Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo is a play on growing vanadium demand. We believe Largo, Inc. offers investors an attractive way to play an expected growth in the demand for vanadium due to its use in large-scale energy storage. Largo is the largest producer of vanadium outside of China and Russia. The high vanadium concentration of is Maracas Menchen Mine in Brazil makes Largo one of the lowest-cost producers of vanadium in the world.
Largo is involved with vanadium batteries. In addition to mining vanadium, Largo has formed a division to manufacture and install Vanadium Redox Flow Batteries (VRFB). VRFBs have key advantages over other battery types in terms of scalability, cost, and safety making them ideal for grid operations. VRFB can store energy for months and have operating duration periods of 6-10 hours. Vanadium used in VRFBs has little degradation and can be recovered and reused upon recycling.
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*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.
CALGARY, AB, Feb. 6, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces January 2023 sales volumes, our February 1, 2023 natural gas price redetermination, our 2023 capital plan and an operational update.
President and CEO, Corey Ruttan commented:
“Building on our record year in 2022 we are looking forward to our 2023 capital plan. Our focus this year is on adding production and reserves from our lower risk development opportunities. We have made the key infrastructure investments necessary to realize the full potential from our Murucututu natural gas project. This project has significant reserves and resources and our goal is to unlock this potential with a multi-year development plan starting this year.”
January 2023 sales volumes
January sales volumes averaged 2,754 boepd, including natural gas sales of 15.6 MMcfpd, associated natural gas liquids sales (condensate) of 141 bopd, and 5 bopd of oil sales, based on field estimates, a 1% increase from our Q4 average daily volumes.
Operational Update and 2023 Capital Plans
Murucututu (100% Alvopetro)
On our Murucututu project, we expect to commence the stimulation on our 197(1) well later this quarter. We have already completed the work to tie-in this well to our 183(1) facility and expect to commence production in the second quarter. We also plan to drill two “fit-for-purpose” Gomo development wells in 2023. One of these locations has additional uphole exploration potential in the Caruaçu and Marfim Formations. Total capital expenditures of $16 million are budgeted for Murucututu in 2023.
Caburé (49.1% Alvopetro)
Our 2023 capital budget includes an expansion of the unit facilities and drilling two additional development wells. Total expenditures of $3 million are budgeted for Alvopetro’s share of 2023 capital expenditures on our Caburé project.
Bom Lugar (100% Alvopetro)
In 2023, we plan to drill up to two development wells on our Bom Lugar oil field, targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations. Capital expenditures of up to $11 million are budgeted in 2023 for Bom Lugar, including the development wells and facility upgrades.
Mãe-da-lua (100% Alvopetro)
2023 capital expenditures include $0.5 million at our Mãe-da-lua field where we plan to complete a stimulation of our existing well to improve oil recovery rates.
Exploration (100% Alvopetro)
In 2022, Alvopetro drilled two exploration prospects, 182-C, and 183-B. We encountered thick, hydrocarbon saturated zones in the Sergi Formation which have demonstrated low permeability during testing operations. Alvopetro continues to evaluate alternatives to enhance permeability in the Sergi Formation in both wells and in the Agua Grande Formation of the 183-B1 well. We are evaluating alternatives to remediate possible permeability impacts from near wellbore damage. This work is expected to start with the 182-C2 well later this quarter. Capital costs of $0.4 million are currently budgeted on these projects in 2023, including final testing costs on 182-C2 incurred in January. Future capital expenditures will depend on these initial results.
Semi-Annual Natural Gas Price Redetermination
Effective February 1, 2023, our natural gas price under our long-term gas sales agreement with Bahiagás has been adjusted to BRL2.00/m3 or $11.88/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10). This price represents an increase of 3.6% from our prior contracted price and will be effective for natural gas sales from February 1 to July 31, 2023. Including recently approved and enhanced sales tax credits, our realized gas price, net of sales taxes, is expected to be $12.40/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10).
Alvopetro Energy Ltd.’svision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.
