Tag: Energy

Release – Largo Reports Third Quarter 2023 Financial Results; Announces First Commercial Shipment of Ilmenite as By-Product of its Vanadium Operations in Brazil and Validation of its 6 MWh Vanadium Redox Flow Battery to Operate on Test Conditions in Spain

Posted on by aweinsoff@channelchek.com

Research News and Market Data on LGO

November 8, 2023

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All amounts expressed are in U.S. dollars, denominated by “$”

TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company“) (TSX: LGO) (NASDAQ: LGO) today announces its third quarter 2023 financial results.

Largo Reports Third Quarter 2023 Financial Results; Announces First Commercial Shipment of Ilmenite as By-Product of its Vanadium Operations in Brazil (Photo: Business Wire)

Q3 2023 and Other Highlights

  • Revenues of $44.0 million vs. revenues of $54.3 million in Q3 2022; Decline driven by lower vanadium prices and lower vanadium sales volumes; Revenues per lb sold3 of V2O5 equivalent of $8.34 vs. $8.80 in Q3 2022
  • Operating costs of $42.5 million vs. $45.6 million in Q3 2022; Cash operating costs excluding royalties1 per pound sold of $5.44 vs. 4.86 per lb sold in Q3 2022
  • Net loss of $11.9 million vs. net loss of $2.6 million in Q3 2022; Basic loss per share of $0.19 vs. basic loss per share of $0.04 in Q3 2022
  • Cash used before working capital items of $4.4 million vs. cash provided before working capital items of $4.3 million in Q3 2022
  • Cash balance of $39.5 million, net working capital surplus of $91.0 million and debt of $65.0 million exiting Q3 2023
  • V2O5 equivalent sales of 2,385 tonnes (inclusive of 256 tonnes of purchased material) vs. 2,796 tonnes (inclusive of 351 tonnes of purchased material) sold in Q3 2022
  • Production of 2,163 tonnes (4.8 million lbs1) of V2O5 vs. 2.906 tonnes in Q3 2022
  • Largo Clean Energy’s (“LCE”) 6 megawatt-hour (“MWh”) vanadium redox flow battery (“VRFB”) deployment for Enel Green Power España (“EGPE”) was validated to operate on test conditions according to EGPE specifications and LCE test procedures in October
  • The Company successfully commissioned and is in the process of ramping up production of its new ilmenite concentrate plant with initial production of 350 tonnes in August and 700 tonnes in September; The first commercial shipment of ilmenite is in progress and should contribute to the Company’s revenues in Q4 2023 as a by-product of its vanadium operations
  • Q3 2023 results conference call: Thursday, November 9th at 1:00 p.m. ET

Vanadium Market Update2

  • The average benchmark price per lb of V2O5 in Europe was $8.03, a 2.5% decrease from the average of $8.23 seen in Q3 2022
  • Vanadium spot demand was soft in Q3 2023, primarily due to adverse conditions in the Chinese and European steel industries. However, strong demand growth from the aerospace and energy storage sectors continued

Daniel Tellechea, Director and Interim CEO of Largo commented: “Q3 2023 was a challenging quarter for Largo, primarily due to the tragic accident that occurred at the Company’s chemical plant in July as well as technical delays in commissioning our new crushing plant. The accident at the chemical plant resulted in a capacity bottleneck in the evaporator section of the plant, which resulted in lower overall production rates of vanadium in July and August. In early September, our operating team recommissioned the evaporator circuit, which is now operating at its original capacity. A delay in ramp up of the new magnetic separation crushing plant also temporarily impacted vanadium production in Q3 2023. The new crushing plant was designed to offset the impact of lower mined vanadium grades, as per the Company’s mine plan. The operating team is in the process of resolving these issues, and we are pleased to report that the crushing plant exceeded 1,000 tonnes of contained V2O5 in October, despite additional crushing plant improvements scheduled to be implemented in November and December.”

He continued: “It is our priority to continue to optimize our operations, reduce costs, and achieve production and sales targets safely. In light of this, we maintain our guidance for 2023. Additionally, further measures are being implemented to improve the organization’s performance, including optimizing operational efficiencies through the implementation of the new crushing system, concentrating on increasing production of high purity vanadium, restructuring equipment maintenance processes to further reduce costs, and ramping up ilmenite production starting in the fourth quarter of 2023 to diversify revenues. We are beginning to see a notable reduction in key consumable costs, such as sodium carbonate, as well as ongoing overhead cost reductions through a reduction of the number of contractors at the mine through efficiency improvement programs and further reductions in the headcount at LCE. The Company considers these ongoing initiatives to be a vitally important measures to counter the current decrease in vanadium prices.”

He concluded: “During this past year, we have also made several significant investments that are necessary for the sustainability of our operations in a lower vanadium price environment. Among these investments are an increased waste rock pre-stripping and aggressive infill drilling program to optimize production in the years to come. Our team has successfully built and commissioned an ilmenite plant to diversify future revenues as a by-product of the vanadium mine, built a new magnetic separation crushing plant for the purpose of mining lower-grade material without reducing production levels, and delivered the Company’s first vanadium battery to EGPE, our European energy storage customer. A substantial investment has been made in LCE, which is not yet generating significant revenues, but continues to consume cash. With our current strategic review process in place, Largo expects to optimize the value proposition of LCE and participate in one of the most significant macrotrends, the clean energy transition with vanadium as a critical material. With these investments, we believe that Largo is on the path to a brighter future.”

