Category: Energy

Monday, November 16, 2020

InPlay Oil (IPOOF)(IPO:CA)

The road to normal

As of April 24, 2020, Noble Capital Markets research on InPlay Oil is published under ticker symbols (IPOOF and IPO:CA). The price target is in USD and based on ticker symbol IPOOF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target. 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 OTCQZ Exchange under the symbol IPOOF.

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

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

IPO reported operating and financial results in line with expectations. Production of 3,742 boe/d vs. our 3,871 est. Oil prices were slightly below model ($39.51 vs $43.00) but gas prices were above ($2.32 vs $1.52). Sales of $10.8 mm vs. $10.9 mm. LOE of $14.42 vs. $14.18. Earnings of ($2.7 mm)/($0.04) vs. ($3.2 mm)/($0.05). All in all, a very straightforward quarter.


Other developments were preannounced November 2.  InPlay’s $25 million bank loan is moving forward, a small $1.9 mm tuck-in acquisition closed, 4Q budget includes drilling 3 wells that will move production levels to pre-Covid rates of 5,000 boe/d. Only new development was that a ban on road construction will push drilling and the 5,000 target into the first quarter instead of year end …

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. 

Utility Mergers May Be Reheating After Pausing for the Pandemic

NextEra Energy (NEE) made an all-stock acquisition offer for Evergy (EVRG) earlier this week. It has been reported that Evergy quickly dismissed the $60 per share offer as inadequate. The offer comes after NextEra, the world’s largest wind and solar power producer, was rebuffed in its attempt to acquire Evergy last spring and Duke Energy (DUK) in September. Evergy is under pressure from one of its shareholders, Elliot Management, to consider consolidation.

Merger activity was picking up before the pandemic – Utility merger activity had been increasing steadily between 2012-2016.  Activity remained at a fervid pace in recent years. In 2017 Sempra Energy (SRE) acquired Oncor, the regulated utility unit of TXU. In 2018, Great Plains Energy and Westar Energy merged to form Evergy, Inc. In 2019 Dominion Energy (D) closed its acquisition of SCANA, and Centerpoint Energy (CNP) absorbed Vectren. This year, however, has largely been characterized by merger offers but no agreements.

Merger agreements among regulated assets are difficult to justify – Under cost-of-service rate-making, utility rates are set to recover costs and leave a little leftover to compensate investors. Cost reductions through a merger or other means often face a reduction in rates. Consequently, it is difficult to pay a market premium without it being highly dilutive to earnings without cost savings. Combining noncontiguous service areas limits cost reductions beyond headquarter reductions. Merger savings must come from unregulated operations. Hostile takeovers among utilities are extremely rare because they require regulatory approval. NextEra CEO James Robo said on September 30, 2020, that he would not pursue hostile acquisitions because major deals could only clear regulatory hurdles if companies worked co-operatively.

History of utility mergers – In the nineties, there was a wave of merger activity among utilities. Mergers typically took the form of a large electric utility taking over its neighboring smaller gas utility. The thought process was that the company that owned the meter rights owned the customer. At the time, there was a belief that utilities could use that connection to sell customers unregulated products. Products such as appliance repair service agreements had become popular. In addition, natural gas service was becoming unbundled, allowing customers the ability to buy gas from a third party and then pay the utility solely for the distribution service. Utilities began forming their own unregulated marketing subsidiaries, often with names similar to the regulated utility name. Utilities needed to acquire, merge, or sell out to control enough metered customers to compete. Over time, regulators tightened the rules regarding the sale of unregulated services to utility customers.

Why has merger activity increased? Around the turn of the century, electric utility service also started to become unbundled. Large customers could purchase power from marketers or even self-generate via cogenerations. The shift away from traditional utility operations has continued with the spread of renewable power generation. Utilities like NextEra that have focused on wind generation have seen their stock price soar while utilities stuck with stranded coal generation assets have seen their stock underperform. That has given currency to the winners in the form of a high stock price.