Abbreviations:
bbls
=
barrels
boepd
=
barrels of oil equivalent (“boe”) per day
bopd
=
barrels of oil and/or natural gas liquids (condensate) per day
BRL
=
Brazilian real
m3
=
cubic metre
Mcf
=
thousand cubic feet
MMcf
=
million cubic feet
MMcfpd
=
million cubic feet per day
BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning plans relating to the Company’s operational activities, proposed exploration and development activities and the timing for such activities, capital spending levels and future capital costs, and the expected natural gas price, gas sales and gas deliveries under the Company’s long-term gas sales agreement. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, the performance of producing wells and reservoirs, well development and operating performance, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, foreign exchange rates, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
CALGARY AB, Feb. 1, 2023 /CNW/ – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to confirm that its Board of Directors has declared a monthly cash dividend of $0.015 per common share payable on February 28, 2023, to shareholders of record at the close of business on February 15, 2023. The monthly cash dividend is expected to be designated as an “eligible dividend” for Canadian federal and provincial income tax purposes.
About InPlay Oil Corp.
InPlay is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.
SOURCE InPlay Oil Corp.
For further information: Doug Bartole, President and Chief Executive Officer, InPlay Oil Corp., Telephone: (587) 955-0632; Darren Dittmer, Chief Financial Officer, InPlay Oil Corp., Telephone: (587) 955-0634
ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.
Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Quarterly cash distribution increased 40%. For the December 2022 quarter, ARLP unit holders will receive a cash distribution of $0.70 per unit, or $2.80 on an annualized basis, payable on February 14, 2023 to unit holders of record as of the February 7, 2023 close. The announced distribution represents a 180% increase over the cash distribution of $0.25 per unit for the quarter ended December 31, 2021 and a 40% increase over the cash distribution of $0.50 per unit for the quarter ended September 30, 2022. We had assumed the quarterly cash distribution would be increased to $0.55.
Fourth quarter and full year 2022 financial results. ARLP will report financial results for the fourth quarter and full year 2022 before the market opens on Monday, January 30, 2023. Management will host a conference call for investors at 10:00 am ET on the same day.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production from first drilled well is coming. The Eoff PPC #3 well in the Breedlove Field was completed in October and is going through a Flowback Recovery Period (removal of liquids). It was shut down due to freezing temperatures. Management expects full production by the end of February and will disclose flow rates then. The company hinted that it will probably go forward with converting the well to a horizontal well at an additional $1.1 million cost.
Cash is tight. Permex’s cash position is down to $2.5 million, not enough to drill another well. The company is opposed to taking on debt (which we agree with) because debt is the Achilles heel of start-up energy companies should energy prices decline. The company discussed selling acreage but indicated that it neither has a large contiguous field to sell (outside of its Breedlove Field position) nor does it have small, producing property that might be of interest to energy companies. Management would like to issue stock but not at the current stock price of 4% of net asset value.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production slows. Management projects 2022 production of 9,100-9,200 BOE/d versus 11/9/22 guidance of 9,150-9,400. Downtime at a third party gas facility led to a 435 BOE/d decrease in production. Cold weather also delayed getting wells on line. We have reduced our estimate to 9,162 BOE/d from 9,280. The company projects 2023 production of 9,500-10,000 BOE/d down from 9,900-10,400. We have lowered our forecast to 10,000 BOE/d from 10,400 to be within management’s guidance. We are comfortable being at the upper end of guidance given InPlay’s history of surpassing guidance (until the most recent quarter).
Expenditures rise. The company projects 2022 capital expenditures of C$76-78 million up from C$70-72 million due the acceleration of a drilling program. 2023 capital expenditure guidance increased to C$75-80 million (versus C$69-71 million) despite the drilling of 0.5 net wells less than previously assumed. Management attributes the higher capital expenditures mainly to two gas facility upgrades but also notes that it plans to drill longer wells in 2023 than in 2022.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
CALGARY, AB, Jan. 18, 2023 /CNW/ – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to announce it has been named to the 2023 OTCQX® Best 50, a ranking of top performing companies traded on the OTCQX Best Market last year.
The OTCQX Best 50 is an annual ranking of the top 50 U.S. and international companies traded on the OTCQX market. The ranking is calculated based on an equal weighting of one-year total return and average daily dollar volume growth in the previous calendar year. Companies in the 2023 OTCQX Best 50 were ranked based on their performance in 2022.
