “cheapest sector” based on forward-looking earnings and book value. This is despite the sector rising 53% in 2021, and another 38% year-to-date. The energy sector trades at 9.5x forward earnings, which is well below its long-term average multiple of 16.5x.

Noble Capital Markets analysts, in their newsletter,  Energy: First Quarter 2022 Review and
Outlook wrote, “Energy industry fundamentals remain strong. Energy prices are high and show no sign of decreasing. High oil prices, combined with improved operating efficiencies, mean that production companies are facing very favorable returns on their investment. We look for companies to continue reporting strong positive cash flow and to use cash flow to increase drilling and improve balance sheets.”

Take-Away

All rallies eventually come to an end. But analysts seem to be in agreement, the fundamentals, global events, and current valuation make a compelling case for the energy sector. Channelchek is a great resource to review, explore and discover small and microcap energy stocks from green energy, to fossil fuels, and even natural resources used in energy storage or transmission.

Sign up here for Channelchek notifications.

Paul Hoffman

Managing Editor, Channelchek

Suggested Reading

Energy and Global Fundamentals Make a Good Case for Owning Western Uranium Stocks

Exploration and Production Review and Outlook – Noble Capital Markets Energy Sector Review – Q1 2022

Energy Fuels (UUUU) NobleCon18 Presentation Replay

Alvopetro Energy (ALVOF) NobleCon18 Presentation Replay

 

Sources

https://www.channelchek.com/news-channel/Exploration_and_Production_Review_and_Outlook___Noble_Capital_Markets_Energy_Sector_Review___Q1_2022

https://markets.businessinsider.com/news/stocks/stock-market-outlook-energy-best-investment-commodity-prices-oil-gas-2022-5

https://am.jpmorgan.com/sg/en/asset-management/per/funds/global-growth/

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CanAlaska Deals Three Uranium Properties for AUD$15M

Research, News, and Market Data on CanAlaska Uranium

 

Basin Energy to Spend AUD$5M for 60% of Two Uranium Properties and 100% in One Uranium Property

Staged Option to Earn up to 80% Interest in Geikie and North Millennium Projects, Subject to Additional AUD$10M in Spend

Vancouver, Canada, April 27, 2022 – CanAlaska Uranium Ltd. (TSX-V: CVV; OTCQB: CVVUF; Frankfurt: DH7N) (“CanAlaska” or the “Company”) is pleased to announce it has entered into Purchase Option Agreements (“POA”) with Basin Energy Limited (“Basin Energy”), an Australian public limited corporation, to allow Basin Energy to earn up to an 80% interest in CanAlaska’s 100%-owned North Millennium and Geikie projects, and a 100% interest in CanAlaska’s 100%-owned Marshall project. These projects total 50,994.56 hectares in the Eastern Athabasca Basin in Saskatchewan, Canada (the “Projects”) (Figure 1).

Figure 1: North Millennium, Marshall and Geikie Project Location Map

North Millennium and Geikie Projects

Basin Energy may earn up to an 80% interest in each of the North Millennium and Geikie projects by undertaking work and milestone payments in three defined earn-in stages on each project.

• Basin Energy may earn an initial 40% interest (“40% Option”) in each of the projects by paying the Company AUD$33,333.33 cash per project and issuing 6.66% worth of ordinary shares in Basin Energy’s capital structure as at listing on the Australian Securities Exchange (“ASX”) per project within 180 days following execution of a definitive Property Option Agreement (“POA”). Basin Energy will have the right to extend the 40% Option on a month-by-month basis for up to three (3) consecutive months upon payment of an option extension fee of AUD$8,333 per month per project.
• Basin Energy may earn an additional 20% interest (“60% Option”) in each of the projects by incurring AUD$2,500,000 in exploration expenditures per project within 24 months of the ASX listing date.
• Basin Energy may earn an additional 20% interest (“80% Option”) in each of the projects by issuing a further 2,250,000 ordinary shares in Basin Energy per project and incurring an additional AUD$5,000,000 (total: AUD$7,500,000) in exploration expenditures per project within 48 months of the ASX listing date and granting the Company a 2.75% net smelter returns (“NSR”) royalty on all products derived from the claims with a repurchase right of 0.50% NSR for AUD$500,000 at any time commencing from the grant of the 2.75% NSR per project.
• CanAlaska will be operator of the projects through the 60% Option threshold and charge an operator fee.
• Basin Energy will be obligated to keep and maintain the North Millennium and Geikie claims in good standing for a minimum period of one year at all times during the term of the POA.