Will merger activity reignite? COVID-19 and the resulting shutdown of the economy have made acquisitions difficult in all industries. Having a good sense of the true cash flow of an asset to acquire is difficult during normal situations and close to impossible under current situations. The fact that companies are even considering making an acquisition is a clear sign that the appetite for acquiring is there. As pandemic concerns began to wane with signs of a possible vaccine, it is reasonable to think that merger activity will pick up again. We look for 2021 to be a busy year for utilities.

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Will M&A Activity Spread to Canada?

Mergers Within the energy Industry are Heating Up

Each event in our popular Virtual Road Shows Series has a maximum capacity of 100 investors online. To take part, listen to and perhaps get your questions answered, see which virtual investor meeting intrigues you here.

Sources:

https://www.forbes.com/sites/greatspeculations/2020/06/21/evergy-inc-the-latest-phase-of-utility-ma/?sh=2c34d7374671, Roger Conrad, Forbes, June 21, 2020

https://www.utilitydive.com/news/nextera-mulls-bid-for-evergy-amid-market-volatility-may-face-competing-off/575675/, Iulia Gheorghiu, Utility Dive, April 8, 2020

https://www.reuters.com/article/us-evergy-m-a-nextera-energy-exclusive/exclusive-nextera-energy-in-15-billion-bid-for-evergy-sources-idUSKBN27P2S8, David French, Reuters, November 9, 2020

Photo: Skyspecs

Wednesday, November 11, 2020

Gevo, Inc. (GEVO)

3Q2020 Capital Raises Enhance Funding Visibility and Project Financing Discussions Progressing

Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

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

Adjusted 3Q2020 EBITDA of $(4.0) million widened versus $(3.1) million in 2Q2020 due to idling Luverne plant, but cash burn dropped. Lower cost structure pushed cash burn down to $3.9 million from $4.7 million. Current 2020 EBITDA loss estimate is $16.7 million and 4Q2020 cash burn should stay in the $4 million range.


Current cash of ~$81 million enhances near-term funding visibility, including repayment of maturing convertible debt.  3Q2020 capital raises of $62 million from equity offerings and $16 million from warrant exercises enhanced the funding visibility and reduced financial risk. Design and engineering (FEED) phase to fully develop/construct the three production plants has started and the influx of cash …

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. 

The First U.S. Small Modular Reactor Design is Sign of the Future for Nuclear Energy

Advancements in nuclear energy will keep it relevant for the foreseeable future. But, cleaner forms of energy are expected to take a larger share of electricity production. According to the U.S. Energy Information Administration’s Annual Energy Outlook 2020, the pivot to greener forms of energy will cause coal-fired and nuclear-powered generation to lose share to renewable and natural gas-fired power sources.

Source: EIA Annual Energy Outlook 2020

Renewable energy’s share of electricity generation is estimated to rise from 19% in 2019 to 38% by 2050. Natural gas, which accounted for 37% in 2019, is expected to provide 36% in 2050. On the losing end, coal-fired and nuclear power generation account for 13% and 12% in 2050, respectively, compared to 24% and 19% in 2019. What the analysis does not consider is progress in nuclear energy technology and the potential for public policies that put a price on carbon emissions.

Major Objections to Nuclear Power

Objections to nuclear power generally center on three issues. First, large-scale nuclear plants are very costly, and there are no incentive systems in place to reward the generation of carbon-free electricity. Second, nuclear power plants generate nuclear waste in the form of radioactive spent fuel, which needs to be safely stored. Third, the potential for a nuclear meltdown, such as what happened at Three-Mile Island in the 1970s, is a risk that many find unacceptable. What may be surprising are the many advancements in technology that may help overcome deep-seated objections and cause policymakers and the public to re-think nuclear power’s value proposition.    

On a bipartisan basis, Congress passed the Nuclear Energy Innovation Capabilities Act in 2018, which promotes public-private partnerships through the U.S. Department of Energy’s Gateway for Accelerated Innovation Nuclear program to accelerate the development of the next generation of nuclear reactors. In 2019, the Nuclear Energy Innovation and Modernization Act was signed into law, which requires the Nuclear Regulatory Commission to develop new processes for licensing nuclear reactors, including staged licensing of advanced nuclear reactors.