Doug Bartole, President and Chief Executive Officer of InPlay, commented: “We are very pleased with InPlay’s inclusion in the OTCQX Best 50 list. InPlay was the fifth best performer on the OTCQX Best Market based on 2022 total return and average daily dollar volume growth and this is the second consecutive year placing in the top five on this list. This ranking is a stong acknowledgement of the value we have created for shareholders through measured per share growth, free adjusted funds flow generation and delivering sustainable returns to shareholders. It is also evidence of the commitment of our employees and management team, strong leadership from our board of directors and the support of our lenders and shareholders. As outlined in our recently announced 2023 capital budget and guidance, InPlay finds itself in an extremely enviable financial and operational position allowing the Company to continue to forecast strong results in the upcoming year.”
The OTCQX Best Market offers transparent and efficient trading of established, investor-focused U.S. and global companies. To qualify for the OTCQX market, companies must meet high financial standards, follow best practice corporate governance, and demonstrate compliance with applicable securities laws.
About InPlay Oil Corp.
InPlay is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF. Additional information about the Company and our latest corporate presentation can be found on InPlay’s website at www.inplayoil.com.
SOURCE InPlay Oil Corp.
For further information: Doug Bartole, President and Chief Executive Officer, InPlay Oil Corp., Telephone: (587) 955-0632; Darren Dittmer, Chief Financial Officer, InPlay Oil Corp., Telephone: (587) 955-0634
CALGARY, AB, Jan. 6, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces record sales volumes in December 2022 and an operational update.
December 2022 sales volumes
December sales volumes averaged 2,785 boepd, including natural gas sales of 15.9 MMcfpd and associated natural gas liquids sales from condensate of 125 bopd, and 15 bopd of oil sales, based on field estimates, a 4% increase from our November 2022 average daily volumes. Our sales volumes averaged 2,724 boepd in the fourth quarter of 2022, an increase of 3% from the third quarter of 2022.
Operational Update
We have completed testing our 182-C2 well on our 100% owned and operated Block 182. We completed drilling the 182-C2 well in October to a total measured depth (“MD”) of 3,185 metres. As previously announced, based on open-hole wireline logs, the well encountered a 223.7-metre-thick section with 121.3 metres of sand estimated above 6% porosity in the sand-dominated interval between 2,704.1 and 2,927.8 metres total vertical depth in the Sergi Formation. The well also encountered 10.9 metres of potential net hydrocarbon pay in the Agua Grande Formation, with an average porosity of 8.9% and average water saturation of 25.1%, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off. During testing operations of the Sergi and Agua Grande Formations we recovered non-commercial amounts of oil and natural gas. These results indicate lower than anticipated permeability and we are evaluating alternatives to remove any near well bore formation damage and reservoir stimulations to enhance permeability in the Agua Grande and Sergi Formations in this well, and the Sergi Formation in our 183-B1 well.
Alvopetro Energy Ltd.’svision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.
Abbreviations:bbls = barrelsboepd = barrels of oil equivalent (“boe”) per daybopd = barrels of oil and/or natural gas liquids (condensate) per dayMMcf = million cubic feetMMcfpd = million cubic feet per day
BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Testing and Well Results. Data obtained from the 182-C2 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities and initial testing data, should be considered to be preliminary until detailed pressure transient and other analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 182-C2 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.
Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning potential hydrocarbon pay in the 182-C2 well, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro’s testing and operational activities. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results of the 183-B1 well and the 182-C2 well, equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the bottom of the report for important disclosures
Energy Stocks Were Strong. Energy stocks rose 21.5% in the fourth quarter far outpacing a 7.1% rise for the S&P 500 Index. For the year, energy stocks were up an impressive 57% versus a 20% decline in the overall market. The strength can largely be attributed to rising energy prices, although we would note that energy prices have largely leveled out after a strong first half of the year.
Oil prices are near $80. Near month oil future contracts are now almost $80 per barrel, below peak prices but significantly higher than historic prices. At $80 per barrel, most energy companies are very profitable and generating significant excess free cash flow. Despite the favorable economics, energy companies have been slow to drill new wells, and modest production increases have come mainly from improved efficiencies. In addition, there is a growing belief that OPEC’s spare capacity is declining questioning its ability to meet demand increases. As time passes, $80 oil is starting to feel like the new equilibrium level with $40-$60 oil prices a thing of the past.