After successful completion of either of the 40% Option or 60% Option stages of the agreement, and if Basin Energy elects to not enter the final stage, a joint venture will be formed and the parties will co-contribute on a simple pro-rata basis or dilute on a pre-defined straight-line dilution formula. If either party dilutes to a 10% interest, the diluting party will automatically forfeit its interest in the respective project and in lieu thereof will be granted a 2.75% net smelter returns (NSR) royalty on the respective property on all products derived from the claims with a repurchase right of 0.50% NSR for AUD$500,000 at any time commencing from the grant of the 2.75% NSR, except that, this provision will not apply to CanAlaska if CanAlaska has already been granted the 2.75% NSR prior to diluting to a 10% interest.

Marshall Project

Basin Energy may acquire a 100% interest in the Marshall project by:

• Paying the Company AUD$33,333.33 cash and issuing 6.66% worth of ordinary shares in Basin Energy’s capital structure as at listing on the ASX within 180 days following execution of a definitive POA. Basin Energy will have the right to extend the payment period on a month-by-month basis for up to three (3) consecutive months upon payment of an option extension fee of AUD$8,333 per month.
• Granting to the Company a 2.75% net smelter returns (“NSR”) royalty on all products derived from the claims with a repurchase right of 0.50% NSR for AUD$500,000 at any time commencing from the grant of the 2.75% NSR.
• CanAlaska and Basin Energy will enter into an agreement (the “Marshall Project Operator Agreement”), on terms acceptable to both parties, pursuant to which Basin Energy will engage the Company to be the operator of the initial AUD$1,500,000 work program on the property after closing of the transaction. CanAlaska will be entitled to charge Basin Energy an operator fee.

An area of mutual interest will be established that extends two kilometres from the boundary of the North Millennium, Geikie and Marshall claims.

First Programs

The parties will establish a Joint Technical Operating Committee (“JTOC”) under the terms of the Marshall Project Operator Agreement and the POAs relating to the North Millennium and Geikie projects to discuss exploration and development strategies, review and comment on programs and budgets submitted by CanAlaska, as the Operator under the agreements, review the progress and results of activities conducted under the current programs and to discuss other issues in respect to the properties. The final binding decision with respect to establishing programs to be carried out by the Operator (including any changes or amendments to programs) shall be made by Basin Energy. The preliminary work programs and budgets for each project will be laid out for the next 2 years. Once the 40% Option threshold has been met with respect to the North Millennium and Geikie projects, and the 100% Option has been fully exercised with respect to the Marshall project, it is anticipated the first exploration programs under the respective property agreements will be conducted in the last half of 2022.

About Basin Energy Limited

Basin Energy Limited (ACN 655 515 110) is an Australian unlisted uranium exploration and development company incorporated for the purpose of pursuing highly prospective uranium opportunities globally. Basin Energy is backed by a high-quality board and management team with extensive uranium project experience across multiple jurisdictions and a proven track record of value creation. The completion of this transaction is conditional upon Basin Energy listing on the ASX which is indicatively planned for early Q3-CY2022.

CanAlaska CEO, Cory Belyk, comments, “Completion of these definitive agreements with Basin Energy represents a very significant investment into CanAlaska’s uranium portfolio providing multiple discovery opportunities for CanAlaska shareholders on several of our new and highly prospective Eastern Athabasca projects. It has been a real delight to work with the Basin Energy team to bring these projects across another critical threshold. I look forward to the first Basin Energy funded exploration programs.”

Other News

The prior announced Purchase Option Agreements for the Waterbury East and McTavish projects have expired.