Modular Reactors May Be Part of the Solution

NuScale Power and TerraPower are just two examples of companies that are working to advance less-costly, smaller nuclear reactors that produce less nuclear waste and reduce the potential for an accident. NuScale Power, a privately held company, is developing a small modular reactor design using a safer, smaller, scalable version of pressurized water reactor technology. In September 2020, the U.S. Nuclear Regulatory Commission approved the design of NuScale’s small modular reactor which could portend a full design certification in 2021. Privately held TerraPower was founded by Mr. Bill Gates and is a nuclear reactor design company that is developing a class of nuclear reactors using new technologies, including the traveling wave reactor. By using depleted uranium as fuel, the new reactor type offers the potential to reduce nuclear waste, lowers cost, and eliminates the need for reprocessing. Small modular reactors could be paired with and act as a backup to intermittent renewable sources of energy.

Putting a Price on Carbon Emissions

According to the U.S. Department of Energy, nuclear power accounted for 20% of U.S. electric generation in 2019 and 55% of the carbon-free electricity produced. While the issue of nuclear power is controversial, policymakers would be wise to consider it as part of the solution for combatting climate change. While natural gas-fired power plants are thought to be a key part of the energy transition to cleaner energy, they still emit greenhouse gases. Putting a price on carbon emissions through cap and trade programs or a carbon tax could help level the playing field. Currently, utilities that produce energy with coal-fired or natural gas-fired power plants are not penalized for carbon emissions. Likewise, utilities that generate carbon-free energy with more costly nuclear plants are not rewarded. Either levying a direct carbon tax or establishing a market-based cap and trade program could remedy the existing inequity.  

Conclusion

The chorus for cleaner energy is growing stronger. Proposed plans for a clean energy revolution calls for the U.S. to achieve a 100% clean energy economy to reach net-zero emissions no later than 2050. In order to accomplish this goal, the plan would seek to achieve a carbon pollution-free power sector by 2035. While renewables, including wind and solar, play a significant role, policymakers should consider the downsides to these sources of energy, including the issue of intermittency and their footprint. For example, in terms of power density, as measured by watts per square meter, nuclear has a smaller footprint than some renewables, including wind farms. According to the Nuclear Energy Institute, wind farms require up to 360 times as much land area to produce the same amount of electricity as a nuclear facility, while solar photovoltaic facilities required up to 75 times the land area. Besides killing birds, wind farms are unsightly, take up a lot of space, and decommissioned wind turbine blades are difficult to recycle and often end up in landfills. Advanced nuclear reactors could make a significant positive impact toward reaching U.S. and global climate targets between now and 2050. Based on the promise of advanced nuclear technologies, policymakers should also ensure the viability of the entire nuclear fuel supply chain, including domestic production of uranium.

Suggested Reading:

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Virtual Road Show Series – Tuesday, November 10 @ 1pm EST Join Lineage Cell Therapeutics CEO, Brian Culley and CFO, Brandi Roberts for this exclusive corporate presentation, followed by a Q & A session moderated by Ahu Demir, Ph.D., Noble’s Biotechnology Analyst, featuring questions taken from the audience. Registration is free, but attendance is limited to 100. Register Now  |  View All Upcoming Road Shows

Sources:

Annual Energy Outlook 2020, U.S. Energy Information Administration, January 29, 2020.

5 Fast Facts About Nuclear Energy, U.S. Department of Energy, Office of Nuclear Energy, 

TerraPower, Corporate Website, 2020.

NuScale, Corporate Website, 2020.

NRC Approves First U.S. Small Modular Reactor Design, Press Release, Department of Energy, Office of Nuclear Energy, September 2, 2020.

First U.S. Small Nuclear Reactor Design is Approved, Scientific American, Dave Levitan, September 9, 2020.

Nuclear Energy Policy Represents a Bipartisan Path Forward on Climate for the Biden Administration, Atlantic Council, Jennifer T. Gordon, November 7, 2020.

Land Needs for Wind, Solar Dwarf Nuclear Plant’s Footprint, Nuclear Energy Institute, July 9, 2015.

Wind Turbine Blades Can’t Be Recycled So They’re Piling Up in Landfills, Bloomberg, Chris Martin, February 5, 2020.