Financial and Operating Results – Highlights

(thousands of U.S. dollars, except as otherwise stated)Three months endedNine months ended
Sept. 30, 2023Sept. 30, 2022Sept. 30, 2023Sept. 30, 2022
Revenues43,98354,258154,514181,750
Operating costs(42,580)(45,602)(131,540)(125,264)
Net income (loss)(11,884)(2,601)(19,057)13,410
Basic earnings (loss) per share(0.19)(0.04)(0.30)0.21
Cash (used) provided before working capital items(4,360)4,3287,63135,479
Cash operating costs excl. royalties3 ($/lb)5.444.865.254.37
Cash39,57262,71339,57262,713
Debt65,00015,00065,00015,000
Total mined – dry basis (tonnes)6,406,6264,178,18511,373,6837,780,061
Total ore mined (tonnes)447,165351,4501,279,0241,033,375
Effective grade4 of ore milled (%)0.941.281.041.32
V2O5 equivalent produced (tonnes)2,1632,9066,9138,432

Q3 2023 Notes

  • The decrease in operating costs in Q3 2023 is largely attributable to lower overall sales in the period, which includes a reduction in the sale of purchased products and lower royalties due to lower sales.
  • V2O5 equivalent production of 2,163 tonnes in Q3 2023 decreased from 2,639 tonnes produced in Q2 2023. Production in July 2023 was 644 tonnes, with 775 tonnes produced in August and 744 tonnes produced in September, for a total of 2,163 tonnes of V2O5 equivalent produced. July and August production were negatively impacted as a result of the chemical plant operating at limited capacity due to the accident in the evaporation section of the plant in July 2023. In addition, September production was negatively impacted by low availability of the crushing circuit, combined with the planned lower vanadium grade of ore mined. V2O5 production in October continued to improve with 866 tonnes produced.
  • The Company is actively working to achieve higher levels of operational stability to better manage its costs which have increased due in part to lower grades of ore mined as compared with prior quarters. The lower grade of ore mined in Q3 2023 was according to plan, representing a 27% decrease year-over-year. The Company is actively working towards increasing the availability of its new crushing system to offset lowers grades of ore mined and reach production of 1,000 tonnes of V2O5 per month in future months.
  • Total mined (dry basis) of 6.4 million tonnes increased by 53% and total ore mined of 447,165 tonnes was 27% higher than Q3 2022, respectively. Increased mining rates and higher mining costs impacted the Company’s financial performance in Q3 2023.
  • As part of its ongoing mitigation efforts, the Company is focused on reducing its fixed cost structure through contract renegotiations and an optimization of key operational areas, including mining, maintenance, equipment rental and consumables.
  • The commissioning and ramp up of the ilmenite plant commenced in Q3 2023 with production of 350 tonnes in August and 700 tonnes in September. The Company expects the ramp up to conclude in Q2 2024 with revenue expectations in Q4 2023.
  • Exploration and evaluation costs of $2.3 million increased by $1.8 million from Q3 2022. This was driven by infill drilling and geological model work at the Maracás Menchen Mine and diamond drilling at Campo Alegre de Lourdes to support the maintenance of the Company’s mineral rights. During Q3 2023, the Company completed approximately 9,100 metres of diamond drilling in the near mine deep drilling and exploration program. In the nine months ended September 30, 2023, approximately 19,100 metres of diamond drillholes have been completed in Campo Alegre de Lourdes and Maracas targets. A re-assay program began in Q2 2023 to perform chemical analysis on previously interpreted results. The focus of this program is to increase measured and indicated resources. Approximately 5,000 samples were prepared and sent to the external laboratory for analysis in Q3 2023.

The information provided within this release should be read in conjunction with Largo’s unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 and its management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2023 which are available on our website at www.largoinc.com or on the Company’s respective profiles at www.sedarplus.com and www.sec.gov.

About Largo

Largo is a globally recognized vanadium company known for its high-quality VPURE™ and VPURE+™ products, sourced from its Maracás Menchen Mine in Brazil. The Company is currently focused on implementing an ilmenite concentrate plant and is undertaking a strategic evaluation of its U.S.-based clean energy business, including its advanced VCHARGE vanadium battery technology to maximize the value of the organization. Largo’s strategic business plan centers on maintaining its position as a leading vanadium supplier with a growth strategy to support a low-carbon future.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.

Cautionary Statement Regarding Forward-looking Information:

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation. Forward-looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities; costs of future activities and operations, including, without limitation, achieving operational stability and managing unit costs; and the expected completion of the ilmenite plan ramp up in Q4 2023.

The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5, other vanadium products, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company’s operations at the Maracás Menchen Mine or relating to Largo Clean Energy; the availability of financing for operations and development; the availability of funding for future capital expenditures; the ability to replace current funding on terms satisfactory to the Company; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the Company’s ability to procure equipment, services and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the accuracy of the Company’s mine plan at the Maracás Menchen Mine, the competitiveness of the Company’s vanadium redox flow battery (“VRFB“) technology; the ability to obtain funding through government grants and awards for the Green Energy sector, the accuracy of cost estimates and assumptions on future variations of VCHARGE battery system design, that the Company’s current plans for ilmenite and VRFBs can be achieved; the Company’s “two-pillar” business strategy will be successful; the Company’s sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company’s ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.

Forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.ca and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&A which also apply.

Trademarks are owned by Largo Inc.

Non-GAAP5 Measures

The Company uses certain non-GAAP measures in this press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company’s GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Revenues Per Pound

This press release refers to revenues per pound sold, a non-GAAP performance measure that is used to provide investors with information about a key measure used by management to monitor performance of the Company.

This measure, along with cash operating costs and total cash costs, is considered to be one of the key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. This revenues per pound measure does not have any standardized meaning prescribed by IFRS and differs from measures determined in accordance with IFRS. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of this measure per pound sold to revenues as per the Q3 2022 unaudited condensed interim consolidated financial statements.

  Three months ended Nine months ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Revenues – V2O5 produced1 $25,268 $30,831 $90,352 $98,621
V2O5 sold – produced (000s lb)  3,017  3,745  9,898  10,824
V2O5 revenues per pound of V2O5 sold – produced ($/lb) $8.38 $8.23 $9.13 $9.11
         
Revenues – V2O5 purchased1 $2,066 $1,655 $7,531 $3,184
V2O5 sold – purchased (000s lb)  309  207  1,014  339
V2O5 revenues per pound of V2O5 sold – purchased ($/lb) $6.69 $8.00 $7,43 $9.39
         
Revenues – V2O51 $27,334 $32,486 $97,883 $101,805
V2O5 sold (000s lb)  3,326  3,952  10,912  11,163
V2O5 revenues per pound of V2O5 sold ($/lb) $8.22 $8.22 $8.97 $9.12
         
Revenues – V2O3 produced1 $3,734 $3,798 $7,575 $3,798
V2O3 sold – produced (000s lb)  308  308  619  308
V2O3 revenues per pound of V2O3 sold – produced ($/lb) $12.12 $12.33 $12.24 $12.33
         
Revenues – V2O3 purchased1 $— $482 $1,155 $482
V2O3 sold – purchased (000s lb)  —  43  88  43
V2O3 revenues per pound of V2O3 sold – purchased ($/lb) $— $11.21 $13.13 $11.21
         
Revenues – V2O31 $3,734 $4,280 $8,730 $4,280
V2O3 sold (000s lb)  308  350  707  350
V2O3 revenues per pound of V2O3 sold ($/lb) $12.12 $12.23 $12.35 $12.23
         
Revenues – FeV produced1 $11,750 $12,756 $46,408 $54,667
FeV sold – produced (000s kg)  444  394  1,591  1,576
FeV revenues per kg of FeV sold – produced ($/kg) $26.46 $32.38 $29.17 $34.69
         
Revenues – FeV purchased1 $1,058 $4,736 $1,386 $20,998
FeV sold – purchased (000s kg)  39  159  50  516
FeV revenues per kg of FeV sold – purchased ($/kg) $27.13 $29.79 $27.72 $40.69
         
Revenues – FeV1 $12,808 $17,492 $47,794 $75,665
FeV sold (000s kg)  483  553  1,641  2,092
FeV revenues per kg of FeV sold ($/kg) $26.52 $31.63 $29,12 $36.17
         
         
Revenues1 $43,876 $54,258 $154,407 $181,750
V2O5 equivalent sold (000s lb)  5,259  6,164  17,177  18,340
Revenues per pound sold ($/lb) $8.34 $8.80 $8.99 $9.91
1. As per note 18 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.

Cash Operating Costs Per Pound

The Company’s MD&A refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.

Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.

Cash operating costs excluding royalties is calculated as cash operating costs less royalties. Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine. Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q3 2023 unaudited condensed interim consolidated financial statements.

  Three months ended Nine months ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Operating costsi $42,580  $45,602  $131,540  $125,264 
Professional, consulting and management feesii  747   1,181   2,215   3,784 
Other general and administrative expensesiii  408   383   1,032   859 
Less: iron ore costsi  (145)  (200)  (638)  (637)
Less: conversion costsi  (1,413)  (1,655)  (5,551)  (5,839)
Less: product acquisition costsi  (5,449)  (7,248)  (13,380)  (20,651)
Less: distribution costsi  (2,202)  (2,581)  (6,174)  (6,887)
Less: inventory write-downiv  (978)  (1,655)  (1,661)  (1,655)
Less: depreciation and amortization expensei  (6,003)  (5,111)  (19,456)  (14,923)
Cash operating costs  27,545   28,716   87,927   79,315 
Less: royalties1  (2,024)  (2,497)  (6,919)  (8,264)
Cash operating costs excluding royalties  25,521   26,219   81,008   71,050 
Produced V2O5 sold (000s lb)  4,693   5,390   15,434   16,272 
Cash operating costs per pound ($/lb) $5.87  $5.33  $5.70  $4.87 
Cash operating costs excluding royalties per pound ($/lb) $5.44  $4.86  $5.25  $4.37 
i. As per note 19 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.
ii. As per the Mine properties segment in note 15 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.
iii. As per the Mine properties segment in note 15 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements less the increase in legal provisions of $0.4 million (Q3 2023) and $0.8 million (nine months ended September 30, 2023) as noted in the “other general and administrative expenses” section on page 6 of the Company’s Q3 2023 management discussion and analysis.
iv. As per notes 5 and 19 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements for purchased finished products.