About CanAlaska Uranium

CanAlaska Uranium Ltd. (TSX-V: CVV; OTCQB: CVVUF; Frankfurt: DH7N) holds interests in approximately 300,000 hectares (750,000 acres), in Canada’s Athabasca Basin – the “Saudi Arabia of Uranium.”  CanAlaska’s strategic holdings have attracted major international mining companies. CanAlaska is currently working with Cameco and Denison at two of the Company’s properties in the Eastern Athabasca Basin. CanAlaska is a project generator positioned for discovery success in the world’s richest uranium district. The Company also holds properties prospective for nickel, copper, gold and diamonds.

The qualified technical person for this news release is Nathan Bridge, MSc., P.Geo., CanAlaska’s Vice President, Exploration.

For further information visit www.canalaska.com.

On behalf of the Board of Directors

“Peter Dasler”
Peter Dasler, M.Sc., P.Geo.
President
CanAlaska Uranium Ltd.

Contacts:

Peter Dasler, President
Tel: +1.604.688.3211 x 138
Email: [email protected]

Cory Belyk, CEO and Executive Vice President
Tel: +1.604.688.3211 x 138
Email: [email protected]

Neither 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 release.

Forward-looking information

All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements involve numerous assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond the Company’s control. Readers should not place undue reliance on forward-looking statements. Except as required by law, the Company does not intend to revise or update these forward-looking statements after the date hereof or revise them to reflect the occurrence of future unanticipated events.

Energy: First Quarter 2022 Review and Outlook

Noble Capital Markets Energy Sector Newsletter

Source: Capital IQ as of 03/31/2022

Energy Fundamental Data

Source: Energy Information Administration as of 12/31/2021

ENERGY INDUSTRY OUTLOOK

Energy Stocks Remain On A Tear

Energy Stocks Performance

Energy stocks, as measured by the XLE Energy Index, continued their torrid pace rising 41% in the quarter and far outpacing the overall market. The increase reflects higher oil and gas prices during the quarter, much of which can be attributed to the conflict between Russia and Ukraine. That said, investors are growingly accepting the fact that higher prices are not merely related to temporary factors such as Ukraine, supply chain issues, a post-covid economic rebound, or OPEC supply tightening. Instead, there is growing belief that higher prices reflect a fundamental disconnect between the energy demand and supply. Investors no longer talk about domestic supply costs as the factors setting prices instead concentrating on how rising demand will be met until renewable energy is able to have a significant impact on energy demand.

Oil Prices

The run-up in oil prices has been extraordinary virtually doubling in price over the last twelve months. Prices have backed off of highs hit at the beginning of the Ukraine conflict but remain at levels well above that needed for energy companies to make large profits. Brent prices remain approximately $5/bbl. above WTI prices ending the quarter near $108/bbl. Futures prices remain relatively flat declining about a $1 each month going forward. We do not believe $100 oil prices are sustainable and expect increased drilling to eventually lower prices. Nevertheless, we have raised our long-term oil price assumption used in our valuation models to $60 from $50.

Drillers are beginning to react to higher oil prices, but the response has been slow. Active rigs have doubled in the last twelve months but remain below pre-pandemic levels and are only one-third of peak levels in 2015. As the chart below shows, there has been a disconnect between the oil rig count and oil prices in recent years that has become only more exaggerated in recent months with oil prices rising above $100. As indicated previously, we expect drilling activity to continue to increase as long as oil prices remain at current inflated levels. How quickly drilling will increase remains to be seen.

Natural Gas Prices

Natural gas prices have also been exceptionally strong early in the quarter climbing approaching $6/mcf. Much attention has been given to the role domestic gas producers might have in supplying natural gas to Europe to replace gas being received from Russia. The trend towards building liquified natural gas (LNG) export terminals (or reversing import terminals) began years ago. Still, the United States is several years away from increasing its LNG export capacity to a level that could offset Russian imports. That said, the trend will most likely continue creating a favorable outlook for domestic natural gas producers. Interestingly, natural gas prices are higher at the Henry Hub pricing point than most of the country reflecting regional temperature disparities and perhaps a growing trend towards LNG exports.