Photo: NuScale Power modular nuclear power plant (artist rendering)

Thursday, November 05, 2020

Energy Fuels (UUUU)(EFR:CA)

Moving from Concept to Reality

As of April 24, 2020, Noble Capital Markets research on Energy Fuels is published under ticker symbols (UUUU and EFR:CA). The price target is in USD and based on ticker symbol UUUU. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Energy Fuels is the largest uranium producer in the U.S. and holds more production capacity and uranium resources than any other U.S. producer. The Company also produces vanadium. Headquartered in Colorado, Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch ISR Facility in Wyoming, and the Alta Mesa ISR Facility in Texas. The producing White Mesa Mill is the only conventional uranium mill in the U.S. and has a licensed capacity of 8 million pounds of U3O8 per year. Nichols Ranch is in production and has a licensed capacity of 2 million pounds of U3O8 per year. Alta Mesa is currently on standby. Energy Fuels also owns several licensed and developed uranium and vanadium mines on standby and other projects in development.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

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

Expanding the product portfolio. Energy Fuels announced its rare earth strategy in April 2020 with the goal of making minor modifications to its operations to enable the processing of uranium and rare earth ores at its White Mesa Mill. Ores would be sourced from third parties, either through ore purchase, tolling, or other arrangements. Energy Fuels would produce concentrates while also recovering uranium from the ore.


Successful pilot production.  The company announced production of rare earth element (REE) concentrate on a pilot scale at its White Mesa Mill. The concentrate was produced at the mill from one tonne of monazite sands from a North American source. The rare earth elements found in the concentrate include Cerium, Lanthanum, and high value magnet metals Neodymium and Praseodymium (NdPr) oxide which is …

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. 

The Solar Panel Investment Tax Credit Rebate Debate

The solar panel tax incentive has been helping homeowners save on electricity costs. The federal government provides the solar tax credit that allows homeowners and businesses to offset 26 percent of the cost of their solar panel systems. Some states provide additional tax credits. Low-cost solar financing options are available in many states and municipalities — utilities may also provide cash rebates or low-cost financing options that can reduce operating costs by 10 to 20 percent. In exchange, the home or business owner will receive a large reduction in their electric bills, an enhanced property value.  The federal investment tax credit (ITC) was reduced to 26% in 2020 from the initial level of 30%.  It is scheduled to decrease to 22% in 2021 and then goes away completely in 2022. With solar costs falling rapidly, a debate has begun over whether the federal ITC should be extended or allowed to sunset out.

Solar costs are falling

According to the National Renewable Energy Laboratory, the installed price for residential solar systems is less than half of what it was ten years ago. Costs have decreased as production increases, and companies benefit from larger economies of scale. Residential solar systems generally cost $15,000 to $30,000 before incentives and, depending on the size of the system, $10,000 to $25,000 after applying the ITC.   Solar panels require very little maintenance and can be expected to save $2,000-$3,000 per year in electric costs.

Solar energy cost vs. Efficiency over 10-years

Investment returns are attractive but not without subsidies.

Solar energy systems can be expected to return 1.5 to 2.0 times the investment over the 25-year life of the system depending on the location. An investment in a residential solar system will generally provide a payback return of 10-15 years with subsidies. Such a return may not seem attractive compared to other investments, but it is worth noting that many systems are lasting longer than 25 years, thus providing a residual value. The figure below shows the relative cost savings over market prices in the ten largest solar markets.

A Comparison of the cost of electricity per kilowatt-hour by state (Market vs. Solar)

Conclusion

There are many reasons home, or business owners may want to consider adding solar panels. Solar panels are environmentally friendly, add to the home or business’s value, and provide a backup system to the local electric grid.  The return on investment is reasonable if subsidized. Absent subsidies, the investment is harder to justify for financial reasons. Costs may decrease if a 2018 tax on Chinese solar products is removed. Costs may also continue to drop as the industry continues to grow. Large-scale solar and wind farms no longer need subsidization to compete with fossil fuel power generation as costs have decreased with increased economies of scale. The same may be true for small-scale solar panels if tax credits are extended.

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Enjoy Premium Channelchek Content at No Cost

Each event in our popular Virtual Road Shows Series has a maximum capacity of 100 online investors. To take part, listen to and perhaps get your questions answered, see which virtual investor meeting intrigues you here.

