Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Alvopetro Energy Ltd (TSXV: ALV) is a Canada-based resource company engaged in the exploration, acquisition, development, and production of hydrocarbons in Brazil. It generates revenue from Natural gas, oil, and condensate sales, and all of its revenue is derived from Brazil.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~21.70% of the total shareholding. Rambutan Trading, Ltd. and Wright (John David) hold a maximum stake in the company at ~­­­10.17% and ~4.27%, respectively.

1.4 Key Metrics:

The company reported sequential growth in its average daily sales on the quarterly basis while for FY 2022 it witnessed higher realization prices, which is a key positive. Additionally, the company is reporting growing cash flows and uplifted dividend distribution figures demonstrating its strength and adaptability.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, such as announcement regarding higher dividend distribution and an update on the 197(1) well on its Murucututu natural gas field.

2.2 Insights on FY 2022 Financial Performance:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~14.87% in 1 month and ~0.13% over the last 3 months respectively. Moreover, the stock is trading above the average of 52-week high price of CAD 8.59 and 52-week low price of CAD 7.26 providing an opportunity to ride the trend.

4.2 Fundamental Valuation

Valuation Methodology: EV to EBITDA Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 27, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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