Tag: Oil & Gas

InPlay Oil (IPOOF) – Production slows, expenditures rise, and gas prices drop

Posted on by cpereira@noblefcm.com


Thursday, January 19, 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, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

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

Production slows. Management projects 2022 production of 9,100-9,200 BOE/d versus 11/9/22 guidance of 9,150-9,400. Downtime at a third party gas facility led to a 435 BOE/d decrease in production. Cold weather also delayed getting wells on line. We have reduced our estimate to 9,162 BOE/d from 9,280. The company projects 2023 production of 9,500-10,000 BOE/d down from 9,900-10,400. We have lowered our forecast to 10,000 BOE/d from 10,400 to be within management’s guidance. We are comfortable being at the upper end of guidance given InPlay’s history of surpassing guidance (until the most recent quarter).

Expenditures rise. The company projects 2022 capital expenditures of C$76-78 million up from C$70-72 million due the acceleration of a drilling program. 2023 capital expenditure guidance increased to C$75-80 million (versus C$69-71 million) despite the drilling of 0.5 net wells less than previously assumed. Management attributes the higher capital expenditures mainly to two gas facility upgrades but also notes that it plans to drill longer wells in 2023 than in 2022.


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. 

Permex Petroleum (OILCD) – Uplisting and offering postponed, models adjusted for earlier reverse stock split

Posted on by cpereira@noblefcm.com


Friday, November 18, 2022

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

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

Permex Petroleum decided to postpone its listing on the NYSE American due to market conditions. The company also indicated that a registration statement with the SEC has not yet become effective. The shares of Permex (now trading as OILCD) have fallen approximately 50% following the announcement of a 2 million (later raised to 3.6 million) common share offering. The offering was to be completed in conjunction with the move to the NYSE. Prior to the uplisting and registration announcement, Permex completed a 1-60 reverse stock split.

We are adjusting our estimates and price target to reflect a lower share count associated with the reverse stock split. Our new price target is now $40 per share versus our pre-stock split price target of $4 per share. We have increased our price target by less than a 60-1 multiple due to the following reasons. We have increased the discount rate we are using for the company to reflect what we view as increased financing risk. In addition, we have slowed the assumed pace of new well drilling to one every other quarter instead of one per quarter. We also believe the company will focus primarily on less expensive, but less productive, vertical wells until it starts generating cash flow to fund drilling.


Get the Full Report

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) – Rising cash flow allows dividend increase and share repurchase

Posted on by cpereira@noblefcm.com


Wednesday, November 16, 2022

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

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

Alvopetro reported 2022-3Q results significantly higher than last year and above our expectations. Revenues rose 67% due to a 7% increase in production and a 58% increase in gas prices. Higher sales translated into higher cash flow ($13.8 million versus $7.2 million) and earnings ($8.8 million versus $0.0).

Results were due to operations improvements and are likely to continue. The company expanded its gas processing facilities in July raising capacity to 3,000 boe/d. With quarterly results, management indicated that October total production averaged 2,720 boe/d, a nice rise above 2022-3Q levels of 2,642 boe/d.


Get the Full Report

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 approved to list on the NYSE, files offering registration

Posted on by cpereira@noblefcm.com


Friday, November 11, 2022

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

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

Permex announced it has received approval to uplist to the NYSE. Shares are expected to begin trading on November 15 under the symbol OILS (warrants will trade under OILSW). The uplisting follows a October 31st announcement that Permex would consolidate outstanding shares on the basis of a one for every sixty pre-consolidation shares. We indicated at the time that we believed management was doing a reverse stock split as a prerequisite to uplisting on the NYSE. We believe listing on the NYSE will greatly enhance the company’s ability to attract investor attention and unlock Permex’s hidden value.

Permex has filed an offering registration. On November 4th, Permex file a S-1 Registration Statement with the SEC to offer 2 million common shares (post reverse stock split currently trading under the symbol OIL on the Toronto exchange and on the OTC under the symbol OILCD.) On November 9th, the company filed an addendum increasing the share offering to 3.6 million shares which now include a warrant to purchase shares at a 125% premium to the offering price. The offering is being done in conjunction with the uplisting implying it will be completed by November 15th.


Get the Full Report

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) – Results below elevated expectations but production growth justifies dividend initiation

Posted on by cpereira@noblefcm.com


Thursday, November 10, 2022

InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.

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

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

Third-quarter results were below expectations due to lower-than-expected energy pricing. Production levels were in line with expectations and management guidance given on September 29. Realized oil and gas prices were well below U.S. reported oil and gas prices when adjusted to Canadian prices, reflecting a widening basis discount for western Canada production. We will incorporate a widening basis differential going forward.

