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Alberta Co. Boosts Natural Gas and Oil Sales by 67% in Q3
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Shares of Alvopetro Energy Ltd. traded 13% higher yesterday after the company reported record Q3/22 sales, raised its quarterly dividend by 50%, and announced plans for a robust NCIB share buyback program.

After U.S. markets closed for trading yesterday, Alvopetro Energy Ltd. (ALV:TSX.V; ALVOF:OTCQX), which focuses on onshore oil and gas production in Brazil, yesterday announced operating and financial results for the third quarter of 2022 ended September 30, 2022.

The company stated that it was successful in delivering another record quarter of funds flow from operations of US$13.3 million.

The firm highlighted that it is continuing in its mission to increase return to stakeholders and announced that it is increasing its quarterly dividend by 50% and intends to initiate a share buyback program under the framework of a normal course issuer bid (NCIB).

The company advised that its board of directors has approved a 50% increase in its quarterly dividend from US$0.08 to US$0.12 per share. 

Alvopetro Energy's President and CEO, Corey C. Ruttan, stated, "With continued strong operating and financial results, and with our debt now fully repaid, we are pleased to announce a 50% increase in our quarterly dividend following on the 33% increase earlier this year. Our dividend program and the proposed NCIB will provide us with maximum flexibility to meet our strategy to maintain a balanced organic growth and stakeholder return model."

Its board of directors has approved a 50% increase in its quarterly dividend from US$0.08 to US$0.12 per share. The firm listed that the cash dividend is scheduled for payment on January 13, 2023, to shareholders of record as of the close of business on Friday, December 30, 2022.

Alvopetro mentioned that its board of directors additionally granted authorization for the company to submit a request for a share buyback program. The company said that the application will be submitted to repurchase its own shares under a Normal Course Issuer Bid (NCIB) as outlined in Canadian securities law. The firm stated that initiating an NCIB buyback program will give it additional flexibility in managing its efforts to maximize returns to shareholders.

The company reported that during Q3/22, daily sales increased by 7% to 2,642 barrels of oil equivalent per day (boe/d), compared to 2,459 boe/d in Q3/22. The firm added that daily sales rose 12% sequentially over the from 2,359 boe/d posted in Q2/22.

The company advised that during Q3/22, net natural gas, oil, and condensate sales increased by 67% to US$16.67 million, compared to US$9.96 million in Q3/21. 

The company completed the expansion of its gas processing facility In July 2022 to 500,000 m3/d (18 MMcf/d).

The firm advised that the higher processing capacity helped contribute to the higher production and sales volumes in Q3/22.

The company indicated that its natural gas price had been reset to the new ceiling price of US$10.22/MMBtu as of August 1, 2022. The firm said that during Q3/22, all natural gas sales were made at the ceiling price and stated that its average realized natural gas prices in the quarter increased to US$11.18/Mcf, versus an average price of US$7.07/Mcf in Q3/21.

The company advised that during Q3/22, net natural gas, oil, and condensate sales increased by 67% to US$16.67 million, compared to US$9.96 million in Q3/21. The firm attributed the increase to a combination of higher year-over-year commodity prices and higher average daily sales volumes.

The firm stated that in Q3/22, it generated cash flows from operating activities of US$13.8 million, or US$0.37 per diluted share, compared to US$7.2 million, or US$0.20 per diluted share in Q3/21.

The company stated that for Q3/22, it recorded a net income of US$8.8 million versus a net loss of US$0.02 million in Q3/21.

Alvopetro indicated that at the end of Q3/22, it had a net working capital surplus of US$12.2 million, which included US$17.4 million in cash and cash equivalents held on its balance sheet.

The firm listed based on field estimates, during the first month of Q4/22 (October 2022), sales volumes continued to show improvement averaging 2,720 boe/d, which consisted of natural gas sales of 15.6MMcf/d and natural gas liquids from a condensate of 124 bop/d.

Alvopetro Energy is an independent Calgary, Alta.-based energy firm that is engaged in developing and operating upstream and midstream oil and natural gas assets in Brazil. The firm is primarily focused on unlocking the onshore natural gas potential at properties in Brazil's Bahia state and building out the development of its Caburé and Gomo natural gas projects, and constructing strategic associated infrastructure assets.

Alvopetro began yesterday with a market cap of around US$149.86 million with approximately 34.12 million shares outstanding. ALVOF shares opened 9% higher yesterday at US$4.80 (+US$0.40, +9.09%) over the previous day's US$4.40 closing price. The stock has traded yesterday between US$4.50 and US$5.22 per share and closed for trading at US$6.45 (+US$0.62, +10.45%). 

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1) Stephen Hytha wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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