Tag: ALVOF

Research News and Market Data on ALVOF

Jul 06, 2023

CALGARY, AB, July 6, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces June 2023 average sales volumes of 2,068 boepd, including natural gas sales of 11.8 MMcfpd, associated natural gas liquids sales from condensate of 99 bopd, and oil sales of 6 bopd, based on field estimates. Overall, our sales volumes averaged 1,975 boepd in the second quarter of 2023.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltdYouTube – https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

www.alvopetro.comTSX-V: ALV, OTCQX: ALVOF

SOURCE Alvopetro Energy Ltd.

Monday, July 03, 2023

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initial Bom Lugar well successful. Alvopetro completed its BL-06 well encountering a larger-than-expected pay zone confirming previously announced results for the well. The well is important because it is 100% owned and is primarily oil unlike current wells in the Cabure Field. Alvopetro management spoke about the well results in a recent Noble-sponsored non deal road show in St. Louis and New York. 

The well will lead to expanded drilling. Alvopetro was very pleased with the results and said that successful production testing would lead to an expanded development drilling program. Management had previously indicated that it plans to drill two developmental wells in Bom Lugar in 2023. In the press release, management indicated its intent to mobilize the drilling rig to the Murucututu natural gas field while the Bom Lugar well is production tested. 

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Research News and Market Data on ALVOF

Jun 15, 2023

CALGARY, AB, June 15, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces that our Board of Directors has declared a quarterly dividend of US$0.14 per common share, payable in cash on July 14, 2023, to shareholders of record at the close of business on June 30, 2023. This dividend is designated as an “eligible dividend” for Canadian income tax purposes. 

Dividend payments to non-residents of Canada will be subject to withholding taxes at the Canadian statutory rate of 25%.  Shareholders may be entitled to a reduced withholding tax rate under a tax treaty between their country of residence and Canada.  For further information, see Alvopetro’s website at  https://alvopetro.com/Dividends-Non-resident-Shareholders.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltd

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning the Company’s plans for dividends in the future, the timing and amount of such dividends and the expected tax treatment thereof. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to equipment availability, the timing of regulatory licenses and approvals, the success of future drilling, completion, testing, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the impact of the COVID-19 pandemic and other significant worldwide events, the performance of producing wells and reservoirs, well development and operating performance, foreign exchange rates, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, expectations regarding Alvopetro’s working interest in properties and the outcome of any redeterminations, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. In addition, the declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Research News and Market Data on ALVOF

May 04, 2023

CALGARY, AB, May 4, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces April 2023 average sales volumes and an operational update and timing for release of our Q1 2023 results and earnings call.

April 2023 Sales Volumes

April sales volumes averaged 1,972 boepd, including natural gas sales of 11.3 MMcfpd and associated natural gas liquids sales from condensate of 84 bopd, based on field estimates. Sales volumes in April declined from our average Q1 2023 of 2,767 boepd. April sales volumes were lower due to reduced demand during the month from Bahiagás as well as higher nominated volumes from our partner at the Caburé unit. We anticipate May sales volumes to continue at rates similar to average volumes in April. Future sales volumes will be dependent on available Caburé unit production, production additions from our Murucututu field with the development work planned this year and overall demand from Bahiagás.

Operational Update

In March, we commenced stimulation operations at our 197(1) well on our Murucututu natural gas field. While operations have progressed slower than initially scheduled, we have now successfully stimulated three of four planned intervals at the well, injecting a total of 89 tonnes of sand into the formation. Stimulation of the final interval is expected to be completed shortly and we expect the well to be on production this month. Following completion of stimulation operations, we plan to drill two Murucututu fit-for-purpose development wells in the second half of 2023.

On our Bom Lugar field, we spud our first development well (BL-06) on April 30th and drilling is underway. The BL-06 well is targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations. We expect drilling to be completed late in the second quarter.

Upcoming Q1 2023 Results and Live Webcast

Alvopetro anticipates announcing first quarter 2023 results on May 10, 2023, after markets close, and will host a live webcast to discuss the results at 8:00 am Mountain time, on May 11, 2023. Details for joining the event are as follows:

Date: May 11, 2023Time: 8:00 AM Mountain/10:00 AM EasternLink:  https://us06web.zoom.us/j/89193926478Dial-in numbers: https://us06web.zoom.us/u/kcmVqG8cd9Webinar ID: 891 9392 6478

The webcast will include a question and answer period. Online participants will be able to ask questions through the Zoom portal. Dial-in participants can email questions directly to socialmedia@alvopetro.com.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltdYouTube –https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning the anticipated timing of completion of the 197(1) stimulation and drilling of the BL-06 well, anticipated timing of production commencement from the 197(1) well, expected natural gas allocations from the Caburé unit, natural gas sales and gas deliveries under the Company’s long-term gas sales agreement, plans relating to the Company’s operational activities, proposed exploration development activities and the timing for such activities and exploration and development prospects of Alvopetro. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the performance of producing wells and reservoirs, foreign exchange rates, well development and operating performance, the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

Research News and Market Data on ALVOF

Apr 05, 2023

CALGARY, AB, April 5, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces March 2023 average sales volumes of 2,690 boepd, including natural gas sales of 15.4 MMcfpd, associated natural gas liquids sales from condensate of 120 bopd and 8 bopd of oil sales, based on field estimates. Overall, our sales volumes averaged 2,767 boepd in the first quarter of 2023, an increase of 2% from the fourth quarter of 2022 and a new quarterly record for Alvopetro.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltdYouTube –https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:bbls                        =              barrelsboepd                     =             barrels of oil equivalent (“boe”) per daybopd                       =             barrels of oil and/or natural gas liquids (condensate) per dayMMcf                      =             million cubic feetMMcfpd                  =             million cubic feet per day

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning the expected natural gas sales and gas deliveries under the Company’s long-term gas sales agreement. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the performance of producing wells and reservoirs, foreign exchange rates, well development and operating performance, the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

www.alvopetro.comTSX-V: ALV, OTCQX: ALVOF

SOURCE Alvopetro Energy Ltd.