Gas prices are rising even more than oil prices. Natural gas prices have risen steadily over the last two years even as production levels have been steady. Storage levels, which were running below historical levels, have improved in recent months.
Energy industry fundamentals remain strong. Oil and gas prices are near historical highs and above the levels assumed in our financial and valuation models. Energy company cash flow generation is high, and companies are facing the envious position of trying to decide what to do with the cash. Debt levels have been pared down and managements have been raising dividend levels and repurchasing shares. Drilling is increasing but at a controllable pace that doesn’t seem likely to put prices into a downcycle. We believe the case for smaller cap energy stocks is especially strong. If our belief that a world-wide recession is already factored into energy prices is correct, small cap energy companies will be in the best position to take advantage of any price increase.
Energy Stocks
Energy stocks, as measured by the XLE Energy Index, rose sharply in the most recent quarter after logging in a flat third quarter. In the fourth quarter, energy stocks rose 21.5% far outpacing a 7.1% rise for the S&P 500 Index. For the year, energy stocks were up an impressive 57% versus a 20% decline in the overall market. This year’s strong performance comes after last year’s 50% rise. The strength can largely be attributed to rising energy prices, although we would note that energy prices have largely leveled out after a strong first half of the year.
Oil Prices
Oil prices rose steadily over a two-year period beginning the spring of 2020. WTI prices peaked at $120 per barrel in the first week of June. Prices declined in the third quarter but seem to have leveled off in recent months. Near month oil future contracts are now almost $80 per barrel, below peak prices but significantly higher than historic prices. At $80 per barrel, most energy companies are very profitable and generating significant excess free cash flow. As time passes, $80 oil is starting to feel like the new equilibrium level with $40-$60 oil prices a thing of the past.
Figure #1
Despite the favorable economics, energy companies have been slow to drill new wells. U.S. rig count, as reported by Baker Hughes, crept up to 779 rigs by the end of the year. This compares to a peak level of 1,600 in 2014. The disparity between increased profitability and increased capital expenditures is shown in the chart below. Operating cash flow has soared over the last two years, but capital expenditures have barely increased. The result has been a large increase in dividend payments, share repurchases and debt reduction.
Figure #2
While capital expenditures have not increased in line with cash flow, it would be unfair to say that oil production has not increased. Indeed, current production levels are above that during peak drilling periods in 2014. The implication is that drilling has become more productive. While drilling advances such as the use of horizontal drill and fracking in shale deposits may be old hat, it is worth noting that drillers have been refining drilling techniques for individual drilling locations. Drillers continue to perfect the ideal number of fracking targets and the materials used to frack. In addition, as we discussed in our September quarter comments, there has been a sharp increase in the number of well recompletions, which are less expensive to complete but not a long-term solution.
Figure #3
Meanwhile, OPEC has been increasing production in recent years after making sharp reductions during the COVID years. However, there are growing concerns that OPEC’s overall capacity is declining and that its spare capacity has consequentially declined. If this is indeed true, OPEC’s ability to fulfill increased demand for oil may be limited. This would bode well, not only for oil prices, but for the role domestic producers will have in meeting demand.
Figure #4
Natural Gas Prices
The chart below shows natural gas prices against production levels. As the chart shows, natural gas prices have risen steadily over the last two years even as production levels have remained steady. To that extent, natural gas prices are acting like oil prices. Natural gas prices tend to track oil prices but with a few distinctions. Natural gas demand and supply is less global than oil. Imports (and now exports) of liquefied natural gas represent a small portion of domestic supply and demand. Secondly, natural gas is used primarily for space heating. That means demand is more seasonal. It also means demand can be affected by weather conditions. On the other hand, natural gas demand is less affected by general economic conditions than oil.
Figure #5
Storage levels, which were running below historical levels, have improved in recent months. We would note that the most recent storage numbers do not reflect the cold snap across the country during the last week of the year. Cold temperatures may send storage levels lower than is reflected in the chart below.
