'Timing is Right' to Invest in Natural Gas Firm Weeks from Production Start

Source: Streetwise Reports 06/08/2020

The rationale for this view concerning Alvopetro Energy is explained in a Mackie Research Capital Corp. report.

In a June 2 research note, Mackie Research Capital Corp. analyst Bill Newman purported that Alvopetro Energy Ltd. (ALV:TSX.V; ALVOF:OTCQX) currently presents a buying opportunity as its stock has not yet responded to its announcement of impending production.

The company is on track to commence sales production from its Caburé natural gas field in Brazil before or on July 1, 2020. “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,” commented Newman.

As a comparator, Newman used Canacol and the trading pattern around its announcement and commencement of natural gas production in Colombia in 2016. “Despite a fully funded project, the market did not fully reward Canacol until only after production had commenced,” he noted. When the market reacted, the stock increased to CA$4.50 per share from CA$3.30. This trend also held with Canacol in two other instances, with production increases.

Further, Newman highlighted that Alvopetro is trading at a deep discount to its net asset value, as determined by Mackie, of CA$2.15 per fully diluted share.

Thus, Mackie Research has a Speculative Buy recommendation and a CA$1.65 per share target price on Alvopetro. In comparison, the stock is trading now at about CA$0.67 per share.

Read what other experts are saying about:

  • Alvopetro Energy Ltd.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Alvopetro Energy. Click here for important disclosures about sponsor fees.
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Disclosures from Mackie Research, Alvopetro Energy Ltd., Update, June 2, 2020

RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
1. None Applicable.
2. Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.

ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

( Companies Mentioned: ALV:TSX.V; ALVOF:OTCQX,
)

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