Research, News and Market Data ALVOF

Mar 21, 2023

CALGARY, AB, March 21, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) is pleased to announce a 17% increase in our quarterly dividend, to US$0.14 per common share, our financial results for the year ended December 31, 2022, filing of our annual information form, an automatic share repurchase plan, and an operational update.  

All references herein to $ refer to United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

President & CEO, Corey C. Ruttan commented:

“We are very pleased with our 2022 results, from revenues of $63.5 million we generated $49.9 million of funds flow from operations and net income of $31.7 million, increases of 82%, 102% and 467% respectively, year over year. This represents industry leading operating netback margins underpinning our disciplined capital allocation model that balances organic growth and stakeholder returns. Since commencing production from our Caburé project in 2020, we have repaid all outstanding debt and today’s announcement represents the third increase in our quarterly dividend since Q1 2022. With this, we will have already returned $22 million ($0.62/share) to shareholders in the form of dividends. We are also firmly focused on our next phase of growth and are looking forward to an exciting 2023 capital program.”

Quarterly Dividend Increased 17% to $0.14 per Share

Alvopetro is pleased to announce that our Board of Directors has approved a 17% increase in our quarterly dividend, to $0.14 per common share, payable in cash on April 14, 2023, to shareholders of record on March 31, 2023. This dividend is designated as an “eligible dividend” for Canadian income tax purposes. 

Dividend payments to non-residents of Canada will be subject to withholding taxes at the Canadian statutory rate of 25%.  Shareholders may be entitled to a reduced withholding tax rate under a tax treaty between their country of residence and Canada.  For further information, see Alvopetro’s website at https://alvopetro.com/Dividends-Non-resident-Shareholders.

Operational Update

Our average daily sales have continued at strong rates in 2023, averaging 2,754 boepd in January and a new daily record of 2,866 boepd in February. Effective February 1, 2023, our natural gas price increased to BRL2.00/m³ and is effective for all natural gas sales from February 1 to July 31, 2023. Including recently approved and enhanced sales tax credits, our realized gas price, net of sales taxes, for the month of February was approximately $12.23/Mcf (based on our average heat content to date and the average February 2023 BRL/USD foreign exchange rate of 5.17).  

On February 6, 2023, we announced our 2023 capital program, focused on lower risk development opportunities on our Murucututu natural gas project and our Bom Lugar oil field. We have commenced stimulation operations at our 197(1) well on Murucututu. The 197(1) well location has already been tied in to our 183(1) facility and we expect to commence production from the well in the second quarter. Following this stimulation, we plan to drill two follow-up wells at Murucututu, with one well having additional uphole exploration potential. We have budgeted total capital expenditures of $16 million for our Murucututu project in 2023.

On our Bom Lugar field, we plan to drill up to two development wells in 2023, targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations, the first of which is planned for the second quarter. Total capital expenditures of up to $11 million are budgeted at Bom Lugar.

Additional capital spending budgeted for 2023 includes $3 million on our Caburé field for the expansion of unit facilities and drilling two additional wells, $0.5 million at our Mãe-da-lua field for stimulation of the existing well and $0.4 million in capital expenditures at our 182-C2 and 183-B2 wells.

Automatic Share Repurchase Plan

In January 2023, we received approval from the TSX Venture Exchange (“TSXV”) for a normal course issuer bid (the “NCIB”) as more particularly described in our news release dated January 3, 2023. The terms of the NCIB permit Alvopetro to repurchase up to 2,876,414 common shares from January 6, 2023 to the earlier of January 5, 2024 or when the NCIB is completed or terminated by Alvopetro. No repurchases have been made under the NCIB to date.

Alvopetro intends to enter into an automatic share purchase plan (“ASPP”) with our designated broker, subject to the approval of the TSXV. The ASPP is intended to allow for the purchase of common shares under the NCIB at times when the Corporation may not ordinarily be permitted to purchase common shares due to regulatory restrictions and customary self-imposed blackout periods.

The ASPP is to be implemented upon TSXV approval and would allow the designated broker to purchase common shares pursuant to the proposed ASPP until the expiry of the NCIB on January 5, 2024. Such purchases will be determined by the broker at its sole discretion based on the purchasing parameters set out by the Corporation in accordance with the rules of the TSXV, applicable securities laws and the terms of the ASPP. The ASPP will terminate on the earlier of the date on which: (i) the NCIB expires; (ii) the maximum number of common shares have been purchased under the ASPP; and (iii) the Corporation terminates the ASPP in accordance with its terms.

Outside of the ASPP and outside of pre-determined blackout periods, common shares may continue to be purchased under the NCIB based on management’s discretion, in compliance with the rules of the TSXV and applicable securities laws. All purchases made under the ASPP will be included in the number of common shares available for purchase under the NCIB.

December 31, 2022 Reserves and Net Asset Value

On February 28, 2023, Alvopetro announced its December 31, 2022 reserves based upon the independent reserve assessment and evaluation prepared by GLJ Ltd. (“GLJ”) dated February 27, 2023 with an effective date of December 31, 2022 (the “GLJ Reserves and Resources Report”).  

Key highlights from the GLJ Reserves and Resources Report¹:

• 2P net present value before tax discounted at 10% (“NPV10”) increased 17% to $348.2 million.
• Proved reserves (“1P”) decreased 12% to 3.9 MMboe and 2P reserves increased 3% to 9.0 MMboe after 0.9 MMboe of production in 2022.
• 2P production replacement ratio of 132%.
• 2P F&D costs of $28.66/boe.
• 2P recycle ratio of 2.1 times.
• 2P Net Asset Value of CAD$13.70/share ($9.99/share) before any potential from contingent or prospective resources.
• Risked best estimate contingent resource of 2.9 MMboe (NPV10 $62.2 million) and risked best estimate prospective resource of 12.5 MMboe (NPV10 $259.1 million).

