ALV:TSX.V; ALVOF:OTCQX

Alvopetro Energy Ltd.

Alvopetro is focused on oil and natural gas exploration and production in Brazil. Alvopetro's vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the onshore natural gas potential in the state of Bahia in Brazil, building off the development of our Cabure natural gas field and strategic midstream infrastructure.
ALV:TSX.V ALVOF:OTCQX

Expert Comments:

headshot of Bill Newman

Bill Newman, Mackie Research Capital

(6/2/20)
"Alvopetro Energy Ltd. is only weeks away from establishing first sales production from the Caburé natural gas field. Once on production, we expect the company to generate substantial free cash flow to fund an exploration program targeting the company's large prospect inventory, and potentially pay a cash dividend. Using CNE as a proxy, the establishment of first production could be the catalyst that rerates the stock. We reiterate our SPECULATIVE BUY recommendation and our $1.65 target price."

Alvopetro Energy's project in Brazil has a contract price that is twice the natural gas price in the U.S.
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David Lavigne, Trickle Research

(5/26/20)
"Alvopetro Energy Ltd. has arrived. . .management has delivered on the Caburé project, and that should translate into growing cash flow and better corresponding valuations. . .we think the story remains open ended. Specifically, there is the potential for additional increases to Caburé reserves as well as perhaps the delineation of Gomo reserves and/or others that may emerge."

Anish Kapadia, Hannam & Partners

(5/15/20)
"The new agreement with Bahiagás will allow Alvopetro Energy Ltd. to receive about $1.1M in prepayment revenue for gas in May and June 2020 in return for the company providing a 15% discount to the contractual price. . .as part of the amendment, upon the start of supply, Bahiagás has also agreed to double the firm deliveries under Alvopetro's contract to 10.6 MMcf/d and reduce any potential supply failure penalties through 2020E, reducing the risk."

headshot of Bill Newman

Bill Newman, Mackie Research Capital

(5/15/20)
"Alvopetro Energy Ltd. announced amendments to its long-term sales agreement with the Bahia state natural gas distribution company, Bahiagás. Bahiagás has agreed to double the firm natural gas deliveries to 10.6 MMcf/d through to the end of 2020. . .Bahiagás has agreed to commence prepayment of natural gas at a rate of 4.2 MMcf/d. In return, Alvopetro will provide a 15% discount off the current contractual price for any prepaid natural gas during May and June 2020."

This development benefits Alvopetro Energy in a globally uncertain time.
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Alvopetro Energy finishes construction of its new transfer pipeline and gas treatment facility.
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Bill Newman, Mackie Research Capital

(4/22/20)
"The COVID-19 pandemic has had limited impact on Alvopetro Energy Ltd.'s operations, and first sales production from the Caburé natural gas field remains on track for June 2020, at which time the company should be generating significant free cash flow. . .once on production, we expect Alvopetro to generate substantial free cash flow to fund an exploration program in 2021 targeting its large prospect inventory and also pay a dividend."

Anish Kapadia, Hannam & Partners

(4/22/20)
"Alvopetro Energy Ltd. has received regulatory approval for commissioning of its transfer pipeline and a gas treatment facility. Commissioning commenced yesterday, and first gas has been delivered to the Caburé facility, with commissioning expected to be complete next month."

More Expert Comments

Experts Following This Company

Anish Kapadia – Hannam & Partners
David Lavigne, Senior Analyst, Managing Partner – Trickle Research
headshot of Bill Newman
Bill Newman, Senior Analyst, Energy – Mackie Research Capital

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.See disclaimer for more details.

Investing Highlights
 
Precedent setting natural gas development, reserves discovered, delineated, and development complete.
 
Attractive long-term gas sales agreement with floor price of US$5.21/mmbtu.
 
Strategic midstream infrastructure – constructed first independently owned gas plant in Brazil
 
4 Balanced reinvestment and stakeholder return model. Dividends expected to start in 2021.
catalyst Calendar
Q2
2020
Q4
2020
Long-term testing of Gomo gas resource to define deep basin development opportunity (2021+).
Q4
2020
Conventional exploration inventory (3 to 5 years)