BUY recommendation - CAD 1.85 target ALV (CAD$0.90) – Target: $1.85 – BUY
[PDF] Gomo Resource Provides Low Risk Long-Term Upside
• Yesterday, ALV announced an independent assessment of contingent and prospective resource of the Company’s Gomo natural gas play.
• The risked contingent resource is estimated at 3.5 million MMboe with a before tax net NPV-10% of US$37.7 million (C$0.47/sh). Initial production could commence in 2023 and peak at 4.5 MMcf/d in 2024.
• The risked prospective resource is estimated at 12.1 MMboe with a before tax NPV-10% of US$144.8 million (C$1.82/sh). Initial production could commence in 2024 and peak at 15.9 MMcf/d in 2026.
• The Gomo resource provides ALV with the potential for significant, low decline production additions in the not-too-distant future, with very low geological risk.
• We maintain our BUY recommendation and our $1.85 target price
By Bill Newman – 2021/03/24