Financial and Operating Highlights – Fourth Quarter of 2022

• Our average daily sales increased to a new quarterly record of 2,724 boepd (+3% from Q3 2022 and +12% from Q4 2021).
• With natural gas sales in Q4 2022 continuing at the ceiling price in our contract, our average realized natural gas price was $11.18/Mcf (+58% from Q4 2021) and our average realized price per boe was $68.13 (+54% from Q4 2021). Higher realized prices and record daily sales volumes resulted in a 73% increase in our natural gas, condensate and oil revenue compared to Q4 2021.
• Our operating netback was $60.08 per boe in Q4 2022, an improvement of $23.70 per boe from Q4 2021 (+65%) and $0.25 per boe from Q3 2022.
• We generated funds flows from operations of $13.2 million ($0.36 per basic share and $0.35 per diluted share), an increase of $6.7 million compared to Q4 2021 and a decrease of $0.2 million compared to Q3 2022.
• We reported net income of $5.2 million in Q4 2022, an increase of $2.4 million (+87%) compared to Q4 2021. Net income was impacted by impairment expense of $6.3 million recognized on exploration assets.
• Capital expenditures totaled $5.9 million, including drilling and testing costs for our 182-C2 well, testing of the Unit-C well and facilities expenditures at the Caburé unit, testing costs for our 183-B1 well, development costs on our Murucututu project and long-lead purchases.
• Our Q4 2022 dividend increased 50% to $0.12 per share. The Q4 2022 dividend was paid on January 13, 2023 to shareholders of record on December 30, 2022.
• Our cash and working capital increased to $14.7 million, an improvement of $2.5 million compared to September 30, 2022 and an increase of $12.1 million compared to December 31, 2021 working capital net of debt of $2.6 million.

Financial and Operating Highlights – Year Ended December 31, 2022

• Our annual sales averaged 2,557 boepd (95% natural gas, 4% NGLs from condensate and marginal crude oil production), an increase of 8% compared to 2021.
• We reported net income of $31.7 million, compared to $5.6 million in 2021 (+467%).
• We generated funds flow from operations of $49.9 million ($1.44 per basic share on $1.35 per diluted share) compared to $24.6 million in 2021 ($0.74 per basic share and $0.71 per diluted share).
• Capital expenditures totaled $24.8 million in 2022.
• In the third quarter of 2022, all outstanding warrants were exercised. Alvopetro received cash proceeds of $2.4 million and issued a total of 2,081,616 common shares on the exercise.
• The credit facility was fully repaid in September 2022 and has been cancelled.
• Dividends totaled $0.36 per share in 2022 compared to $0.12 per share in 2021 (+200%).

The following table provides a summary of Alvopetro’s financial and operating results for periods noted. The consolidated financial statements with the Management’s Discussion and Analysis (“MD&A”) are available on our website at www.alvopetro.com and will be available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

2022 Results Webcast

Alvopetro will host a live webcast to discuss 2022 financial results at 9:00 am Mountain time on Wednesday March 22, 2023. Details for joining the event are as follows:

DATE: March 22, 2023TIME: 9:00 AM Mountain/11:00 AM EasternLINK: https://us06web.zoom.us/j/83279531812 DIAL-IN NUMBERS: https://us06web.zoom.us/u/kcfqlsznWWEBINAR ID: 832 7953 1812 

The webcast will include a question and answer period. Online participants will be able to ask questions through the Zoom portal. Dial-in participants can email questions directly to socialmedia@alvopetro.com.

Annual Information Form

Alvopetro has filed its annual information form (“AIF”) with the Canadian securities regulators on SEDAR. The AIF includes the disclosure and reports relating to oil and gas reserves data and other oil and gas information required pursuant to National Instrument 51-101 of the Canadian Securities Administrators. The AIF may be accessed electronically at www.sedar.com.

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:

http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links:

Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltd

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Oil and Natural Gas Advisories

Oil and Natural Gas Reserves

The disclosure in this news release summarizes certain information contained in the GLJ Reserves and Resources Report but represents only a portion of the disclosure required under National Instrument 51-101 (“NI 51-101”). For additional details, see our news release dated February 28, 2023. Full disclosure with respect to the Company’s reserves as at December 31, 2022 is contained in the Company’s annual information form for the year ended December 31, 2022 which has been filed on SEDAR (www.sedar.com). All net present values in this press release are based on estimates of future operating and capital costs and GLJ’s forecast prices as of December 31, 2022. The reserves definitions used in this evaluation are the standards defined by the Canadian Oil and Gas Evaluation Handbook (COGEH) reserve definitions, are consistent with NI 51-101 and are used by GLJ. The net present values of future net revenue attributable to the Alvopetro’s reserves estimated by GLJ do not represent the fair market value of those reserves. Other assumptions and qualifications relating to costs, prices for future production and other matters are summarized herein. The recovery and reserve estimates of the Company’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Contingent Resources

This news release discloses estimates of Alvopetro’s contingent resources and the net present value associated with net revenues associated with the production of such contingent resources as included in the GLJ Reserves and Resources Report. There is no certainty that it will be commercially viable to produce any portion of such contingent resources and the estimated future net revenues do not necessarily represent the fair market value of such contingent resources. Estimates of contingent resources involve additional risks over estimates of reserves. For additional details with respect to Alvopetro’s contingent resources evaluated as at December 31, 2022, see our news release dated February 28, 2023 and additional details contained in the Company’s annual information form for the year ended December 31, 2022 which has been filed on SEDAR (www.sedar.com).

Prospective Resources

This news release discloses estimates of Alvopetro’s prospective resources included in the GLJ Reserves and Resources Report. There is no certainty that any portion of the prospective resources will be discovered and even if discovered, there is no certainty that it will be commercially viable to produce any portion. Estimates of prospective resources involve additional risks over estimates of reserves. The accuracy of any resources estimate is a function of the quality and quantity of available data and of engineering interpretation and judgment. While resources presented herein are considered reasonable, the estimates should be accepted with the understanding that reservoir performance subsequent to the date of the estimate may justify revision, either upward or downward. For additional details with respect to Alvopetro’s prospective resources evaluated as at December 31, 2022, see our news release dated February 28, 2023 and additional details contained in the Company’s annual information form for the year ended December 31, 2022 which has been filed on SEDAR (www.sedar.com).