Figure #6
Outlook
Energy industry fundamentals remain strong. Oil and gas prices are near historical highs and above the levels assumed in our financial and valuation models. Energy company cash flow generation is high, and companies are facing the envious position of trying to decide what to do with the cash. Debt levels have been pared down and managements have been raising dividend levels and repurchasing shares. Drilling is increasing but at a controllable pace that doesn’t seem likely to put prices into a downcycle.
We believe the case for smaller cap energy stocks is strong. Major oil companies are facing increasing pressure to focus on renewable energy instead of producing more carbon-based fuel. Smaller cap energy companies are less tethered and often able to acquire and exploit properties being ignored by the majors. If our belief that a world-wide recession is already factored into energy prices is correct, small cap energy companies will be in the best position to take advantage of any price increase.
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Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.” FINRA licenses 7, 24, 63, 87
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Energy Fuels is a leading U.S.-based uranium mining company, supplying U3O8 to major nuclear utilities. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up commercial-scale production of REE carbonate. Its corporate offices are in Lakewood, Colorado, near Denver, and all 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, has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores. 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 also 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.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
The sales, along with recently signed utility contracts, will generate cash flow as UUUU starts up operations. Congress allocated $75 million to establish a national uranium security reserve in its 2020 budget. The US Energy Secretary indicated earlier that it expects to make four individual awards of 100,000-500,000 pounds of U3O8 for a total of 1 million pounds. Energy Fuels, as the largest licensed producer of uranium, was in a good position to receive one of the rewards. The UUUU announcement did not indicate a volume level. Peninsula Energy announced that it received an award for 300,000 pounds but did not specify a sales amount.
The sales can be done right away before mining operations are restarted. The conditions of the DOE award state that the uranium must be physically located at Honeywell’s conversion facilities in Metropolis, IL. Energy Fuels currently holds about 610,000 pounds of U3O8 at Metropolis worth more than $30 million at current uranium spot prices. A volume awards similar to that for Peninsula seems reasonable implying that the DOE is paying a price near $60/lb. or slightly above current spot prices, and be well within current inventory levels.
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*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.
DOE program supports critical domestic clean energy & national security priorities
Pending membership in DOE HALEU Consortium to support fuel for next generation advanced nuclear reactors
LAKEWOOD, Colo., Dec. 16, 2022 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”), a leading U.S. producer of uranium and rare earth elements (“REE“), today announced that it has been awarded a contract to sell $18.5 million of natural uranium concentrates (“U3O8“) to the U.S. government for the establishment of a strategic uranium reserve (the “Uranium Reserve“). The U.S. National Nuclear Security Administration (“NNSA“), an office within the U.S. Department of Energy (“DOE“), is the agency tasked with purchasing domestic U3O8 and conversion services for the Uranium Reserve. The Uranium Reserve is intended to be a backup source of supply for domestic nuclear power plants in the event of a significant market disruption. Additionally, the Company announced its application for membership in the DOE’s newly created HALEU Consortium.
Uranium Reserve Award:
Energy Fuels expects to complete the sale of uranium for the Uranium Reserve to NNSA during Q1-2023 and realize total gross proceeds of $18.5 million. The U3O8 the Company expects to sell to the U.S. government is currently held in the Company’s inventory at the Metropolis Works Conversion Facility, located in Metropolis, Illinois. The sale does not involve the physical movement of material, so the sale and transfer can be completed quickly.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “Energy Fuels is pleased to contribute to U.S. energy security by supplying U.S.-origin uranium to the U.S. uranium reserve. Russia’s invasion of Ukraine has highlighted America’s troubling dependence on Russia and its allies for our nuclear fuel and uranium supply, and the need for the U.S. to rebuild its uranium and nuclear fuel capabilities. Today, nuclear energy provides the U.S. with roughly 20% of all electricity, and 50% of our clean, carbon-free electricity. U.S. and European nuclear industries are actively working to shift away from Russian uranium supply, but the process will be difficult and lengthy. The U.S. can rely on supply from allies like Canada, Australia and others for a large proportion of our uranium and nuclear fuel supply, but we must also restore our own capabilities. For the past several years, U.S. uranium production has been near-zero and our only uranium conversion facility has been shut-down. The Uranium Reserve is a small, but important, step toward resolving this untenable situation.”