____________________________
1 Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.
2 Fastmarkets Metal Bulletin.
3 The cash operating costs excluding royalties and revenues per pound per pound sold are reported on a non-GAAP basis. Refer to the “Non-GAAP Measures” section of this press release. Revenues per pound sold are calculated based on the quantity of V2O5 sold during the stated period.
4 Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate
5 GAAP – Generally Accepted Accounting Principles

Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Source: Largo Inc.

Alvopetro Energy (ALVOF) – Results near expectations with volumes preannounced and pricing set

Posted on by cpereira@noblefcm.com


Thursday, November 09, 2023

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

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

Alvopetro reported 2023-3Q net income of $5.8 million or $0.15 per diluted share. Results were slightly below our projections for net income of $6.3 million, or $0.17 per share. Sales were $12.3 million versus our $11.8 million estimate. With sales volume preannounced on a monthly basis and natural gas prices (95% of sales) preset by Alvopetro’s Gas Sales Agreement, there is little variance to expectations.

Production costs per unit rose explaining the slightly lower-than-expected results. Production expenses per barrel of oil equivalent (BOE) produced were $6.52 versus $3.34 last year and $5.77 last quarter. We attribute the rise to lower production volume and do not view it as an area of concern. Operating netbacks (realized prices less royalties and production costs) were $70.34 per BOE up from $59.83 last year and $67.46 last quarter. Higher netbacks reflect a natural gas price reset in February and August that increased pricing as well as a decrease in royalty costs.


Get the Full Report

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. 

Energy Fuels (UUUU) – Uranium Sales Growing as Company Gets Ready To Restart Mining

Posted on by cpereira@noblefcm.com


Tuesday, November 07, 2023

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, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

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

Higher uranium prices led to increased sales out of inventory. Uranium prices rose during the quarter with spot prices moving into the mid-seventies. While realized prices for Energy Fuel were only $58.18/lb. because of long-term contract pricing, it remains well above production costs, which management describes as “well below $50/lb.” Energy Fuels continues to meet its utility contracts through the sale of uranium out of inventory. Inventory levels (586,000 tonnes) are roughly half of the level at the start of the year (1,027,000 tonnes).

Financial results improve with uranium sales. 2023-3Q results were largely in line with expectations once nonrecurring gains are removed. Of course, the Energy Fuel story has never been about near-term results. Instead, the stock moves on corporate developments. And, while there have been some setbacks (REE supply issues, share dilution), the company has made steady progress. We look for the stock to do well as projections turn into cash flow, and as investors begin to realize the potential of rising uranium prices and the profitability of REE separation.


Get the Full Report

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. 

Alvopetro Energy (ALVOF) – Production takes a turn upward

Posted on by cpereira@noblefcm.com


Tuesday, November 07, 2023

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

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

Production in the month of October was 1,839 boe/d, up from 1,203 boe/d in September. Production has been anemic in recent months due to partner nomination issues in the Cabure field and demand issues by Bahia Gas. The production increase, and the fact that it largely came from the Cabure field, is a positive indication that Alvopetro’s growth plans are getting back on track. Management has set a near-term goal of reaching 3,000 boe/d and a long-term goal of 5,833 boe/d.

Speaking of growth, results from a new oil well look positive. Alvopetro completed the BL-6 well in the Bom Lugar field. The well is averaging 13 boe/d, more that all other existing oil production. The Bom Lugar field could be an important field for the company as it seeks to expand operations and reduce dependency upon natural gas sales to Bahia Gas. We believe the success of the BL-6 well will lead to management putting additional resources into the Bom Lugar field.


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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. 

Forum Energy Technologies Transforms Business with Variperm Acquisition

Posted on by slightbourne@noblecapitalmarkets.com

Houston-based Forum Energy Technologies (NYSE: FET) announced a definitive agreement to acquire Variperm Energy Services in a transformative $210 million deal. The acquisition is expected to significantly boost FET’s revenues, profitability, and exposure to critical global energy production.

Under the terms of the agreement, FET will pay $150 million in cash and issue 2 million shares of FET common stock to acquire Variperm. This reflects a total valuation of approximately 3.7 times Variperm’s trailing 12-month EBITDA. The deal is projected to close in January 2024, subject to customary closing conditions and Canadian regulatory approval.

Variperm is a leading manufacturer of customized downhole solutions and sand/flow control products for heavy oil applications. Headquartered in Calgary, Canada, the company has 290 employees across eight North American locations. Variperm has been backed by private equity firm SCF Partners since 2014.

“We are excited to have Variperm join the FET family,” said Neal Lux, President and CEO of FET. “Variperm’s differentiated technology and strong position with blue-chip customers establishes FET as a key global partner for producers.”

Significantly Accretive Deal

FET expects the acquisition to be highly accretive, transforming its profitability, margins and scale.