Sources:

https://www.energysage.com/solar/cost-benefit/solar-incentives-and-rebates/#:~:text=The%20federal%20government%20provides%20a,solar%20costs%20from%20their%20taxes, energysage, July 15, 2020

https://www.seia.org/initiatives/what-rebates-and-incentives-are-available-solar-energy, SEIA Solar Energy Industries Association

https://www.thesimpledollar.com/save-money/solar-cost-comparison-state-by-state/, Andy Bowen, the simpledollar, May 24, 2018

https://www.solar.com/learn/solar-panel-cost/

https://www.greentechmedia.com/articles/read/solar-pv-has-become-cheaper-and-better-in-the-2010s-now-what

Energy Fuels Produces First Rare Earth Element Concentrate on a Pilot Scale at its White Mesa Mill (Video Link Included)

LAKEWOOD, Colo., Nov. 3, 2020 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”) is pleased to announce that the Company has produced a rare earth element (“REE”) carbonate concentrate (“REE Concentrate”) on a pilot scale at its 100% owned White Mesa Mill (the “Mill”), located near Blanding, Utah. This REE Concentrate was produced using existing infrastructure and technologies at the Mill from a sample of monazite sands from a North American source. Monazite sands are a valuable natural uranium ore, which also contain high concentrations of REEs. The Mill recovered the high concentrations of REEs in the monazite sands, in addition to the contained uranium which will be sold into the nuclear fuel industry. The REE Concentrate produced this weekend is of high purity and is ready to be sent to a separation plant and further downstream REE processing facility for final acceptance test work.

To the Company’s knowledge, this is the first REE Concentrate produced from monazite sands at any significant quantity in North America in over twenty (20) years.

Highlights:

• The Company announced its plan to enter the REE Sector on April 13, 2020.
• In just over six (6) months, the Company has graduated from laboratory scale testing to producing pilot scale REE Concentrate from a one (1) tonne sample of monazite sands mined in North America.
• The Company possesses three (3) tonnes of additional samples of these monazite sands, which it intends to process in the next two months to further refine the process for recovering REEs and uranium from these types of ores.
• This pilot scale testing demonstrates the substantial steps the Company has taken in recent months to re-establish the ability of the U.S. to recover REEs from monazite sands using existing facilities and technologies.
• The Company continues negotiations with various parties to procure sources of monazite sands that can potentially be processed on a commercial scale at the Mill for the recovery of REE Concentrate and uranium.
• The Company is also in ongoing discussions on the possible sale of REE Concentrate produced at the Mill to an REE separation facility.

Mark S. Chalmers, Energy Fuels’ President and CEO, stated:

“This past weekend, Energy Fuels achieved a major milestone in U.S. rare earth element production, when we successfully produced a REE Concentrate from a sample of monazite sands at our White Mesa Mill. Our Company literally accomplished REE production in months, because we utilized existing resources, infrastructure and technologies.

“While it is still early days, and we still have a lot of work to do, this is a proud moment, not just for me, but for the entire Energy Fuels team who has diligently worked on making REE Concentrate production a reality.

“The White Mesa Mill has a long history of recovering other metals along with uranium from uranium ores. Many of our ores from the Colorado Plateau contain vanadium, and the Mill has recovered over 54,000,000 pounds of vanadium as a co-product with uranium from these ores over the life of the Mill, making Energy Fuels the largest conventional vanadium producer in the U.S in recent years. Similarly, the Mill has recovered tantalum and niobium from uranium ores in the past. The recovery of REE Concentrate from monazite sands is no different in concept than the recovery of these other metals. As a result, the Mill is able to recover REEs along with uranium from these monazite sands using existing infrastructure and technologies at the Mill, with only minor routine process adjustments.

“This is the reason we believe we have the potential to enter commercial REE production more quickly and inexpensively than others. By using existing infrastructure and technologies at the Mill to recover the uranium and the REEs from monazite sands, we are able to avoid the years of permitting and development, along with the tens, or even hundreds, of millions of dollars of capital that others would be faced with. Assuming the Company is able to secure adequate quantities of monazite sands, we expect to be in a position to produce commercial quantities of REE Concentrate by early 2021.