Other Metrics

This press release contains metrics commonly used in the oil and natural gas industry, which have been prepared by management, including “F&D costs”, “net asset value”, “net asset value per share”, “production replacement ratio” and “recycle ratio”. These terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons.

“F&D costs” are reflected on a per barrel of oil equivalent and are calculated as the sum of capital expenditures in the current year plus the change in FDC for the period, divided by the change in reserves in the period, before current year production.  The 2022 F&D costs are computed as follows:

“Net asset value” is based on the before tax net present value of the Company’s reserves as at December 31, 2022, discounted at 10% plus the Company’s net working capital balance as of December 31, 2022. Net working capital is a capital management measure. See “Non-GAAP and Other Financial Measures” below for further details.

“Net asset value per share” is based on the computation of net asset value divided by basic shares outstanding of 36,311,579 adjusted to Canadian dollars based on the foreign exchange rate on March 21, 2023.

“Production replacement ratio” is calculated as total reserve additions divided by current year production. Alvopetro’s 2P production replacement ratio in 2022 is calculated as:

“Recycle ratio” is calculated by dividing the 2022 operating netback by F&D costs per boe for the year. The Company’s 2022 recycle ratio is calculated as follows:

Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare our operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.

Non-GAAP and Other Financial Measures

This news release contains references to various non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures as such terms are defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Such measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. While these measures may be common in the oil and gas industry, the Company’s use of these terms may not be comparable to similarly defined measures presented by other companies. The non-GAAP and other financial measures referred to in this report should not be considered an alternative to, or more meaningful than measures prescribed by IFRS and they are not meant to enhance the Company’s reported financial performance or position. These are complementary measures that are used by management in assessing the Company’s financial performance, efficiency and liquidity and they may be used by investors or other users of this document for the same purpose. Below is a description of the non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures used in this news release. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the “Non-GAAP Measures and Other Financial Measures” section of the Company’s MD&A which may be accessed through the SEDAR website at www.sedar.com.

Non-GAAP Financial Measures

Operating netback

Operating netback is calculated as natural gas, oil and condensate revenues less royalties and production expenses. This calculation is provided in the “Operating Netback” section of the Company’s MD&A using our IFRS measures. The Company’s MD&A may be accessed through the SEDAR website at www.sedar.com. Operating netback is a common metric used in the oil and gas industry used to demonstrate profitability from operations.

Non-GAAP Financial Ratios

Operating netback per boe

Operating netback is calculated on a per unit basis, which is per barrel of oil equivalent (“boe”). It is a common non-GAAP measure used in the oil and gas industry and management believes this measurement assists in evaluating the operating performance of the Company. It is a measure of the economic quality of the Company’s producing assets and is useful for evaluating variable costs as it provides a reliable measure regardless of fluctuations in production. Alvopetro calculated operating netback per boe as operating netback divided by total sales volumes (barrels of oil equivalent). This calculation is provided in the “Operating Netback” section of the Company’s MD&A using our IFRS measures. The Company’s MD&A may be accessed through the SEDAR website at www.sedar.com. Operating netback is a common metric used in the oil and gas industry used to demonstrate profitability from operations on a per unit basis (boe).

Operating netback margin

Operating netback margin is calculated as operating netback per boe divided by the realized sales price per boe. Operating netback margin is a measure of the profitability per boe relative to natural gas, oil and condensate sales revenues per boe and is calculated as follows:

Funds Flow from Operations Per Share

Funds flow from operations per share is a non-GAAP ratio that includes all cash generated from operating activities and is calculated before changes in non-cash working capital, divided by the weighted the weighted average shares outstanding for the respective period. For the periods reported in this news release the cash flows from operating activities per share and funds flow from operations per share is as follows:

Capital Management Measures

Funds Flow from Operations 

Funds flow from operations is a non-GAAP capital management measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital. The most comparable GAAP measure to funds flow from operations is cash flows from operating activities. Management considers funds flow from operations important as it helps evaluate financial performance and demonstrates the Company’s ability to generate sufficient cash to fund future growth opportunities. Funds flow from operations should not be considered an alternative to, or more meaningful than, cash flows from operating activities however management finds that the impact of working capital items on the cash flows reduces the comparability of the metric from period to period. A reconciliation of funds flow from operations to cash flows from operating activities is as follows:

Net Working Capital

Net working capital is computed as current assets less current liabilities. Net working capital is a measure of liquidity, is used to evaluate financial resources, and is calculated as follows: 

Working Capital Net of Debt

Working capital net of debt is computed as net working capital surplus decreased by the carrying amount of the Credit Facility. Working capital net of debt is used by management to assess the Company’s overall financial position.

Supplementary Financial Measures

“Average realized natural gas price – $/Mcf” is comprised of natural gas sales as determined in accordance with IFRS, divided by the Company’s natural gas sales volumes.

“Average realized NGL – condensate price – $/bbl” is comprised of condensate sales as determined in accordance with IFRS, divided by the Company’s NGL sales volumes from condensate.

“Average realized oil price – $/bbl” is comprised of oil sales as determined in accordance with IFRS, divided by the Company’s oil sales volumes.

“Average realized price – $/boe” is comprised of natural gas, condensate and oil sales as determined in accordance with IFRS, divided by the Company’s total natural gas, condensate and oil sales volumes (barrels of oil equivalent).

“Royalties per boe” is comprised of royalties, as determined in accordance with IFRS, divided by the total natural gas, condensate and oil sales volumes (barrels of oil equivalent).

“Production expenses per boe” is comprised of production expenses, as determined in accordance with IFRS, divided by the total natural gas, condensate and oil sales volumes (barrels of oil equivalent).