On a combined trailing 12-month basis as of September 30, 2023, FET projects total revenues increasing 17% to $873 million. Adjusted EBITDA is expected to surge 77% to $121 million, reflecting a 470 basis point improvement in EBITDA margins to 14%.

The deal is also expected to drive substantial increases in operating cash flow, free cash flow, and earnings per share. FET anticipates ample liquidity and balance sheet flexibility even after closing, with net leverage of only 1.9x EBITDA.

Complementary Offerings & Global Reach

Importantly, Variperm’s product portfolio directly complements FET’s existing artificial lift and downhole solutions. This creates cross-selling opportunities and enables FET to offer integrated solutions.

FET can also leverage its extensive global infrastructure and footprint spanning over 50 countries to expand Variperm’s customer reach worldwide. This includes critical energy markets in the Middle East.

Neal Lux commented, “Variperm’s strong position with blue-chip customers further establishes FET as a key global partner for producers. The acquisition also broadens FET’s exposure to one of the most critical sources of global energy production and security.”

Financing & Liquidity

FET plans to fund the $150 million cash portion of the acquisition through existing cash on hand and borrowings under its revolving credit facility. FET may also utilize a $60 million seller term loan from Variperm’s existing PE owners.

In conjunction with the deal, FET has amended its credit facility to increase revolving commitments by $71 million to $250 million. The amended facility also extends maturity to September 2028 and permits the Variperm acquisition.

At close, FET expects to have net leverage of 1.9x EBITDA and liquidity of approximately $142 million to fund operations and future growth. The company anticipates rapidly deleveraging to 1.0-1.3x by end of 2024 based on free cash flow generation.

The strategic Variperm acquisition solidifies FET’s standing as a leading provider of solutions for the global oil & gas industry. By augmenting its portfolio, boosting profitability, and expanding its customer base, FET has set the stage for continued growth and success.

Take a moment to look at other energy companies by looking at Noble Capital Market’s Senior Research Analyst Michael Heim’s coverage list.

Release – Largo to Release Third Quarter 2023 Financial Results on November 8, 2023

Posted on by aweinsoff@channelchek.com

Research News and Market Data on LGO

October 31, 2023

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TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) will release its third quarter 2023 financial results on Wednesday, November 8, 2023 after the close of market trading. Additionally, the Company will host a conference call to discuss its third quarter 2023 results and other updates on Thursday, November 9 at 1:00 p.m. ET.

To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3RXJdiN to receive an instant automated call back.

You may also dial direct to be entered to the call by an operator using the dial-in details provided below.

Conference Call Details
Date:Thursday, November 9, 2023
Time:1:00 p.m. ET
Dial-in Number:Local: +1 (416) 764-8650
North American Toll Free: +1 (888) 664-6383
Conference ID:19034623
RapidConnect Link:https://emportal.ink/3RXJdiN
Replay Number:Local / International: + 1 (416) 764-8677
North American Toll Free: +1 (888) 390-0541
Replay Passcode: 034623#
Website:To view press releases or any additional financial information, please visit the Investor Resources section of the Company’s website at: https://www.largoinc.com/investors/Overview

About Largo

Largo is a globally recognized vanadium company known for its high-quality VPURETM and VPURE+TM products, sourced from its Maracás Menchen Mine in Brazil. The Company is currently focused on implementing an ilmenite concentrate plant and is undertaking a strategic evaluation of its U.S.-based clean energy business, including its advanced VCHARGE vanadium battery technology to maximize the value of the organization. Largo’s strategic business plan centers on maintaining its position as a leading vanadium supplier with a growth strategy to support a low-carbon future.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.

For further information, please contact:

Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Source: Largo Inc.

 

Siemens Energy’s Stock Plummets 32% as it Appeals to German Government

Posted on by slightbourne@noblecapitalmarkets.com

Shares of Siemens Energy took a nosedive on Thursday after the German wind power firm revealed it is seeking financial guarantees from the government to shore up its balance sheet. The company’s stock plunged over 32% amid concerns over ongoing problems at its wind turbine manufacturing subsidiary Siemens Gamesa.

This latest crisis of confidence in Siemens Energy comes after a tumultuous year where the company scrapped its profit forecasts due to major setbacks at Siemens Gamesa. Persistent quality control issues and production delays have plagued Siemens Gamesa, dragging down the parent company’s financial performance. Siemens Energy shocked investors earlier this year when it warned that these issues could persist for years.

Now Siemens Energy is looking to the German government for a lifeline to provide the guarantees it needs for long-term projects and growth ambitions. With its strong order intake and project pipeline, Siemens requires sizeable guarantees to move forward. It remains unclear exactly how much financing Siemens Energy is seeking from the government and what form this support may take. The company is holding preliminary talks with German officials, banks, and other stakeholders to find a solution.

For investors, this latest turmoil calls Siemens Energy’s financial health into question. While the company left its 2023 guidance unchanged, its stock has been battered this year. Shares are down nearly 60% year-to-date due to the cascading problems at Siemens Gamesa. The turbine troubles will continue to be a dark cloud over Siemens Energy until substantial progress is made on quality control and production. Siemens Gamesa’s issues with offshore wind ramp up also remain a glaring concern.