HALEU Consortium:
On December 12, 2022, Energy Fuels also applied for membership in the DOE’s newly created HALEU Consortium. The HALEU Consortium is a program managed by the DOE’s office of Nuclear Energy (“NE“) intended to help create a secure domestic supply of high-assay, low-enriched uranium (“HALEU“) used by many of the next generation of advanced nuclear reactor technologies. HALEU enables many advanced reactor designs to be smaller and more efficient than traditional reactors. The uranium used in traditional nuclear reactors is enriched to roughly 3% – 5% of the fissionable isotope, uranium-235 (“U-235“). HALEU is enriched to between 5% and 20% U-235. Today, only Russian companies are able to supply HALEU, which is causing delays in the development of advanced reactors. For example, TerraPower recently announced a delay in building its first Natrium reactor in Wyoming. TerraPower is a high-profile next generation advanced reactor developer funded by Bill Gates. TerraPower specifically attributed the delay to the lack of availability of HALEU outside of Russia.
As the leading producer of U3O8 in the U.S., and the owner and operator of the only conventional uranium mill in the U.S., Energy Fuels believes it can play an important role in advising the DOE and teaming with other companies for this critical program. Furthermore, Energy Fuels is pursuing other DOE priorities related to uranium production, including rare earth element and medical isotope production.
Mr. Chalmers continued: “Energy Fuels is increasingly recognized by the U.S. government and other market participants as indispensable to weaning the U.S. off of Russian uranium supply, and as a solid partner in other important priorities. Our White Mesa Mill is critical and unique domestic infrastructure, with licenses, expertise and capabilities found nowhere else in the U.S., that are needed to produce uranium, and many other critical minerals and materials. We stand ready to play a critical role in restoring America’s uranium, rare earths, and other critical material capabilities, while reducing our troubling dependence on Russia and China.”
About Energy Fuels: Energy Fuels is a 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, mixed rare earth element carbonate (“RE Carbonate“) from uranium-bearing monazite ores and is ramping up to full commercial-scale production of separated rare earth oxides. Its corporate offices are in Lakewood, Colorado near Denver, and all its assets and employees are in the United States. Energy Fuels holds two of America’s key uranium production centers: the White Mesa Mill in Utah and the Nichols Ranch ISR Project in Wyoming. 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, as well as RE Carbonate from various uranium-bearing ores. The Nichols Ranch ISR Project is currently on standby and has a licensed capacity of 2 million pounds of U3O8 per year. In addition to the above production facilities, Energy Fuels also has one of the largest S-K 1300 and 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 complete the contemplated sale of uranium to the DOE in Q1-2023 or at all; any expectation that the Company will maintain its position as a leading uranium company in the United States; any expectation that the Company will be admitted as a member of the HALEU Consortium or that the Company can play an important role in this critical program; any expectation that the Mill will be successful in producing RE Carbonate and/or separated rare earth element oxides on a full-scale commercial basis or at all; any expectation that the Company will successfully produce radioisotopes to be used for the production of medical isotopes on a commercial basis or at all; any expectation that the Company is increasingly being recognized by the U.S. government and other market participants as an indispensable party in efforts to wean the U.S. off of Russian uranium supply, and a partner in other important priorities; and any expectation that the Company stands ready to play a critical role in restoring America’s uranium, rare earths and other critical material capabilities, while reducing America’s dependence on Russia and China. 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, other than statements of historical fact, herein 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 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: commodity prices and price fluctuations; processing and mining difficulties, upsets and delays; permitting and licensing requirements and delays; changes to regulatory requirements; legal challenges; the availability of feed sources for the Mill; competition from other producers; public opinion; government and political actions; available supplies of monazite sands; the ability of the Mill to produce RE Carbonate to meet commercial specifications on a commercial scale at acceptable costs; the ability of the Mill to separate rare earth oxides to meet commercial specifications on a commercial scale at acceptable costs; market factors, including future demand for rare earth elements; the ability of the Mill to be able to separate radium or other radioisotopes at reasonable costs or at all; market prices and demand for medical isotopes; 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 if management’s estimates or opinions should change, 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: Investor Inquiries: Energy Fuels Inc., Curtis Moore, VP – Marketing and Corporate Development, (303) 974-2140 or Toll free: (888) 864-2125, investorinfo@energyfuels.com, www.energyfuels.com
TULSA, Okla.–(BUSINESS WIRE)– Alliance Resource Partners, L.P. (NASDAQ: ARLP) (“Alliance” or the “Partnership”) announced today that the Board of Directors of its general partner, Alliance Resource Management GP, LLC, has appointed Cary P. Marshall as Senior Vice President and Chief Financial Officer effective April 1, 2023. The appointment follows the Partnership’s previously announced retirement and succession plan for Brian L. Cantrell, current Chief Financial Officer. Mr. Cantrell will remain with Alliance through March 31, 2023, to facilitate an orderly transition.