BOE Disclosure

The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6 Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Forward-Looking Statements and Cautionary Language

This news release contains forward-looking information within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking statements concerning plans relating to the Company’s operational activities, proposed exploration development activities and the timing for such activities, exploration and development prospects of Alvopetro, capital spending levels, future capital and operating costs, timing and taxation of dividends and plans for dividends in the future, plans for share repurchases under the NCIB and the duration of the NCIB, future production and sales volumes, the expected natural gas price, gas sales and gas deliveries under Alvopetro’s long-term gas sales agreement, the expected timing of production commencement from the 197(1) well, the proposed automatic share purchase plan, and projected financial results. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, expectations and assumptions concerning the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities and the timing of such activities, the performance of producing wells and reservoirs, well development and operating performance, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, foreign exchange rates, general economic and business conditions, forecasted demand for oil and natural gas, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect.  Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. In addition, the declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, reliance on industry partners, availability of equipment and personnel, uncertainty surrounding timing for drilling and completion activities resulting from weather and other factors, changes in applicable regulatory regimes and health, safety and environmental risks), commodity price and foreign exchange rate fluctuations, market uncertainty associated with financial institution instability, and general economic conditions. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.

News Research and Market Data on ALVOF

Feb 28, 2023

CALGARY, AB, Feb. 28, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces our reserves as at December 31, 2022 with total proved plus probable (“2P”) reserves of 9.0 MMboe and a before tax net present value discounted at 10% of $348.2 million. 2P reserve additions replaced 132% of 2022 production. 2P reserve volumes increased by 3%, despite 0.9 MMboe of production in 2022, due to reserve additions associated mainly with two additional Murucututu development locations (previously included in contingent resources). The before tax net present value of our 2P reserves (discounted at 10%) increased by 17% from December 31, 2021, due to reserve additions and increases in forecasted natural gas prices. Alvopetro also announces the December 31, 2022 assessment of the Company’s Murucututu natural gas resource with risked best estimate contingent resource of 2.9 MMboe and risked best estimate prospective resource of 12.5 MMboe. The Murucututu natural gas contingent and prospective resource values (risked best estimate net present value before tax, discounted at 10%) are $62.2 million and $259.1 million, respectively. The reserves and resources data set forth herein is based on an independent reserves and resources assessment and evaluation prepared by GLJ Ltd. (“GLJ”) dated February 27, 2023 with an effective date of December 31, 2022 (the “GLJ Reserves and Resources Report”).

All references herein to $ refer to United States dollars, unless otherwise stated.

December 31, 2022 GLJ Reserves and Resource Report Highlights

• 2P net present value before tax discounted at 10% increased 17% to $348.2 million.
• Proved reserves (“1P”) decreased 12% to 3.9 MMboe and 2P reserves increased 3% to 9.0 MMboe after 0.9 MMboe of production in 2022.
• 2P production replacement ratio⁽¹⁾ of 132%.
• 2P F&D costs⁽¹⁾ estimated at $28.66/boe.
• 2P recycle ratio⁽¹⁾ estimated at 2.1 times.
• 2P Net Asset Value⁽¹⁾ of CAD$13.56/share ($9.99/share) before any potential from contingent or prospective resources.
• Risked best estimate contingent resource of 2.9 MMboe (NPV10 $62.2 million) and risked best estimate prospective resource of 12.5 MMboe (NPV10 $259.1 million).

Corey Ruttan, President and Chief Executive Officer, commented:

“Our 2022 year-end reserves and resource evaluations highlight the continued strong profitability from our Caburé natural gas field and the long-term potential of our Murucututu project. The increase in forecasted cash flows reflects the impact of reserve additions associated with our near-term development plans on our Murucututu asset and increases in forecasted natural gas prices under our long-term gas sales agreement. Our 2023 capital program is focused on lower risk development opportunities including accelerated activity on our Murucututu asset targeting the long-term natural gas potential of this field.”

Net Present Value Before Tax Discounted at 10%:^{(1)(2)(3)(4)(5)(6)(7)(8)}

NET ASSET VALUE

Following the December 31, 2022 reserves evaluation, based on the before tax net present value of Alvopetro’s 2P reserves (discounted at 10%), our total 2P net asset value is $362.9 million; CAD$13.56 per common share outstanding. Our 2P net asset value of $362.9 million is before including the before tax net present value (discounted at 10%) of our risked best estimate risked contingent resource of $62.2 million and our risked prospective resource of $259.1 million from the Murucututu natural gas field.

PRICING ASSUMPTIONS – FORECAST PRICES AND COSTS 

GLJ employed the following pricing and inflation rate assumptions as of January 1, 2023 in the GLJ Reserves and Resources Report in estimating reserves and resources data using forecast prices and costs.

As of February 1, 2023, Alvopetro’s contracted natural gas price under the terms of our long-term gas sales agreement is based on the ceiling price within the contract and is forecasted to remain at the ceiling price until 2027. The ceiling price incorporates assumed US inflation of 3% in 2023 and 2% thereafter.

GLJ RESERVES AND RESOURCES REPORT 

The GLJ Reserves and Resources Report has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (“COGEH”) that are consistent with the standards of National Instrument 51-101 (“NI 51-101”). GLJ is a qualified reserves evaluator as defined in NI 51-101. The GLJ Reserves and Resources Report was an evaluation of all reserves of Alvopetro including our Caburé and Caburé Leste natural gas fields (collectively referred to as our Caburé natural gas field), our Murucututu natural gas project (previously referred to as Gomo), as well as our Bom Lugar and Mãe-da-lua oil fields. The GLJ Reserves and Resources Report also includes an evaluation of the gas resources of our Murucututu natural gas. In addition to the reserves assigned to our two existing Murucututu wells (197-1 and 183-1) and four additional development locations, contingent resource was assigned to the area in proximity to our existing Murucututu reserves, deemed to be discovered. The area mapped by 3D seismic west and north of the area defined as contingent was assigned prospective resource. Additional reserves and resources information as required under NI 51-101 will be included in the Company’s Annual Information Form for the 2022 fiscal year which will be filed on SEDAR by April 30, 2023.