All of this uncertainty around Siemens Energy and its finances have sent investors rushing for the exits. But for bargain hunters, the plummeting stock could also look like a tempting buying opportunity. Siemens Energy maintains a strong long-term outlook in the booming renewable energy market. Demand for wind power is surging, especially in Europe, as countries move aggressively toward carbon neutrality. Siemens Energy still boasts an enviable portfolio of technology and intellectual property in the industry.

If Siemens Energy can weather its current storms, its future prospects in offshore and onshore wind power remain bright. But the company must fix its turbine troubles and strengthen its balance sheet to fully capture the potential ahead. For conservative investors, it may be best to wait on the sidelines until more clarity emerges. But for speculators willing to stomach volatility and risk, Siemens Energy’s swooning shares could offer a high-risk, high-reward proposition.

Much depends on whether the German government views Siemens Energy as simply too big and important to fail. Germany is staking much of its economic future on renewable energy leadership. Having a national industrial champion falter so badly would be an embarrassment and setback. Siemens Energy is essentially making the case that it’s too strategically vital for Germany’s interests to be allowed to flounder.

Yet the German government also has to be wary of setting a precedent of bailing out struggling companies at taxpayer expense. Germany may be willing to extend credit guarantees to Siemens Energy, but direct financial aid seems unlikely. The coming months will be crucial in determining if Siemens Energy can right itself and deliver on its clean energy ambitions. For investors, the ride may continue to be bumpy until the company can prove it has turned a corner.

Permex Petroleum (OILCD) – Permex completes share consolidation and announces public offering.

Posted on by cpereira@noblefcm.com


Tuesday, October 24, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

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

Permex completed a 1 for 4 common share consolidation. The consolidation, which was effective October 23, 2023, was initially announced on October 19, 2023. The consolidation affects Permex shares on the Canadian Securities Exchange (CSE), the Frankfurt Stock Exchange and the OTCQB. With the consolidation, the number of outstanding shares has been reduced from approximately 2 million to 400,000. The consolidation was needed to be listed on the Nasdaq Capital Market. If completed at an assumed post-consolidation price of $7.64 per share, the offerings would generate $29 million.

Permex to issue common equity and warrants. On October 20, 2023, Permex filed a prospectus to issue up to 1.9 million common units with accompanying warrants and to issue up to 1.9 million pre-funded units and warrants. The warrant associated with the common units does not have a set exercise price, which we will assume will be near the common stock offer price. The warrants for the pre-funded common shares will have an exercise price of $0.01 per share. The new shares, if approved, will trade on the Nasdaq Capital Market under the symbols OILS and OILSW.


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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. 

Release – Alvopetro Publishes 2022 Sustainability Report

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ALVOF

Oct 23, 2023

CALGARY, AB, Oct. 23, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) is pleased to announce the release of our 2022 Sustainability Report (the “Report”), highlighting our approach to environmental, social and governance (“ESG”) practices for the year ended December 31, 2022 and outlining our commitment to building a sustainable future for all of our stakeholders. A full copy of the Report, which was approved by Alvopetro’s Board of Directors, can be found on our website at https://alvopetro.com/Sustainability.

2022 ESG highlights included:

  • Natural gas focused production (96% of total 2022 production);
  • Alvopetro’s locally produced natural gas resulted in average savings of 57% for consumers relative to imported LNG;
  • Maintained low emission intensity with Scope 1 & 2 emissions intensity of 7.4 kg CO2e per boe;
  • No reported environmental spills;
  • Zero lost-time safety incidents;
  • 33% of our total workforce and 38% of our senior leadership team positions are held by women;
  • Strengthened commitment to biodiversity and conservation with our northeastern collared sloth conservation program;
  • Expanded social investment programs to benefit over 600 recipients, increasing spending by 156% ; and,
  • With increased production and cash flows, we paid over $20 million in royalties, income taxes and sales taxes, contributing to direct and indirect benefits for the communities we operate and to Brazil as a whole.

Corporate Presentation

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

Social Media

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

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

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé and Murucututu natural gas fields and our strategic midstream infrastructure.

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

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

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning Alvopetro’s approach to ESG practices and plans for the future. 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 success of future drilling, completion, testing, recompletion and development activities, equipment availability, the timing of regulatory licenses and approvals, the outlook for commodity markets and ability to access capital markets, the impact of global pandemics and other significant worldwide events, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest 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.sedarplus.ca. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Biden Administration Unveils $7 Billion Investment in Regional Hydrogen Hubs

Posted on by slightbourne@noblecapitalmarkets.com

The Biden administration is making a major push to develop a domestic hydrogen economy by funding 7 regional hydrogen hubs across the United States. The hubs will share up to $7 billion in federal funding aimed at spurring hydrogen production and use.

President Joe Biden and Energy Secretary Jennifer Granholm announced Friday the selection of hubs in Appalachia, California, the Gulf Coast, the Heartland, Mid-Atlantic, Midwest, and Pacific Northwest regions. The funds come from last year’s Bipartisan Infrastructure Law.

Accelerating the Hydrogen Economy

The goal is to accelerate the growth of a clean hydrogen industry in the U.S. Hydrogen is a versatile fuel seen as a critical tool for decarbonizing major sectors like heavy industry, transportation, and power generation.

When produced using low-carbon methods, hydrogen can provide emissions-free energy for hard-to-abate sectors. Expanding hydrogen is a key plank of the Biden administration’s strategy to cut greenhouse gas emissions and combat climate change.