“Successful testing at scale also demonstrates the importance of the White Mesa Mill in helping the U.S. re-establish its domestic REE supply chain. While the recovery and management of uranium and other radionuclides is a critical hurdle in REE production for most other facilities, it is a function the White Mesa Mill has performed successfully and responsibly for over 40 years.

We are particularly excited about the potential of our REE project in light of the President’s October 1, 2020 Executive Order on Critical Minerals, which declared a state of emergency to address America’s overreliance on critical minerals from foreign adversaries, including the REE’s, uranium and vanadium that we have the ability to produce at the White Mesa Mill. Furthermore, our work with the U.S. Department of Energy and Penn State on recovering REE’s from coal-based resources is complementary to the commercial REE initiatives discussed in this release.

“Energy Fuels will always, first and foremost, be a uranium producer. We have been the number one uranium miner in the U.S. since 2017, a position we intend to keep for many years to come. However, when other complementary business opportunities arise with the potential to create significant cash flow utilizing our existing facilities and workforce, we will always take a hard look at them with an eye toward building shareholder value.

“We look forward to providing further updates on our REE initiatives in the coming weeks and months as more milestones are reached.”

About Energy Fuels: Energy Fuels is the leading U.S.-based uranium mining company, supplying U3O8 to major nuclear utilities. The Company also produces vanadium from certain of its projects, as market conditions warrant, and is evaluating the potential to recover rare earth elements at its White Mesa Mill. Its corporate offices are near Denver, Colorado, and all of its assets and employees are in the United States. Energy Fuels holds three of America’s key uranium production centers – the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery (“ISR”) Project in Wyoming, and the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8 million pounds of U3O8 per year, and has the ability to produce vanadium when market conditions warrant. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Alta Mesa ISR Project is also on standby and has a licensed capacity of 1.5 million pounds of U3O8 per year. In addition to the above production facilities, Energy Fuels has one of the largest NI 43-101 compliant uranium resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU,” and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR.” Energy Fuels’ website is www.energyfuels.com.

Cautionary Note Regarding Forward-Looking Statements: This news release contains certain “Forward-Looking Information” and “Forward-Looking Statements” within the meaning of applicable United States and Canadian securities legislation, which may include, but are not limited to, statements with respect to: any expectation that the Company will maintain its position as the leading uranium producer in the United States; any expectation that being debt free will allow the Company to better weather market volatility, or allow the Company to increase uranium production when warranted or launch its rare earth element initiative; any expectation that the Company has a number of opportunities or catalysts in front of it which could result in significant cash flows for the Company; any expectation that the Administration and Congress may create a strategic U.S. uranium reserve, or that the Company may be one of the prime beneficiaries of any U.S. government support; any expectation that the recent actions of the U.S. Department of Commerce may reduce uranium and nuclear fuel imports into the U.S. from Russia over the long-term and eliminate the specter of more state-owned uranium imports entering the U.S.; any expectation that President Trump’s recent Executive Orders on critical minerals may be an important step toward the U.S. government providing tangible support and/or funding to producers and processors of critical minerals; any expectation that current spot and term uranium pricing cannot sustain new or existing primary supply; and any expectation that global uranium markets may continue their bounce-back. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans,” “expects,” “does not expect,” “is expected,” “is likely,” “budgets,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” “does not anticipate,” or “believes,” or variations of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur,” “be achieved” or “have the potential to.” All statements herein, other than statements of historical fact, are considered to be forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance of or achievements of the Company to be materially different from any future results, performance, or achievements, express or implied, by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include risks associated with: any expectation that the Company will maintain its position as the leading uranium producer in the United States; any expectation that being debt free will allow the Company to better weather market volatility, or allow the Company to increase uranium production when warranted or launch its rare earth element initiative; any expectation that the Company has a number of opportunities or catalysts in front of it which could result in significant cash flows for the Company; any expectation that the Administration and Congress may create a strategic U.S. uranium reserve, or that the Company may be one of the prime beneficiaries of any U.S. government support; any expectation that the recent actions of the U.S. Department of Commerce may reduce uranium and nuclear fuel imports into the U.S. from Russia over the long-term and eliminate the specter of more state-owned uranium imports entering the U.S.; any expectation that President Trump’s recent Executive Orders on critical minerals may be an important step toward the U.S. government providing tangible support and/or funding to producers and processors of critical minerals; any expectation that current spot and term uranium pricing cannot sustain new or existing primary supply; any expectation that global uranium markets may continue their bounce-back; and the other factors described under the caption “Risk Factors” in the Company’s most recently filed Annual Report on Form 10-K, which is available for review on EDGAR at www.sec.gov/edgar.shtml, on SEDAR at www.sedar.com, and on the Company’s website at www.energyfuels.com. Forward-looking statements contained herein are made as of the date of this news release, and the Company disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or as a result of changes in management’s estimates or opinions, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements. The Company assumes no obligation to update the information in this communication, except as otherwise required by law.