Storage levels, which entered the winter heating season at high levels, exit the season near historically low levels. Temperatures in the lower 48 states have been colder than normal with the last two weeks in March being significantly colder than normal. As we enter the summer months, there is little to move storage levels back in line. We would expect to enter the next heating season at average to below average storage levels.

Outlook

Energy industry fundamentals remain strong. Energy prices are high and show no sign of decreasing. High oil prices, combined with improved operating efficiencies, mean that production companies are facing very favorable returns on their investment. We look for companies to continue reporting strong positive cash flow and to use cash flow to increase drilling and improve balance sheets. We do not expect companies to raise dividend payments given the cyclical nature of recent oil price trends but would not rule out share repurchases if stock prices do not rebound further. Concerns of industry-wide reductions in lifting costs or a fundamental shift away from carbon-based fuels have gone to the wayside due to a lack of supply response to higher prices. The drilling that is being done is very profitable and that should lead to higher company profits and improved company financials. We believe small energy companies that can expand without drawing attention may be at an advantage.

Source: Michael Heim 01/04/2022; Energy Information Agency (EIA)

Source: Capital IQ as of 03/31/2022

Oil & Gas – Comparable Tables 

Source: Capital IQ as of 03/31/2022

Oil & Gas – LTM Equity Performance 

Source: Capital IQ as of 03/31/2022

Oil & Gas – 2021-4Q Global M&A Activity 

Source: Capital IQ as of 03/31/2022

Power Generation – Comparable Tables 

Source: Capital IQ as of 03/31/2022

Power Generation – LTM Equity Performance 

Source: Capital IQ as of 03/31/2022

Power Generation – 2021-4Q Global M&A Activity 

Source: Capital IQ as of 03/31/2022

Energy Services – Comparable Tables 

Source: Capital IQ as of 03/31/2022

Energy Services – LTM Equity Performance 

Source: Capital IQ as of 03/31/2022

Energy Services – 2021-4Q M&A Activity 

Source: Capital IQ as of 03/31/2022

Mineral Energy – Comparable Tables 

Source: Capital IQ as of 03/31/2022

Mineral Energy – LTM Equity Performance 

Source: Capital IQ as of 03/31/2022

Mineral Energy – 2021 Global M&A Activity 

Source: Capital IQ as of 03/31/2022

LTM Energy – Energy Industry M&A Summary 

Source: Capital IQ as of 03/31/2022

NOBLE QUARTERLY HIGHLIGHTS

Permex Petroleum Corp. (OTCQB:OILCF)

Industry: Energy – Oil and Gas Exploration and Production

Permex Petroleum 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.

1st Quarter News Highlights:

March 28, 2022: The Company announced the closing of a brokered private placement, which resulted in gross proceeds of approximately USD $7.5 million before deducting the placement agent’s fees and other estimated fees and expenses related to the Offering. Each Unit consists of one common share and one common share purchase warrant. Each Warrant will be exercisable into one Share for a period of five years at an exercise price of USD $0.21 per share.

Peninsula Energy Ltd. (OTCQB:PENMF)

Industry:Mineral Energy; Exploration and production

Peninsula Energy Limited (PEN) is an ASX listed uranium mining company which commenced in-situ recovery operations in 2015 at its 100% owned Lance Projects in Wyoming, USA. Peninsula is embarking on a project transformation initiative at the Lance Projects to change from an alkaline ISR operation to a low-pH ISR operation with the aim of aligning the operating performance and cost profile of the project with industry leading global uranium production projects.

1st Quarter News Highlights:

March 28, 2022: Peninsula Energy announced the initiation of an update to the 2018 Low-pH Feasibility Study on its flagship, 100% owned Lance Project (“Lance”) located in Wyoming, USA. The Company is also pleased to announce the selection of Western Water Consultants, Inc. d/b/a WWC Engineering, a leading US-based consulting and engineering firm with significant Uranium In-Situ Recovery (“ISR”) expertise, to author the Study.

