Tag: Oil & Gas E&P

InPlay Oil (IPOOF) – Result hurt by production declines and low pricing but help may be coming

Posted on by cpereira@noblefcm.com


Monday, May 13, 2024

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, 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 results were below expectations as extremely cold weather affected wells. InPlay was actively drilling in the first quarter. Several wells were completed at the end of the quarter and should help out next quarter’s production. The resumption of drilling in a prolific region this fall should lead to higher production in 2025.

Pricing remains an issue as the discount to WTI oil prices remains large, but the discount shows signs of improving. The discount between realized prices and WTI oil prices (as expressed in Canadian dollars) remains wide. New oil and gas pipelines in western Canada should lower the discount. Oil and gas futures already indicate as much.


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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. 

Hemisphere Energy (HMENF) – Financial results benefit from fall drilling

Posted on by cpereira@noblefcm.com


Monday, April 22, 2024

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.

Results were in line with expectations absent charge. Income, cash flow and earnings for the 2023-4Q and 2023 year would have been in line with expectations absent a $4.2 million nonrecurring charge to write down non-core assets.

Quarter production rose 16% year over year due to an active fall drilling program. The increase was expected. Extreme weather hurt production in the first few months of 2024 (2024-1Q production was announced below that in our models) but has risen to all-time high levels recently. We have lowered our 2024-1Q production estimate but raised our estimate for the remaining quarter’s of 2024.


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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. 

Hemisphere Energy (HMENF) – Hemisphere releases reserve report

Posted on by cpereira@noblefcm.com


Friday, March 15, 2024

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.

Hemisphere announced an independent evaluation of its reserves highlighting a 5% increase in NPV10 value for proved reserves. The estimated value for total proved reserves (PR) when discounted back at a 10% rate was $325 million ($3.27 per share) versus $308 million in the reserve from last year. The increase reflects higher West Canada Select oil prices in future years with the completion of the Trans Mountain Pipeline running from Alberta to the Pacific Coast. The value of proved developed producing (PDP) reserves rose 9% as the company was active drilling in 2023 and moving reserves into the PDP category.

The company was able to replace reserves reduced by production through drilling and acquisition. Hemisphere produced 1.1 mmboe in 2023 and added 1.0 mmboe of reserves through the drillbit or from acquisition. As a result, proved reserves were 12.1 mmboe in the most recent report versus 12.2 mmboe last year. The company spent $16 million to drill eight wells in addition to purchasing land and seismic. Just two years ago, capital expenditures were only $8 million. Finding, Development and Acquisition costs per proved reserve added in 2023 were $14.82/boe, an attractive price given current oil prices. 


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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. 

InPlay Oil (IPOOF) – Updated guidance reflects reduced production expectations

Posted on by cpereira@noblefcm.com


Wednesday, January 31, 2024

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, 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.

Management updated its 2023 guidance. The adjustment reflects a drop in production expectations. New guidance is significantly below the 9,700 boe/d production flow reported from the field on November 9, 2023. The decline may represent a sharper decline rate from initial production rates than had previously been expected by management. The drop in production lead to a sharp reduction in projected Adjusted Funds Flow and Free Funds Flow.

Management also sharply reduced its 2024 production estimates. New guidance calls for 2024 production that is only slightly higher than newly revised 2023 guidance despite the drilling of 14-15 new wells and an expected reduction in curtailment. While it is possible that management is simply being conservative, it may also reflect well decline rates as discussed above. 


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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. 

Hemisphere Energy (HMENF) – Hemisphere reports production levels near expectations, offers initial 2024 guidance

Posted on by cpereira@noblefcm.com


Friday, January 26, 2024

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.

Hemisphere Energy reported 2024-4Q production results. Hemisphere Energy reported production of 3,375 boe/d, a 16% increase over the same period in 2022 and an 11% increase over 2023-3Q results. Production for the most recent quarter surpassed the 3,325 boe/d rate we had been using in our models. 

Management gives initial 2024 production, pricing, and cost guidance. Management gave initial 2024 production, cash flow and capital expenditure guidance. Guidance was largely in line with our expectations. 


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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. 

Hemisphere Energy (HMENF) – Estimates finetuned to reflect weak December quarter energy prices

Posted on by cpereira@noblefcm.com


Tuesday, January 09, 2024

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.

As indicated in our recent energy industry report, energy prices were weak in the quarter ended December 21, 2023. WTI oil prices averaged $78.41/bbl. below our $80/bbl. estimate. Henry Hub natural gas prices averaged $2.74/mcf. versus our $3.25/mcf estimate due to warm weather. The C$ to US$ exchange rate was 1.35 times versus our 1.33 estimate.

We are adjusted our estimates modestly to reflect updated energy price and exchange rate numbers. We now project December quarter revenues of C$27.1 million, down from C$27.7 million. Our EBITDA estimate for the quarter is now C$16.7 million versus C$17.2 million and our Adjusted Fund Flow estimate is C$13.2 million versus C$13.4 million. Our earnings per share estimate remains $0.11. We have not made any changes to our 2024 estimates. 


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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. 

InPlay Oil (IPOOF) – Estimates finetuned down to reflect weak December-quarter energy prices

Posted on by cpereira@noblefcm.com


Tuesday, January 09, 2024

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, 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.