SOURCE: Energy Fuels Inc.

For further information: Energy Fuels Inc., Curtis Moore – VP – Marketing & Corporate Development, (303) 974-2140 or Toll free: (888) 864-2125, investorinfo@energyfuels.com,
www.energyfuels.com

Tuesday, November 03, 2020

InPlay Oil (IPOOF)(IPO:CA)

IPO finalize lending facility, announces small tuck-in acquisition, details 4Q cap spend

As of April 24, 2020, Noble Capital Markets research on InPlay Oil is published under ticker symbols (IPOOF and IPO:CA). The price target is in USD and based on ticker symbol IPOOF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target. 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 OTCQZ Exchange under the symbol IPOOF.

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

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

InPlay entered into definitive agreements for a $25 million non-revolving four-year loan. IPO previously announced that it had come to terms on the low-interest loan. We believe the loan was a significant development for the company and will provide the liquidity needed to withstand low oil prices.


IPO makes a $1.9 million acquisition in the Pembina basin.  The acquisition is small but a good positive indication of management’s interest in the area. The acquisition adds production (up 5%) and drilling acreage. Cost is reasonable and should add to cash flow at current energy prices …

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. 

Monday, November 02, 2020

Energy Fuels (UUUU)(EFR:CA)

Modestly Wider Loss Than Expected; Webcast on November 3

As of April 24, 2020, Noble Capital Markets research on Energy Fuels is published under ticker symbols (UUUU and EFR:CA). The price target is in USD and based on ticker symbol UUUU. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target.

Energy Fuels is the largest uranium producer in the U.S. and holds more production capacity and uranium resources than any other U.S. producer. The Company also produces vanadium. Headquartered in Colorado, Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch ISR Facility in Wyoming, and the Alta Mesa ISR Facility in Texas. The producing White Mesa Mill is the only conventional uranium mill in the U.S. and has a licensed capacity of 8 million pounds of U3O8 per year. Nichols Ranch is in production and has a licensed capacity of 2 million pounds of U3O8 per year. Alta Mesa is currently on standby. Energy Fuels also owns several licensed and developed uranium and vanadium mines on standby and other projects in development.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

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

Third quarter 2020 results. UUUU reported a 3Q loss of $8.9 million, or $(0.08) per share, compared to a loss of $6.9 million, or $(0.07) during the prior year period and our estimate of a loss of $6.9 million, or $(0.06) per share. The variance to our estimate was largely due to lower revenue and higher standby costs. The company had no sales of uranium or vanadium and all revenue was generated from processing ore received from a third-party uranium mine. Energy Fuels will host a webcast on Tuesday, November 3 at 4:00 pm ET to discuss quarterly results and give an update on the company’s plans and outlook.


Updating estimates.  We have revised our 2020 estimate to a loss of $(0.28) per share from $(0.25) to reflect 3Q results and lower revenue. It is difficult to forecast forward earnings given a range of outcomes based on potential actions arising from the U.S. Nuclear Fuel Working Group (NFWG) recommendations, including potential government purchases of uranium for a reserve, which could have a …

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. 