InPlay is able to offset a weakening pricing environment with ever-improving production results. Management provided production guidance for 2023-25 for the first time. Guidance was well above production levels assumed in our models and reflects an acceleration of capital investments going forward. We believe increased investment is prudent at current payback rates of less than one year. We also believe management’s commitment to higher spending levels is a positive sign that it believes it has ample areas to drill at attractive returns.


Get the Full Report

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 (OILCF) – Breedlove Field Well A Success – Should Be First Of Many

Posted on by cpereira@noblefcm.com


Thursday, November 03, 2022

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

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

Permex announced that it had reached target depth on its Eoff PPC #3 well with positive results. The well, the first drilled by Permex in the Breedlove Field, encountered multiple pay zones with favorable results according to management. A decision regarding drilling horizontally (cost of $3-4 million versus $2-3 million for a vertical well) has not been made. Permex acquired the Breedlove Field property in October 2021 which included 12 producing wells, 9 shut-in wells, and significant fill-in drilling opportunities. The Breedlove Field is in Martin County, one of the most successful counties for drilling in the Permian Basin. Successful results were expected but are a positive development, nonetheless.

Reworked wells continue to produce at high volumes. Permex recompleted five wells earlier this year. Initial production of 50 BOEPD has stabilized at 35 BOEPD, increasing total firm production to 71 BOEPD. This is ahead of our projections and meets our expectations for production for the first quarter of next year. We view well completions as a quick and favorable way to generate additional free cash flow in today’s high oil price environment. We expect the company to perform several well recompletions each quarter in addition to drilling a vertical or horizontal well.


Get the Full Report

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. 

Alliance Resource Partners (ARLP) – Building Momentum Into 2023 and Beyond

Posted on by cpereira@noblefcm.com


Wednesday, November 02, 2022

ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.

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

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

Enviable year-over-year comparisons. Alliance reported third quarter net income of $164.6 million or $1.25 per limited partner unit compared to $57.5 million or $0.44 per limited partner unit during the prior year period. The company generated EBITDA of $250.2 million compared to $135.9 million during the prior year period and free cash flow increased to $244.5 million from $120.5 million. Third quarter financial results reflected higher coal sales prices and volumes which increased 40.5% and 8.1%, respectively, along with greater oil & gas royalty prices and volumes which rose 31.6% and 33.1%. Compared to the prior year period, consolidated revenues increased 51.3% to $628.4 million.

Updating estimates. We have made several adjustments to our model to reflect updated 2022 guidance, along with estimated distributions to and undistributed earnings attributable to participating securities. We have lowered our 2022 EBITDA and adjusted EPU estimates to $919.1 million and $4.48, respectively, from $945.3 million and $4.85. We lifted our 2023 EPU and EBITDA estimates to $5.85 and $1.116 billion, respectively, from $5.75 and $1.077 billion. Looking ahead to 2023, Alliance expects to boost coal sales by roughly two million tons and expects coal pricing per ton to increase by roughly 10% compared to the 2022 average. Within the oil and gas royalty segment, volumes are expected to benefit from two recent acquisitions that added 1,200 producing wells, 101 wells to be completed and 98 permitted locations on the acquired acreage.


Get the Full Report

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. 

Indonesia Energy Corp (INDO) – Latest Well Looks Successful, Future Drilling Delayed

Posted on by cpereira@noblefcm.com


Friday, October 21, 2022

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

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

Kruh Well 28 finds oil formation in addition to previously announced gas reservoir. Indo reported reaching final depth in its fourth well in the Kruh field. As has been the case with the other three wells, oil has been discovered, this time with a wider oil band that had been expected. The company previously reported discovering natural gas at shallower levels as had been the case in Kruh Well 27.  We view drilling in the Kruh Field as largely developmental so the successful discovery of hydrocarbons was not a surprise. It will take at least a month to complete the well before we can learn flow rate information, but management maintains that the wells have a twelve-month payback at current oil prices.

Well success prompts further seismic studies. Indo is planning to conduct new seismic operations across the entire Kruh Block to optimize drilling locations. The company still plans on drilling 18 wells in the block (four have been completed). Seismic studies will push back the drilling program twelve months into the 2024-25 time frame and will not begin until Kruh 27 and 28 have been brought on line. We had modeled six wells in 2023 and eight in 2024 and are pushing all drilling back a year. Indonesia Energy has faced a series of delays in its drilling program due to COVID, weather, and other factors.


Get the Full Report

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.