December 31, 2022 Reserves Information:

Summary of Reserves ^(1)(2)(3)

Summary of Before Tax Net Present Value of Future Net Revenue – $000s ^{(1)(2)(3)(7)(8)}

Summary of After Tax Net Present Value of Future Net Revenue – $000s ^{(1)(2)(3)(7)(8)}

Future Development Costs ^{(1)(2)(3)(7)(8)}

The table below sets out the total development costs deducted in the estimation of future net revenue attributable to proved reserves, proved plus probable reserves and proved plus probable plus possible reserves (using forecast prices and costs), by field, in the GLJ Reserves and Resources Report. Total development costs include capital costs for drilling and facility and pipeline expenditures but excludes abandonment and reclamation costs.

Under each reserve category, Alvopetro has elected to reflect 100% of the contractual obligations pursuant to our Gas Treatment Agreement with Enerflex, including all operating, capital, and related financing costs for the full duration of the agreement. These costs are mainly attributable to the Caburé field and also represent the majority of the future development costs for the Caburé field in the table below. The future costs associated with equipment rental are also reflected as a capital lease obligation on our financial statements. Also included in future development costs for the Caburé field are two step-out wells and expansion of the unit facilities.

The future development costs for the Murucututu field in the proved category are for two development locations in the field and the stimulation of the 197(1) well. In the probable and possible categories, there are future development costs for two additional development locations. Also included in the Murucututu future development costs for all reserve categories are a portion of the anticipated contractual obligations associated with the expansion of the gas treatment facility. The future development costs for Bom Lugar in the proved category include costs for one development well and facilities upgrade. A second development well is included in the future development costs for the possible category for Bom Lugar. Future development costs at the Mãe-da-lua field relate to a stimulation of the existing producing well.

Reconciliation of Alvopetro’s Gross Reserves (Before Royalty) ^(1)(2)(3)(8)

December 31, 2022 Murucututu Contingent Resources Information:

Summary of Unrisked Company Gross Contingent Resources ^(1)(2)(5)(6)

Summary of Before Tax Net Present Value of Future Net Revenue of Unrisked Contingent Resources- $000s ^{(1)(2)(5)(6)(7)(8)}

The GLJ Contingent Resource Report for Murucututu assumes capital deployment starting in 2024 for the drilling of wells with total project costs of $19.1 million and first commercial production in 2024. The information presented herein is based on company net project development costs. The recovery technology assumed for purposes of the estimate is based on established technologies utilized repeatedly in the industry.

There can be no certainty that the project will be developed on the timelines discussed herein. The project is based on a pre-development study. Development of the project is dependent on several contingencies as further described in this news release. Significant positive factors relevant to the estimate include existing production in close proximity, proximity to infrastructure, existing long-term gas sales agreement and corporate commitment to the project. Significant negative factors relevant to the estimate include reservoir performance and the economic viability of the project (with sensitivity to low commodity prices), access to and amount of capital required to develop resources at an acceptable cost,  and regulatory approvals for planned activities including stimulations and new infrastructure developments.

Summary of Development Pending Risked Company Gross Contingent Resources^(1)(2)(5)(6)

The GLJ Reserves and Resources Report estimates the Chance of Development as the product of two main contingencies associated with the project development, which are: 1) the probability of corporate sanctioning, which GLJ estimates at 95%; 2) the probability of finalization of a development plan, which GLJ estimates at 95%. The product of these two contingencies is 90%. As there is no risk related to discovery, the Chance of Commerciality for the contingent resource is therefore 90% which is the risk factor that has been applied to the Development Risked company gross contingent resources and the net present value figures reported below.

Summary of Development Pending Risked Before Tax Net Present Value of Future Net Revenue of Contingent Resources- $000s^{(1)(5)(6)(7)(8)}

December 31, 2022 Murucututu Prospective Resources Information:

Summary of Unrisked Company Gross Prospective Resources ^(1)(2)(4)(6)

Summary of Before Tax Net Present Value of Future Net Revenue of Unrisked Prospective Resources – $000s ^{(1)(4)(6)(7)(8)}

The GLJ Reserves and Resources Report for Murucututu prospective resources assumes capital deployment starting in 2025 for the drilling of wells, expansion of field facilities, and additional pipeline capacity, with total project costs of $70.0 million and first commercial production in 2025. The information presented herein is based on company project development costs. The recovery technology assumed for purposes of the estimate is based on established technologies utilized repeatedly in the industry.

There can be no certainty that the project will be developed on the timelines discussed herein. Development of the project is dependent on several contingencies as further described in this news release. The project is based on a conceptual study. Significant positive factors relevant to the estimate include existing production in close proximity, proximity to infrastructure, existing long-term gas sales agreement and corporate commitment to the project. Significant negative factors relevant to the estimate include reservoir performance and the economic viability of the project (with sensitivity to low commodity prices), access to and amount of capital required to develop resources at an acceptable cost, and regulatory approvals for planned activities including stimulations and new infrastructure developments.

Summary of Development Risked Company Gross Prospective Resources^(1)(2)(4)(6)

The GLJ Reserves and Resources Report estimates the Chance of Commerciality as the product between the Chance of Discovery and the Chance of Development. The Chance of Discovery of the prospective resources has been assessed at 90%, while the Chance of Development has been assessed as the same as for the Contingent Resources described above at 90%. The resulting Chance of Commerciality is 81%, which has been applied to the company gross unrisked prospective resources and the net present value figures reported below.

Summary of Development Risked Before Tax Net Present Value of Future Net Revenue of Prospective Resources- $000s^{(1)(4)(6)(7)(8)}

UPCOMING 2022 RESULTS AND LIVE WEBCAST

Alvopetro anticipates announcing its 2022 fourth quarter and year-end results on March 21, 2023 after markets close and will host a live webcast to discuss the results at 9:00 am Mountain time, on March 22, 2023. Details for joining the event are as follows:

DATE: March 22, 2023TIME: 9:00 AM Mountain/11:00 AM EasternLINK: https://us06web.zoom.us/j/83279531812 DIAL-IN NUMBERS: https://us06web.zoom.us/u/kcfqlsznW WEBINAR ID: 832 7953 1812 

The webcast will include a question and answer period. Online participants will be able to ask questions through the Zoom portal. Dial-in participants can email questions directly to socialmedia@alvopetro.com.

