Value Comes Back to Oil & Gas Equities (HNRC, CLNE, ETRN, AGYP, ALVOF)

The energy sector’s 12-month performance has made it one of the few positive stories in the bleak markets gaining 28%.  The recent drop in oil prices has allowed some value to come back into equities in the sector.  There are a few investors should start researching today.

Houston Natural Resources, Corp. (OTCMKTS: HNRC) has released some monster news.  The company will be spinning off its Non-Energy Assets into a separate company.  Due to the size of these assets ($53 million) the company expects an opening share price of around $5.  In terms of the spinoff HNRC shareholders of record prior to the end of Q3 will receive $1.75 worth of equity in the new company for every HNRC share they own.

The spinoff dividend alone would pay a triple-digit premium on shares at this price.   HNRC investors can expect value from not only the dividend, but the growth of its remaining energy-focused assets.

Houston Natural Resources will focus on its energy assets post spinoff, which is expected in late 2022.  These assets include but are not limited to 83 wells to be reworked at a property with a reported 33 million barrels of oil and its wastewater treatment facilities, including a new acquisition with an 88% profit margin that will add $10 million in assets to HNRC’s book.

HNRC’s twelve-month trailing earnings are $0.27 per share, it’s extremely rare to find a company trading below its EPS.  According to Simply Wall St. the median PE ratio for an energy company is 17.8.  At that ratio HNRC’s valuation would be $4.80 per share.  Naturally, investors are starting to flock to HNRC.  Start your research here:

Clean Energy Fuels Corp. (Nasdaq:CLNE) announced it will release financial results for the second quarter of 2022 on August 4, 2022 after market close, followed by an investor conference call at 4:30 p.m. with President and Chief Executive Officer of Clean Energy Andrew J. Littlefair and Chief Financial Officer Robert M. Vreeland.  CLNE investors will hope to see results as positive as HNRC’s.  

CLNE claims to be “the country’s largest provider of the cleanest fuel for the transportation market.”  Its renewable natural gas allows thousands of vehicles, from airport shuttles to city buses to waste and heavy-duty trucks, to reduce their amount of climate-harming greenhouse gas.

Equitrans Midstream Corporation (NYSE: ETRN) announced the early results of the previously announced tender offers by its wholly owned subsidiary, EQM Midstream Partners, LP, to purchase for cash its outstanding notes.  The maximum aggregate principal amount of the Notes it is offering to purchase in the Offers from $200 million to $500 million with a cap on the 2025 Notes of $300 million in aggregate principal amount.

Allied Energy Corp (OTCMKTS: AGYP), recently expanded its natural gas holdings through the acquisition of the Thiel Lease and Well.  The Thiel Well was drilled by Union Pacific Resources in 1996 and is located near Brenham Texas. The Thiel Well was drilled as a dual lateral well and, when completed, reported an absolute open flow rate of 44,000,000 cubic feet of natural gas per day. During its first 3 years of operation, the Thiel Well produced approximately 3,000,000,000 cubic feet of natural gas to date.

Allied Energy Corp. is an energy development and production company acquiring oil & gas reserves in some of the most prolific hydrocarbon-bearing regions of the United States. The Company specializes in the business of reworking & re-completing ‘existing’ oil & gas wells located in the thousands of mature oil & gas producing fields across the United States. 

Alvopetro Energy Ltd. (TSXV: ALV) (OTCMKTS: ALVOF) announced a multizone discovery on its 183-B1 exploration location.  ALVOF completed drilling the 183-B1 exploration well on its 100% owned and operated Block 183 in the Recôncavo basin and, based on open-hole wireline logs and fluid samples confirming hydrocarbons, the well has discoveries in multiple formations with a total of 34.3 metres of potential net hydrocarbon pay, with an average porosity of 10.6% and average water saturation of 29.0%.

ALVOF also updated June sales volumes which averaged 2,480 boepd, including natural gas sales of 14.2 MMcfpd, associated natural gas liquids sales from condensate of 102 bopd and oil sales of 5 bopd, based on field estimates.  Its sales volumes averaged 2,359 boepd in the second quarter of 2022, consistent with sales volumes in the second quarter of 2021 and a decrease of 6% from the first quarter of 2022 due to a planned five-day shutdown in May scheduled to complete advance work for its gas plant expansion.

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