The Latest Marriage Between Two Oil Giants

Mergers and acquisitions in the energy industry are on the rise, and they’re beginning to pick up among Canadian oil companies. Cenovus Energy Inc. agreed to acquire Husky Energy Inc. in a C$3.8 billion all-stock deal that will create the third-largest energy company in Canada. The merger combines two of the largest oil producers in Canada’s oil-sands industry. The acquisition follows the completion of Canadian Natural Resource’s acquisition of Painted Poney Energy Ltd earlier in the month and the recent merger announcements by Whitecap Resources and Manulife Financial NAL Resources.  Waterous Energy Fund acquired Pengrowth Energy Corp in November 2019 and a 45% stake in Osum Production Corp in August.

The announcement follows several recent merger announcements involving companies active in the Permian Basin.  These include ConocoPhillips buying Concho Resources, Chevron buying Noble Energy, and Devon Energy buying WPX Energy. In previous reports, we have discussed the need for energy companies to adapt to a lower oil price environment by cutting costs. Western Canadian oil prices have been depressed since 2014. Combining operations is one of the quickest and easiest ways to cut costs. As companies lower costs through mergers, other companies are forced to follow suit to remain competitive. Cenovus CEO Alex Pourbaix indicated, “I think we’re going to see more continued consolidation.” 

Source: The Narwhal, Alberta Government

The Cenovus-Husky merger will greatly enhance Cenovus’s downstream refining capability and lead to C$1.2 billion in savings, according to company management. Cenovus and Husky management claim they will be able to break-even at $36 a barrel for WTI crude, with that number falling to $33 by 2023.  The current WTI oil price is near $38 per barrel. Management believes the combined company will be cash-flow positive.

The impact of COVID-19 was significant for oil sand producers. However, the future remains positive. HIS Mankit expects oil-sand production to rebound sharply when the pandemic eases and to grow 33% over the next ten years. The optimism for production growth comes from the area’s low extraction costs.  Many drilling projects cost well below $20 per barrel to extract.

Analysts are also encouraged that prices will improve.  Several oil pipelines are scheduled to be completed in the next few years that could ease transmission bottlenecks that have hampered oil prices at the wellhead.

The list of oil-sand companies is long. The largest companies include Suncor Energy, Canadian Natural Resources, Cenovus Energy, ConocoPhillips, ExxonMobil, Shell, and PetroChina. These companies have the financial strength and backing of creditors to withstand temporary dips in oil prices.  It is the smaller oil producers that are coming under pressure. Smaller producers include Athabasca Oil, MEG Energy, OSUM, Laricina Energy, Sunshine Oilsands, and Imperial Oil. Adam Waterous, CEO of the Waterous Energy Fund, believes, “the 20,000-barrel-day producer in Western Canada is an endangered species.”

Suggested Reading:

Mergers Within the
energy Industry are Heating Up

Mergers Within the Permian Basin are Heating up

Energy Stock Prices Have Led to Higher Dividend Yields

Each event in our popular Virtual Road Shows Series has a maximum capacity of 100 investors online. To take part, listen to and perhaps get your questions answered, see which virtual investor meeting intrigues you here.

Sources:

https://finance.yahoo.com/news/cenovus-energy-combine-husky-23-115745760.html, Simon Casey and Robert Tuttle, Bloomberg, October 26, 2020

https://www.cbc.ca/news/canada/calgary/cenovus-husky-energy-deal-1.5776221, Tony Seskus, CBC News, October 25, 2020

http://paramount.mediaroom.com/2020-10-01-Paramount-Resources-Ltd-Acquires-Common-Shares-of-NuVista-Energy-Ltd, Paramount Resources, September 30, 2020

https://www.ft.com/content/9042d463-db0e-4dc8-8c46-c71cce98e7b9, Derek Brower, Financial Times, April 7, 2020

https://insideclimatenews.org/news/12042018/tar-sands-oil-pipeline-protests-canada-first-nations-kinder-morgan-trans-mountain-economics, Nicholas Kusnetz, Inside Climate News, April 13, 2018

https://www.ran.org/list-tar-sands-companies/, Banking on Climate Change: Fossil Fuel Finance Report Card 2017

https://financialpost.com/commodities/energy/endangered-species-canadian-small-oil-and-gas-companies-under-pressure-from-impatient-bankers-to-find-partners-or-sell-out, Geoffrey Morgan, Financial Post, September 4, 2020