CORPORATE PRESENTATION

Alvopetro’s updated corporate presentation is available on our website at:

http://www.alvopetro.com/corporate-presentation. 

FOOTNOTES

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this news release are in United States dollars, except as otherwise noted.

Abbreviations:

1P                     =          proved reserves2P                     =          proved plus probable reserves3P                     =          proved plus probable plus possible reservesCAD                  =          Canadian dollarsF&D                  =          finding and development costsFDC                  =          future development costs;Mbbl                 =           thousands of barrelsMboe                =          thousand barrels of oil equivalentMMbtu              =           million British Thermal UnitsMMcf                =          million cubic feetMMcf/d             =          million cubic feet per dayMMboe             =          million barrels of oil equivalent$000s               =          thousands of U.S. dollars

Oil and Natural Gas Advisories

Oil and Natural Gas Reserves

The disclosure in this news release summarizes certain information contained in the GLJ Reserves and Resources Report but represents only a portion of the disclosure required under NI 51-101. Full disclosure with respect to the Company’s reserves as at December 31, 2022 will be included in the Company’s annual information form for the year ended December 31, 2022 which will be filed on SEDAR (www.sedar.com) on or before April 30, 2023. All net present values in this press release are based on estimates of future operating and capital costs and GLJ’s forecast prices as of December 31, 2022. The reserves definitions used in this evaluation are the standards defined by COGEH reserve definitions and are consistent with NI 51-101 and used by GLJ. The net present values of future net revenue attributable to the Alvopetro’s reserves estimated by GLJ do not represent the fair market value of those reserves. Other assumptions and qualifications relating to costs, prices for future production and other matters are summarized herein. The recovery and reserve estimates of the Company’s reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Contingent Resources

This news release discloses estimates of Alvopetro’s contingent resources and the net present value associated with net revenues associated with the production of such contingent resources as included in the GLJ Reserves and Resources Report. There is no certainty that it will be commercially viable to produce any portion of such contingent resources and the estimated future net revenues do not necessarily represent the fair market value of such contingent resources. Estimates of contingent resources involve additional risks over estimates of reserves. Full disclosure with respect to the Company’s contingent resources as at December 31, 2022 will be contained in the Company’s annual information form for the year ended December 31, 2022 which will be filed on SEDAR (www.sedar.com) on or before April 30, 2023.

Prospective Resources

This news release discloses estimates of Alvopetro’s prospective resources included in the GLJ Reserves and Resources Report. There is no certainty that any portion of the prospective resources will be discovered and even if discovered, there is no certainty that it will be commercially viable to produce any portion. Estimates of prospective resources involve additional risks over estimates of reserves. The accuracy of any resources estimate is a function of the quality and quantity of available data and of engineering interpretation and judgment. While resources presented herein are considered reasonable, the estimates should be accepted with the understanding that reservoir performance subsequent to the date of the estimate may justify revision, either upward or downward. Full disclosure with respect to the Company’s prospective resources as at December 31, 2022 will be contained in the Company’s annual information form for the year ended December 31, 2022 which will be filed on SEDAR (www.sedar.com) on or before April 30, 2023.

Boe Disclosure

The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Other Metrics

This press release contains metrics commonly used in the oil and natural gas industry, which have been prepared by management, including “F&D costs”, “net asset value”, “net asset value per share”, “operating netback per boe”, “production replacement ratio” and “recycle ratio”. These terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons.

“F&D costs” are reflected on a per barrel of oil equivalent and are calculated as the sum of capital expenditures in the current year plus the change in FDC for the period, divided by the change in reserves in the period, before current year production. The estimated 2022 F&D costs are computed as follows:

“Net asset value” is based on the before tax net present value of the Company’s reserves as at December 31, 2022, discounted at 10% plus the Company’s net working capital balance estimated as of December 31, 2022. Net working capital is a capital management measure. See “Non-GAAP and Other Financial Measures” below for further details. The estimated net working capital as of December 31, 2022 is unaudited and subject to change upon completion of audited financial statements for the year-ended December 31, 2022. Such changes could be material. See “Unaudited Financial Information” for further details.

“Net asset value per share” is based on the computation of net asset value divided by basic shares outstanding of 36,311,579 adjusted to Canadian dollars based on the foreign exchange rate on February 27, 2023.

“Operating netback per boe” is a non-GAAP financial measure and operating netback per boe is a non-GAAP financial ratio. See “Non-GAAP and Other Financial Measures” below for further details. Alvopetro’s operating netback for the year ended December 31, 2022 is estimated at $59.43 per boe. This estimate is based on unaudited financial information and subject to change upon completion of audited financial statements for the year-ended December 31, 2022. Such changes could be material. See “Unaudited Financial Information” for further details.

“Production replacement ratio” is calculated as total reserve additions divided by current year production. Alvopetro’s 2P production replacement ratio in 2022 is calculated as:

“Recycle ratio” is calculated by dividing the estimated 2022 operating netback by estimated F&D costs per boe for the year. The Company’s estimated 2022 recycle ratio is calculated as follows:

Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare our operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.

Forward-Looking Statements and Cautionary Language

This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning plans relating to the Company’s operational activities, proposed development activities and the timing for such activities, capital spending levels and future capital costs, the expected natural gas price, gas sales and gas deliveries under Alvopetro’s long-term gas sales agreement. The forward-looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, the performance of producing wells and reservoirs, well development and operating performance, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, foreign exchange rates, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Unaudited Financial Information

Certain financial and operating information included in this news release for the year ended December 31, 2022 including, without limitation, 2022 capital expenditures and the impact on F&D costs, working capital, recycle ratio and operating netback, are based on estimated unaudited financial results for the year then ended, and are subject to the same limitations as discussed under Forward Looking Statements and Cautionary Language set out in this news release. These estimated amounts may change upon the completion of audited financial statements for the year ended December 31, 2022 and changes could be material.