The 16-state regional hubs model fosters clusters of hydrogen supply and demand, minimizing transportation needs. The administration expects the $7 billion federal injection to mobilize over $43 billion in private capital.

Leveraging Regional Strengths

Each hydrogen hub leverages unique geographic strengths ideal for clean hydrogen production. For example:

  • The Appalachia Hub will use the region’s abundant natural gas supply, applying carbon capture to lower emissions.
  • California and the Pacific Northwest have access to seaports critical for shipping hydrogen.
  • The Heartland can utilize wind resources to produce hydrogen via electrolysis.
  • The Midwest Hub will tap into nuclear power to make hydrogen.

In addition to production, the regional hubs focus on cultivating local hydrogen markets. Some will provide hydrogen for industrial uses while others may focus on fertilizer or fuel cell vehicle growth.

Building on Bipartisan Policy

The hydrogen hub funding originated from the bipartisan infrastructure package passed in 2021. The law included $8 billion for at least four regional hubs.

The Biden administration expanded the program to seven hubs to extend geographic impact. The policy builds on bipartisan support for advancing hydrogen in the U.S.

Last year’s Infrastructure Investment and Jobs Act also created a hydrogen production tax credit. The recently passed Inflation Reduction Act further boosted hydrogen incentives with an additional $3 per kg production credit.

The Energy Department will provide guidance on utilizing the tax credits later this year. The credits will aid long-term viability of the regional hubs.

Spurring Private Investment

The federal money is intended to galvanize substantial private capital investment in building out hydrogen infrastructure. Siting hydrogen hubs near key anchor facilities can spur economic growth.

For example, California’s hub grants will likely stimulate billions in private funding around port facilities. Financial incentives like the hydrogen tax credits create ideal conditions for private sector buy-in.

Over time, decreasing costs through scale and technology improvements could make hydrogen competitive with conventional fuels. The regional hubs represent a starting point designed to nurture both supply and demand.

Next Steps for Growth

The hydrogen hubs mark an important early phase of U.S. efforts to scale up the hydrogen economy. Biden administration officials noted work remains to develop connective infrastructure and further applications.

Ongoing policy support via research funding, incentives, and enabling regulation will help drive growth. Continued bipartisan cooperation around hydrogen could lead to additional catalytic investments.

With the right policy environment, hydrogen could become a major pillar of America’s clean energy economy. The regional hubs represent a down payment on the infrastructure needed to realize hydrogen’s vast decarbonization potential across the economy.

Release – Alvopetro Announces 183-A3 Well Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ALVOF

Oct 11, 2023

CALGARY, AB, Oct. 11, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) is pleased to announce that we have now completed drilling the 183-A3 well on our 100% owned Murucututu natural gas field. Based on open-hole logs, the well encountered potential net natural gas pay across two separate formations totaling 127.7 metres, with an average porosity of 10.3%.

President and CEO, Corey C. Ruttan commented:

“The results from our uphole 183-A3 Caruaçu exploration target has significantly exceeded our pre-drill expectations and has the potential to open up a large stacked multi-zone development opportunity in further support of our longer-term natural gas growth objectives.”

The 183-A3 well was drilled to a total measured depth (“MD”) of 3,540 metres. Based on open-hole logs, the well encountered potential net natural gas pay in both the Caruaçu Member of the Maracangalha Formation and the Gomo Member of the Candeias Formation, with an aggregate 127.7 metres total vertical depth (“TVD”) of potential natural gas pay, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cutoff.

Caruaçu Exploration Target

In the Caruaçu Member, a total of 116.1 metres TVD of potential net natural gas pay was encountered between 2,542 metres and 3,062 metres, at an average 38.5% water saturation and an average porosity of 10.4%. Alvopetro currently has no reserves or resources assigned to this Target.

Candeias Formation

In the Gomo Member of the Candeias Formation, a total of 11.6 metres TVD of potential net natural gas pay was encountered between 3,085 metres and 3,270 metres, at an average water saturation of 30.6% and an average porosity of 9.1%. Our Proved reserves for this development well had estimated 12.5 meters of net natural gas pay with porosity of 11.0% and 17% water saturation.

Based on these drilling results, subject to regulatory approvals and equipment availability, we plan to complete the well and put it on production directly to the adjacent field production facility.

Corporate Presentation

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

Social Media

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

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

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé and Murucututu natural gas fields 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.

Testing and Well Results. Data obtained from the 183-A3 well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities should be considered to be preliminary until testing, detailed analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 183-A3 well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.

Cautionary statements regarding the filing of a Notice of Discovery. We have submitted a Notice of Discovery of Hydrocarbons to the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (the “ANP”) with respect to the 183-A3 well. All operators in Brazil are required to inform the ANP, through the filing of a Notice of Discovery, of potential hydrocarbon discoveries. A Notice of Discovery is required to be filed with the ANP based on hydrocarbon indications in cuttings, mud logging or by gas detector, in combination with wire-line logging. Based on the results of open-hole logs, we have filed a Notice of Discovery relating to our 183-A3 well. These routine notifications to the ANP are not necessarily indicative of commercial hydrocarbons, potential production, recovery or reserves.

