Tag: Oil & Gas

InPlay Oil (IPOOF) – Operating and financial results in line with expectations

Posted on by cpereira@noblefcm.com


Thursday, March 14, 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.

Quarterly production in line with recently reduced guidance. InPlay reported 2023 production volume of 9,025 boe/day consistent with guidance of 9,000-9,100 boe/day. We had expressed concern that the previous decline in guidance reflected a sharper production decline curve than previously expected. Management assures that the decline curve has not changed and the decline reflects a shift towards drilling oil wells which have a lower initial production rate than gas wells. 

InPlay released a reserve report for the 2023 year end. The reserve report shows a modest reduction in reserves and reserve value implying a reserve replacement rate slightly below 1.0 times. The calculation is somewhat complicated by changing assumptions regarding assumed energy pricing and recoverability. The report indicated a finding, development and acquisition cost of $23.36/boe which is attractive compared to current 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. 

Drivers Brace for Higher Gas Prices as Oil Costs Spike

Posted on by slightbourne@noblecapitalmarkets.com

Motorists across the nation are once again feeling the pinch at the gas pump as oil prices have climbed sharply in recent months. After a brief reprieve earlier this year, the national average price for a gallon of regular gasoline has risen over 18 cents in just the last month to around $3.40 according to AAA data. Experts warn that prices could jump another 10-15 cents over the next couple of weeks alone.

The primary culprit behind the surge is the rising cost of crude oil. Both the U.S. benchmark West Texas Intermediate and the global Brent crude have seen prices spike, with WTI crude now hovering around $79 per barrel and Brent north of $83 per barrel. Just a few months ago, WTI started 2024 just over $70 a barrel.

As crude gets more expensive for refiners to purchase, the costs get passed along to consumers in the form of higher gasoline prices. Tighter supplies and seasonal factors are also contributing to price increases at the pump.

“This week, Gulf Coast refiners began transitioning to more expensive summer blend gasoline, which accounts for nearly 50% of the nation’s refining capacity,” said Andy Lipow of Lipow Oil Associates. “That switch means higher prices are ahead.”

California drivers are being hit particularly hard, with the statewide average price per gallon already at a lofty $4.88 as of Wednesday. Refinery maintenance, lower inventory levels, and the changeover to summer blends have caused California gas prices to jump around 25 cents in recent weeks according to Lipow.

The overall lower supply situation is being exacerbated by disruptions at some key refineries. For example, BP’s massive Whiting refinery in Indiana, the largest in the Midwest, is still recovering from a recent power outage caused by cold weather that impacted production.

Historically, spring represents the start of the annual rise in gas prices as refiners transition to summer blends and demand picks up with more drivers hitting the road after the winter months. Consumer demand typically peaks during summer’s peak driving season.

While higher energy costs were one of the main factors driving an unexpected increase in inflation in February, rising gas prices take an oversized toll on household budgets. The latest Consumer Price Index data showed the gasoline index spiked 3.8% last month alone after declining in January.

Analysts caution there is likely more pain at the pump on the horizon with the summer driving season still ahead. Unless crude oil prices reverse course or refining capacity increases, American drivers can expect gasoline to remain unusually expensive compared to this time last year.

“With the industry having less refining capacity and the economy remaining relatively strong, I expect retail gasoline prices to set new records across the nation in the coming months,” Lipow stated.

Whether taking a road trip for spring break or commuting to and from work and activities, consumers have little choice but to absorb the impact of elevated gas prices cutting into other spending. Budgets will be further squeezed if crude oil costs remain stubbornly high and gasoline supply remains tight.

Alvopetro Energy (ALVOF) – Production Volumes Rebounding Nicely

Posted on by cpereira@noblefcm.com


Thursday, December 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.

Alvopetro released November production volumes that accelerated its recent upward trend. Alvopetro reported November gas production of 12.9 mmcfe/day (up from 10.6 mmcfe/day in October), oil production of 15 boe/day (vs. 8 boe/day), and NGL production of 105 boe/day (up from 67 boe/day). Production was depressed over the summer due to allocation issues with a joint venture partner and demand issues from Bahia Gas, Alvopetro’s primary natural gas customer. Total production was 2,264 boe/day in November.

Total production remains below peak levels but is approaching that level quickly. Production peaked at 2,771 MBOE/day in the quarter ended March 31, 2023. However, with production rising 425 MBOE/day in the most recent month, it is quickly returning to past production levels. Importantly, oil and natural gas production is the fastest growing component of Alvopetro energy portfolio providing additional diversification and lessening its reliance on Bahia Gas.


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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. 

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.


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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. 

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. 

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.


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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. 

Alliance Resource Partners (ARLP) – Embarking on a New Era of Growth

Posted on by cpereira@noblefcm.com


Wednesday, February 01, 2023

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.

Another stellar quarter. Alliance reported fourth quarter EBITDA and earnings per unit (EPU) of $293.9 million and $1.63, respectively, compared to $130.2 million and $0.40 during the prior year period. We had forecast net income and EPU of $272.8 million and $1.42. The partnership’s coal and oil & gas royalties segments performed stronger than expected due to higher volumes and commodity prices.  

Updating estimates. We have increased our 2023 EBITDA and earnings per unit estimates to $1.18 billion and $5.90, respectively, from $1.12 billion and $5.85. Based on contracted coal sales volumes in 2023 and 2024, the outlook for cash flow growth appears favorable. Within the oil and gas royalty segment, volumes are expected to benefit from recent acquisitions, including the purchase of 2,682 net oil and gas royalty acres in the Permian Basin which is expected to close shortly with an effective date of January 1, 2023. 


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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 held a call updating investors

Posted on by cpereira@noblefcm.com


Tuesday, January 24, 2023

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

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

Production from first drilled well is coming. The Eoff PPC #3 well in the Breedlove Field was completed in October and is going through a Flowback Recovery Period (removal of liquids). It was shut down due to freezing temperatures. Management expects full production by the end of February and will disclose flow rates then. The company hinted that it will probably go forward with converting the well to a horizontal well at an additional $1.1 million cost.

Cash is tight. Permex’s cash position is down to $2.5 million, not enough to drill another well. The company is opposed to taking on debt (which we agree with) because debt is the Achilles heel of start-up energy companies should energy prices decline. The company discussed selling acreage but indicated that it neither has a large contiguous field to sell (outside of its Breedlove Field position) nor does it have small, producing property that might be of interest to energy companies. Management would like to issue stock but not at the current stock price of 4% of net asset value.


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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. 

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.


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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. 

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.


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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. 

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.


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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. 

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.


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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) – 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.


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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.