As indicated in our last energy industry report, oil and natural gas prices were weak in the December quarter. WTI oil prices averaged $78.40/bbl. in the quarter, below our previous estimate of $80/bbl. Henry Hub natural gas prices average $2.74/mcf., below our previous estimate of $3.25/mcf. due to warm weather. The C$ to US$ exchange rate was 1.35 times, slightly higher than our 1.33 estimate. We have adjusted our InPlay models to reflect updated results.

We are fine tuning our estimates to reflect lower energy prices and a higher exchange rate. Our revenue estimate for the 2023  December quarter has been lowered to C$44.7 million from C$47.2 million. Our EBITDA estimate for the quarter is now C$23.3 million, down from C$25.5 million and our Adjusted Fund Flow estimate is C$18.9 million, down from C$20.6 million. Our EPS estimate for the quarter drops to C$0.08 from C$0.09. We have not made any changes to our 2024 estimates. With this report, we are initiating 2024 quarterly estimates.


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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. 

Hemisphere Energy Corporation (HMENF) – Results beat expectations on higher pricing and lower costs

Posted on by cpereira@noblefcm.com


Wednesday, November 22, 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.

2023-2Q production rose as expected with new wells coming online. A robust summer of drilling resulted in higher production. Post-quarter flow rates allow us to bump up future production estimates. 

Realized prices came in better than expected. The basin discount was reduced adding to the rise in oil index prices. Management added swaps at attractive prices in response to higher oil prices.


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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. 

InPlay Oil (IPOOF) – September-quarter results

Posted on by cpereira@noblefcm.com


Friday, November 10, 2023

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, 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 increased 6% quarter over quarter despite continued curtailments and unplanned downtime. Curtailments and well pressure issues have hampered production for InPlay and other Canadian producers in recent quarters. InPlay invested $27.5 million during the quarter to drill and make infrastructure improvements. This represents more than half of the year’s capital expenditure budget. During the quarter, the company completed six wells and upgraded a natural gas facility to process 66% more gas.

InPlay reported strong results in the 2023-3Q and 2023-4Q should be better. Management indicated that its investments should lead to the fourth quarter being the highest production quarter of the year. Management did not make any changes to its guidance for 2023, 2024, and 2025 production and fund flow generation. With a drop in capital expenditures in the upcoming quarter, management should  have ample cash flow to pay dividends (7% yield), strategically repurchase shares, and explore small add-on acquisitions.


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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. 

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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Hemisphere Energy Corporation (HMENF) – Production jump coming. A special dividend!

Posted on by cpereira@noblefcm.com


Friday, September 29, 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.

2023 summer drilling program completed. Hemisphere drilled eight wells (6 for production) during the summer, as planned. Four had been completed by August 24th, as reported during second quarter results, so the completions were expected and in line with our model’s assumptions. Management indicated that capital expenditures for the rest of the year should be minimal and we do not expect additional wells to be drilled. 

Production is rising. Management reports that production has reached 3,200 boe/d, up from August production of 3,000 boe/d. Recall that production for the second quarter was slightly below our expectations, but we expected rates to rise as wells came on line.  With production finishing the quarter strong, we believe third quarter production should meet our projections for 3,050 boe/d and fourth quarter production of 3,200 boe/d which assumes some improvement from well optimization.


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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. 

Indonesia Energy Corp. (INDO) – Government contract extension adds value

Posted on by cpereira@noblefcm.com


Tuesday, September 12, 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.

Indo extended its Kruh Block contract five years with an increased after-tax split. Indo’s contract with Pertamina, the state-owned oil and gas company, now extends to September 2035. The amended contract increases Indo’s after-tax split to 35% from 15%. The extension, while not unexpected, comes after Indo had suspended drilling in the Kruh Block to complete a well workover. The favorable extension helps justify Indo taking its time in the Kruh Block as it completes a 3D seismic program to optimize drilling locations. We believe the government was willing to agree to the settlement as a way to spur Indo to increase drilling activity.

An operational update provides little new information. The company also updated investors regarding drilling plans in the Kruh Block and the Citarum Block. Management reiterated plans to drill 14 additional wells in the Kruh Block by the end of 2026 with the next well starting in 2024. Management did indicate that it expects to receive an environmental permit for seismic activity in the Citarum Block in 2023-4Q with work to begin in 2024-1Q. Our models assume one well drilled in the Citarum Block and two wells drilled in the Kruh Block in 2024.


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Hemisphere Energy Corporation (HMENF) – Production a bit light, but recent drilling will help

Posted on by cpereira@noblefcm.com


Friday, August 25, 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.

Production was a bit light, but new wells are coming. Production was flat in the June quarter versus last year and down 9% versus the previous quarter. Results were modestly below our expectations. Management indicated that it pushed drilling (and thus well completion) into the third quarter. Hemisphere remains on track to drill ten wells this year. The company reports that production is back up over 3,000 boe/d in August and appears heading towards a good jump in production in the December quarter when wells are completed.

Lower-than-expected production had an adverse affect on bottom-line financial results. With lower-than-expected production’ revenues, operating income, adjusted fund flow, and net income were all a few C$ million lower than projected in our models. Realized prices were in line with expectations as were operating costs and netbacks. 


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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.