Alvopetro Energy Ltd. (OTCQX:ALVOF)

Industry: Energy – Oil & Gas; Exploration and production

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. The company’s strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of their Caburé and Gomo natural gas projects and the construction of strategic infrastructure assets.

1st Quarter News Highlights:

March 17, 2022: The company announced a 33% increase in quarterly dividend to US$0.08/share, payable in cash on April 14, 2022, to shareholders of record at the close of business on March 31, 2022. This dividend is designated as an “eligible dividend” for Canadian income tax purposes. Alvopetro’s cash flows are linked to US dollars and as such, dividends are being paid in US dollars.

Source: Company Press Releases

DOWNLOAD THE FULL REPORT (PDF)

Noble Capital Markets Energy Newsletter Q1 2022

This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this newsletter, please contact >Francisco Penafiel

DISCLAIMER

All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.

Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter

Global Events Seem to have created a Separate Uranium Market for the East and West – Is this an Opportunity?

 

Should investors buy the uranium dip? After reaching a recent high on April 13, spot uranium has come under significant selling pressure. This may be a temporary reaction to lockdowns and restrictions in China related to the country’s zero Covid policy and recent outbreaks. Public companies related to uranium production had reached their highest level since November in April; they have fallen with the price per tonne of the yellow metal.

 

Market Fundamentals

The price for anything goes up and down on two factors, supply and demand – part of demand is speculation. This component of demand is particularly relevant in commodities. Uranium, of course, is a commodity.

Prior to the late April dip, uranium and related companies were experiencing a substantial run-up. The reasons for this were many; in fact, let’s word this are many, because they still exist.

A list worth sharing of reasons to be bullish on uranium was provided on April 20 at NobleCon18 by Peninsula Energy (PENMF). Peninsula is an advanced stage uranium developer, “ready to put pounds in the can, and out to market.” Wayne Heili, who has 30 years of experience in the business, discussed the unfolding trends that explain the enthusiasm for uranium.

 

Corporations involved in uranium production to serve the West followed the price of uranium. The question investors are asking is, does the cheaper entry price create a buying opportunity.

 

The Case for Uranium

Mr. Heili said nuclear is part of the green energy mix that the world is requiring. This mix, the Peninsula CEO pointed out, is splitting into an Eastern and Western-oriented market in terms of who is served. It was explained to the investors present that whether by law or by choice, the utilities that are serving the West are going to stop relying on nuclear fuel from Russia. Western markets are currently characterized as having a supply deficit. There is little or no production, conversion, or enrichment and perhaps not enough fuel fabrication capacity. This, of course, translates into the West needing to create or add capacity to fill the void of not accepting supplies from the East.

We’re now in the part of the nuclear fuel cycle where production will have to be ramped up. Adding to the need is the European Union now recognizes and characterizes uranium as green.

Another catalyst for increased demand and prices is the Sprott Uranium Fund. The investment company’s physical uranium trust is inventorying U308. Material that may never make it to a plant.

The industry has been receiving bi-partisan support from Washington, and national self-reliance has shown its importance when it comes to the supply of energy and other essentials.

Separately at NobleCon18, Mark Chalmers of Energy Fuels (UUUU) spoke about the uranium market and his company. He shared that 20% of electricity produced in the US is from nuclear. The focus on reducing carbon and maintaining or increasing baseload energy has brought about a nuclear renaissance.

Take-Away

While the overall stock market has been trending down this year, energy stocks, including uranium, have been marching much higher. Two weeks ago, Covid fears overseas brought uranium and uranium stocks down to just above their opening at the start of 2022. Is this substantial dip just a blip before they head back up? The energy industry and the uranium sector of that industry are faced with increasing demand. Supplying that demand should increase revenues.

 

Suggested Content

The Good News and Bad News Surrounding US Uranium Self-Reliance

There Seems to be a Perfect Storm in Favor of Uranium Investors

This Firm Facilitates Direct Investment in Physical Uranium

NobleCon18 Peninsula Energy Ltd. Presentation

 

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