“We extend our thanks and appreciation to Brian for his leadership, service, and contributions to Alliance over the past 19 years,” said Joseph W. Craft III, Chairman, President and Chief Executive Officer. “Brian played a critical role in the Partnership’s growth and financial strength during his tenure, and we wish him and his family all the best in his retirement.”
“As we transition Brian’s duties and responsibilities, we are fortunate to have a talented, proven, and capable leader like Cary fully-ready to step-in,” added Mr. Craft. “We are confident that Cary’s extensive knowledge of the business coupled with more than three decades of related experience will allow us to maintain our financial discipline and principles while advancing the performance and practices of the organization.”
Mr. Marshall has served as Alliance’s Vice President, Corporate Finance and Treasurer since May 2003. Mr. Marshall joined Alliance’s predecessor entity, MAPCO Inc., in 1989 and has since held multiple positions across corporate finance and marketing. Mr. Marshall is an alumnus of Southern Methodist University, where he received a Bachelor of Business Administration degree and a Master of Business Administration degree.
About Alliance Resource Partners, L.P.
ARLP is a diversified energy company that is currently the second largest coal producer in the eastern United States. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast-growing energy and infrastructure transition.
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission (“SEC”), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7674 or via e-mail at investorrelations@arlp.com.
CALGARY, AB, Dec. 7, 2022 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces November 2022 sales volumes and an operational update.
November 2022 sales volumes
November sales volumes averaged 2,667 boepd, including natural gas sales of 15.2 MMcfpd and associated natural gas liquids sales from condensate of 135 bopd, based on field estimates, a decrease of 2% from the October 2022 average daily volumes and an increase of 1% from our Q3 2022 average.
Operational Update
We have now moved the service rig to our 182-C2 well on our 100% owned and operated Block 182 and expect to commence testing operations shortly. We completed drilling the 182-C2 well in October to a total measured depth (“MD”) of 3,185 metres. Testing of the 182-C2 well will begin with the Sergi Formation, the deepest of two formations with hydrocarbons shows during drilling. As previously announced, the well encountered a 223.7-metre-thick section with 121.3 metres of sand estimated above 6% porosity in the sand-dominated interval between 2,704.1 and 2,927.8 metres total vertical depth in the Sergi Formation. Caliper logs indicate that a significant amount of the wellbore in the Sergi interval contains washouts from drilling and is out of gauge, making open-hole log analysis challenging. As such, hydrocarbon potential in the Sergi will be validated through formation testing. Following testing of the Sergi Formation, testing will proceed up-hole to the Agua Grande Formation where, based on open-hole wireline logs, the well encountered 10.9 metres of potential net hydrocarbon pay, with an average porosity of 8.9% and average water saturation of 25.1%, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cut-off. This testing will assess the extent, if any, of commercial hydrocarbons associated with the well, the productive capability of the well and will help define the field development plan.
Alvopetro Energy Ltd.’svision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.
Abbreviations:
bbls = barrelsboepd = barrels of oil equivalent (“boe”) per daybopd = barrels of oil and/or natural gas liquids (condensate) per dayMMcf = million cubic feetMMcfpd = million cubic feet per day
BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Testing and Well Results. Data obtained from the 182-C2 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities and initial testing data, should be considered to be preliminary until detailed pressure transient and other analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 182-C2 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.
Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning potential hydrocarbon pay in the 182-C2 well, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro’s testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results of the 183-B1 well and the 182-C2 well, equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
