Alvopetro Energy Ltd V.ALV

5i Research comments

[Specific]

Q: Can you please comment on Alvopetro’s recent earnings. What is expected in terms of EPS growth over the next 3-5 years? Will they be able to organically grow production? How does the dividend payout ratio look in terms of cash flow?

 November 10, 2023

 

5I RESEARCH ANSWER:

Revenue of $12M was 5% off estimates; EPS of 15c missed estimates of 22c. Sales volumes did decline, but netbacks rose. Production was 1,839 b/d. Realized gas prices rose 17%. Per share cash flow was 33c, down 11% from last year. The stock is very cheap and it remains net debt-free with $16M cash. Cash flow is expected to grow 25% in 2024 and 10%+ in the following years. Of course, volumes and pricing can influence this growth substantially either eay. The company does have plenty of drilling locations, and has had some success. Production should be able to grow. 12-month payout ratio is a very low 25%. While this quarter was not 'great', it is priced well and growth is expected. Insiders own close to 11%. 

[Specific]

it would be nice to get a bit of a sp rebound and inch back up tp $9+

[Specific]

wtf......down 22% in the last 2 wks

[JayBanks]

  Nat gas is down 22% in the past month and our production was below expectations on the Q, which equals a 'miss'... How your surprised by this is more of a 'WFT' than the actual price action! We are lumped in with the sector being a gas play, even tho we are VERY disconnected with the gas market pricing as we are on fixed AECO agreements. Technically, we are disconnected