Alvopetro Energy (ALVOF)
Company update shows execution of game plan
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.
Management reported an update on production, drilling, and price adjustments. July sales volume averaged 2,514 boe/d. This is an increase over June sales of 2,480 and May sales of 2,111 (includes 5 day processing plant shutdown). June-quarter volumes were up 7% year over year. Production for the month of June equates to roughly 15 mmcf/d gas equivalent. Production is expected to increase beginning in August with the Cabure gas processing facility expanding to 18 mmcf/d capacity.
Additional statistical interval data on recently-drilled wells looks favorable. The 183-B1 and 182-C1 wells both discovered potential net natural gas pay in multiple formations. Both wells are subject to testing. Both wells lie west of existing production in the Murucututu/Gomo project. The new field could be a critical component of Alvopetro’s long-term growth plans. On the Mururcututu project, the company is close to bringing a new well (183-1) to production and is extending pipeline to tie in another well (197-1) in the fourth quarter. New wells will help expand total production to the processing plant’s new capacity of 18 mmcf/d….
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