Non-GAAP and Other Financial Measures

This news release contains references to various non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures as such terms are defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Such measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. While these measures may be common in the oil and gas industry, the Company’s use of these terms may not be comparable to similarly defined measures presented by other companies. The non-GAAP and other financial measures referred to in this news release should not be considered an alternative to, or more meaningful than measures prescribed by IFRS and they are not meant to enhance the Company’s reported financial performance or position. These are complementary measures that are used by management in assessing the Company’s financial performance, efficiency and liquidity and they may be used by investors or other users of this document for the same purpose. Below is a description of the non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures used in this news release. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the “Non-GAAP Measures and Other Financial Measures” section of the Company’s most recent MD&A which may be accessed through the SEDAR website at www.sedar.com .

Non-GAAP Financial Ratios

Operating netback per boe

Operating netback is calculated on a per unit basis, which is per barrel of oil equivalent (“boe”). It is a common non-GAAP measure used in the oil and gas industry and management believes this measurement assists in evaluating the operating performance of the Company. It is a measure of the economic quality of the Company’s producing assets and is useful for evaluating variable costs as it provides a reliable measure regardless of fluctuations in production. Alvopetro calculated operating netback per boe as operating netback (a non-GAAP financial measure calculated as natural gas, oil and condensate revenues less royalties and production expenses) divided by total sales volumes (barrels of oil equivalent). More details on the method of calculation is provided in the “Operating Netback per boe” section of the Company’s MD&A. The Company’s MD&A may be accessed through the SEDAR website at www.sedar.com. Operating netback is a common metric used in the oil and gas industry used to demonstrate profitability from operations on a per unit basis (boe). The Company’s operating netback per boe is estimated at $59.43 per boe for the year ended December 31, 2022. This amount is unaudited and subject to change as further discussed in the section “Unaudited Financial Information”.

Capital Management Measures

Net Working Capital

Net working capital is computed as current assets less current liabilities. Net working capital is a measure of liquidity, is used to evaluate financial resources. The Company’s net working capital as of December 31, 2022 is estimated at $14.7 million. This amount is unaudited and subject to change as further discussed in the section “Unaudited Financial Information”.

SOURCE Alvopetro Energy Ltd.

Research News and Market Data on ALVOF

Feb 06, 2023

CALGARY, AB, Feb. 6, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces January 2023 sales volumes, our February 1, 2023 natural gas price redetermination, our 2023 capital plan and an operational update.

President and CEO, Corey Ruttan commented:

“Building on our record year in 2022 we are looking forward to our 2023 capital plan.  Our focus this year is on adding production and reserves from our lower risk development opportunities. We have made the key infrastructure investments necessary to realize the full potential from our Murucututu natural gas project. This project has significant reserves and resources and our goal is to unlock this potential with a multi-year development plan starting this year.”

January 2023 sales volumes

January sales volumes averaged 2,754 boepd, including natural gas sales of 15.6 MMcfpd, associated natural gas liquids sales (condensate) of 141 bopd, and 5 bopd of oil sales, based on field estimates, a 1% increase from our Q4 average daily volumes.   

Operational Update and 2023 Capital Plans

Murucututu (100% Alvopetro)

On our Murucututu project, we expect to commence the stimulation on our 197(1) well later this quarter. We have already completed the work to tie-in this well to our 183(1) facility and expect to commence production in the second quarter. We also plan to drill two “fit-for-purpose” Gomo development wells in 2023. One of these locations has additional uphole exploration potential in the Caruaçu and Marfim Formations.  Total capital expenditures of $16 million are budgeted for Murucututu in 2023.

Caburé (49.1% Alvopetro)

Our 2023 capital budget includes an expansion of the unit facilities and drilling two additional development wells. Total expenditures of $3 million are budgeted for Alvopetro’s share of 2023 capital expenditures on our Caburé project.

Bom Lugar (100% Alvopetro)

In 2023, we plan to drill up to two development wells on our Bom Lugar oil field, targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations. Capital expenditures of up to $11 million are budgeted in 2023 for Bom Lugar, including the development wells and facility upgrades.

Mãe-da-lua (100% Alvopetro)

2023 capital expenditures include $0.5 million at our Mãe-da-lua field where we plan to complete a stimulation of our existing well to improve oil recovery rates.

Exploration (100% Alvopetro)

In 2022, Alvopetro drilled two exploration prospects, 182-C, and 183-B. We encountered thick, hydrocarbon saturated zones in the Sergi Formation which have demonstrated low permeability during testing operations. Alvopetro continues to evaluate alternatives to enhance permeability in the Sergi Formation in both wells and in the Agua Grande Formation of the 183-B1 well. We are evaluating alternatives to remediate possible permeability impacts from near wellbore damage.  This work is expected to start with the 182-C2 well later this quarter. Capital costs of $0.4 million are currently budgeted on these projects in 2023, including final testing costs on 182-C2 incurred in January. Future capital expenditures will depend on these initial results.

Semi-Annual Natural Gas Price Redetermination

Effective February 1, 2023, our natural gas price under our long-term gas sales agreement with Bahiagás has been adjusted to BRL2.00/m³ or $11.88/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10). This price represents an increase of 3.6% from our prior contracted price and will be effective for natural gas sales from February 1 to July 31, 2023. Including recently approved and enhanced sales tax credits, our realized gas price, net of sales taxes, is expected to be $12.40/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10).   

Corporate Presentation

Alvopetro’s updated corporate presentation is available on our website at:http://www.alvopetro.com/corporate-presentation. 

Social Media

Follow Alvopetro on our social media channels at the following links: Twitter – https://twitter.com/AlvopetroEnergyInstagram – https://www.instagram.com/alvopetro/LinkedIn – https://www.linkedin.com/company/alvopetro-energy-ltdYouTube –https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning plans relating to the Company’s operational activities, proposed exploration and development activities and the timing for such activities, capital spending levels and future capital costs, and the expected natural gas price, gas sales and gas deliveries under the Company’s long-term gas sales agreement. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, the performance of producing wells and reservoirs, well development and operating performance, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, foreign exchange rates, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE Alvopetro Energy Ltd.