Galp Energia — An Interesting High-Yield Energy Play

Dividends Forever
3 min readNov 25, 2023

Cheap, profitable, small-cap energy stocks.

That’s what we’re looking at today.

Galp Energia ($GLPEY) is a Portuguese energy firm. The company drills for oil in Brazil and Mozambique, giving their business a low production cost per barrel.

And Galp also owns an oil refinery in Portugal, as well as solar farms there.

Today’s article digs deeper into this business, and why it might be an interesting dividend investment.

What Makes Galp Energia Special?

Latin American oil stocks are a trendy investment sector.

Earlier in the year, investors clamored for beaten-down shares of Colombia’s Ecopetrol and its 20%+ starting dividend. And Brazil’s Petrobras is a perpetual favorite among value investors on Seeking Alpha.

Even Argentinian energy conglomerate YPF has seen its share surge 43.93% since the election of Javier Milei.

Galp Energia is different from these other firms, because Galp is a European company that operates in Latin America. In my opinion, this offers more financial stability than most Latin American energy producers.

Galp conducts its business in Euros, a currency that doesn’t have the wild price swings of Argentinian or Colombian pesos.

On top of this, Galp has incredibly low oil production costs.

The company’s Brazilian wells had an average production cost of $1.80 USD per barrel in the second quarter of 2023. And an average production cost of $2.90 USD per barrel in the third quarter of 2023.

Oil companies have to pay royalties on each barrel extracted. And Galp paid about $12 per barrel in the second and third quarters of 2023.

All-in-all, Galp Energia is able to produce oil for around $25 per barrel.

And as long as oil stays above the $25 mark — it’s currently trading at $75.54 — Galp should make money.

Galp Energia Fundamental Analysis

Galp Energia is a European company that primarily trades on the Euronext Lisbon stock exchange. ADR shares are listed in the United States…

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