Oil and natural gas reserves. This news release includes certain information contained in the independent reserves and resources assessment and evaluation prepared by GLJ Ltd. (“GLJ”) dated February 27, 2023 with an effective date of December 31, 2022 (the “GLJ Reserves and Resource Report”). Specifically, this news release contains information concerning proved reserves in the GLJ Reserves and Resource Report applicable to the 183-A3 well. The information included herein represents only a portion of the disclosure required under NI 51-101. Full disclosure with respect to the Company’s reserves as at December 31, 2022 is included in the Company’s annual information form for the year ended December 31, 2022 which has been filed on SEDAR+ (www.sedarplus.ca) The reserves definitions used in this evaluation are the standards defined by COGEH reserve definitions and are consistent with NI 51-101 and used by GLJ. The recovery and reserve estimates of the Company’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein

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 net natural gas pay in the 183-A3 well and expectations regarding future development plans for the well and the Murucututu natural gas field. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning results from completing the 183-A3 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 global pandemics and other significant worldwide events, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest 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.sedarplus.ca. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Alvopetro Energy (ALVOF) – Gas sales in September take a big drop

Posted on by cpereira@noblefcm.com


Wednesday, October 11, 2023

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

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

Gas sales declined due to a temporary reduction in demand. Gas sales to Bahiagas in September averaged 6.8 MMcf/d down 35% from August sales and well below peak sales of 15.8 MMcf/d in the March quarter. Gas sales were below take or pay agreements by 1.2 MMcf/d, which will be treated as deferred revenue. Gas sales had been declining in recent months because Alvopetro’s joint venture partner in its primary field had increased its nominations for gas sales following the start-up of its plant. The decline in September is related to lower demand and comes in addition to nomination issues.

Management views the decline as temporary and is working to increase production in 100% owned fields. As we have indicated before, increased partner nominations will result in lower partner nominations in the latter years of  well lives. In addition, Alvopetro is making progress drilling new wells that do not have nomination issues. Regarding the drop in demand, we would remind investors that the city of Bahia is a vibrant growing city that has limited gas supply options beyond Alvopetro. We are not concerned with a one-month decline in demand but recommend investors monitor demand issues going forward.


Get the Full Report

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. 

Exxon Makes Largest Deal Since 1999 with $59B Pioneer Purchase

Posted on by slightbourne@noblecapitalmarkets.com

Oil giant Exxon Mobil is making a huge bet on shale with its just-announced $59 billion all-stock acquisition of Pioneer Natural Resources, one of the largest producers in the Permian Basin of West Texas and New Mexico. Shale oil is a type of unconventional oil found in shale rock formations that must be hydraulically fractured to extract the oil.

The deal, which is Exxon’s biggest since its merger with Mobil in 1999, will give it access to Pioneer’s large acreage position in the Permian, allowing Exxon to more than double its current production in the region to over 1 million barrels per day once the deal closes in 2024.

This massive expansion of Exxon’s shale oil production comes even as much of the industry has pulled back investments in new drilling due to investor pressure to improve returns and limit growth. While Exxon is already one of the most active drillers in the Permian, the addition of Pioneer’s operations will make it the largest shale oil producer in the basin by far.

The shale boom propelled U.S. oil production to record highs in recent years, though growth has slowed more recently. The Biden administration has also paused new leases for drilling on federal lands, creating uncertainty around future shale production. However, the industry is still projected to provide most new sources of oil supply worldwide in the coming years.

Exxon’s bet is that shale, especially the Permian where production costs are lowest, will continue to drive future growth. Pioneer outlined an ambitious plan last year to raise Permian production as high as 2 million barrels per day by 2030. Together, the companies expect to capture major cost savings by combining operations.

But analysts say the deal is not without risk for Exxon. While shale helped supercharge U.S. production, the industry has had a mixed track record of profitability. Investors have lost patience with shale companies struggling to deliver consistent returns, pushing firms like Pioneer to focus more on cost discipline and shareholder payouts rather than maximum production growth.

Outside shale, Exxon is also working to develop large, costly conventional oil projects offshore Guyana and in other regions to replenish reserves. Some analysts question whether Exxon might be spreading itself thin trying to balance massive shale drilling with high-stakes conventional projects.

More broadly for the oil industry, concerns around climate change have made the long-term outlook uncertain. With electric vehicles going mainstream and many governments setting net-zero emissions targets, peak oil demand may already be behind us according to some forecasts.

While Exxon says shale oil will be needed to meet global energy demand for decades to come, increasing pressure on the industry to reduce emissions led Pioneer to accelerate its own net zero target from 2050 to 2035 after the acquisition was announced. With shale methane emissions a major focus for policymakers, combining operations could allow for more investment in leak detection and reductions.

For now, Exxon seems confident in the value of shale, and particularly the Permian’s vast oil riches. The Pioneer deal positions it to be the dominant driller in the West Texas region as others pull back. But only time will tell whether the big bet on shale pays off or leaves Exxon overextended. The deal reflects one of the oil majors’ biggest signals of confidence yet that shale will continue driving growth well into the future.

Take a look at other energy and natural resources companies by taking a look at Noble Capital Markets’ Research Analyst Michael Heim’s coverage list.