CALGARY, AB, Aug. 6, 2025 /CNW/ – Alvopetro Energy Ltd. (TSXV:ALV) (OTCQX:ALVOF) announces an operational update and financial results for the three and six months ended June 30, 2025.
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:
“Q2 included our first quarter of sales from our recently added Western Canadian assets and overall sales volumes continued to be very strong averaging 2,436 boepd, up 50% from Q2 2024, and consistent with Q1 2025. We have a considerable amount of activity underway and we are looking forward to an exciting Q3 with the completion and tie-in of our 183-D4 well, our Caburé Unit development wells, and our two most recently drilled multi-lateral wells in Western Saskatchewan. Our 2025 capital program is organically funded and focused on high rate of return opportunities in Brazil and also now in the Western Canadian Sedimentary Basin.”
Operational Update
July Sales Volumes
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Natural gas, NGLs and crude oil sales: |
July 2025 |
June 2025 |
Q2 2025 |
|
Brazil: |
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Natural gas (Mcfpd), by field: |
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|
Caburé |
11,122 |
11,804 |
11,811 |
|
Murucututu |
1,751 |
1,446 |
1,191 |
|
Total natural gas (Mcfpd) |
12,873 |
13,250 |
13,002 |
|
NGLs (bopd) |
130 |
147 |
128 |
|
Oil (bopd) |
9 |
9 |
3 |
|
Total (boepd) – Brazil |
2,284 |
2,365 |
2,298 |
|
Canada: |
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|
Oil (bopd) – Canada |
134 |
149 |
138 |
|
Total Company – boepd(1) |
2,418 |
2,514 |
2,436 |
|
(1) Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. |
July sales volumes averaged 2,418 boepd, including 2,284 boepd from Brazil (with natural gas sales of 12.9 MMcfpd, associated natural gas liquids sales from condensate of 130 bopd, and oil sales of 9 bopd) and 134 bopd from oil sales in Canada, based on field estimates.
Quarterly Natural Gas Pricing Update
Effective August 1, 2025, our natural gas price under our long-term gas sales agreement was adjusted to BRL1.90/m3 and will apply to all natural gas sales from August 1, 2025 to October 31, 2025. Based on our average heat content to date and the July 31, 2025 BRL/USD exchange rate of 5.60, our expected realized price at the new contracted price is $10.27/Mcf, net of applicable sales taxes, a decrease of 3% from the Q2 2025 realized price of $10.62/Mcf due mainly to reduced Henry Hub and Brent prices in the second quarter. Amounts ultimately received in equivalent USD will be impacted by exchange rates in effect during the period August 1, 2025 to October 31, 2025.
Development Activities – Brazil
On our 100% owned Murucututu field, the 183-D4 well was drilled in the second quarter to a total measured depth of 3,072 metres. The well encountered the Caruaçu Member of the Maracangalha Formation 106 metres structurally updip of our 183-A3 well which has been on production since the fourth quarter of 2024. Based on cased-hole gamma ray logs and normalized gas while drilling, the well encountered potential natural gas pay in the Caruaçu Member of the Maracangalha Formation, with an aggregate 61 metres total vertical depth (“TVD”) of potential natural gas pay between 2,439 and 2,838 meters TVD. We’ve now completed the well in seven intervals and expect to have the well on production later in the third quarter. A total of $3.3 million of capital expenditures are estimated on the field in the second half of 2025, including costs for the 183-D4 completion.
Our joint development on the unitized area (“the Unit”) which includes our Caburé field commenced in the second quarter and three wells (1.7 net) have now been drilled. The fourth well (0.6 net) is expected to be drilled later in the third quarter. Alvopetro’s share of these planned unit development costs in the second half of 2025 is anticipated to be $5.5 million. The timing of drilling the fifth development well (0.6 net) is subject to the receipt of all necessary regulatory approvals.
Development Activities – Western Canada
In June, we further expanded our joint Mannville focused land based to 17,780 gross acres (8,890 net acres) and in July, two additional multi-lateral wells (1.0 net) were drilled with an aggregate of over 19 kilometers of open hole reservoir contact. Both wells will now be completed and equipped and are expected to be on production later in the third quarter. We expect to drill our next two multi-lateral wells (1.0 net) starting later this year.
Financial and Operating Highlights – Second Quarter of 2025
- Average daily sales in Q2 2025 were 2,436 boepd (+50% from Q2 2024 and consistent with Q1 2025 sales of 2,446 boepd). In Brazil, daily sales averaged 2,298 boepd (+41% compared to Q2 2024) and in Canada, oil sales commenced in April 2025, contributing 138 bopd in the quarter.
- Our average realized natural gas price was $10.62/Mcf in Q2 2025 (-10% from Q2 2024 and +2% from Q1 2025). Our overall averaged realized sales price per boe was $63.20/boe (-12% from Q2 2024 and -1% from Q1 2025).
- With higher sales volumes, our natural gas, oil and condensate revenue increased to $14.0 million (+31% from Q2 2024).
- Our operating netback in the quarter was $54.72 per boe, a decrease of $9.58 per boe compared to Q2 2024 due mainly to lower realized sales prices as well as higher royalties. Compared to Q1 2025, our operating netback increased $3.95 per boe with lower royalties partially offset by lower realized prices.
- We generated funds flows from operations of $10.4 million ($0.28 per basic and $0.27 per diluted share), increases of $2.5 million compared to Q2 2024 and $1.1 million compared to Q1 2025.
- We reported net income of $6.8 million ($0.18 per basic and diluted share), an increase of $4.5 million compared to Q2 2024 due to higher sales volumes as well as foreign exchange gains (compared to foreign exchange losses in Q2 2024), partially offset by lower realized prices and higher royalties, production expenses, depletion and depreciation expense and tax expense.
- Capital expenditures totaled $9.0 million, including drilling costs for the 183-D4 well on Alvopetro’s 100% Murucututu field as well as Alvopetro’s share of costs incurred on unit development, including costs for two (1.1 net) of five development wells (2.8 net) which commenced drilling in the quarter.
- Our working capital surplus was $6.8 million as of June 30, 2025, decreasing $2.9 million from March 31, 2025.
The following table provides a summary of Alvopetro’s financial and operating results for the 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 SEDAR+ website at www.sedarplus.ca.
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As at and Three Months Ended June 30, |
As at and Six Months Ended June 30, |
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2025 |
2024 |
Change |
2025 |
2024 |
Change (%) |
|
|
Financial |
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($000s, except where noted) |
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|
Natural gas, oil and condensate sales |
14,010 |
10,672 |
31 |
28,023 |
22,424 |
25 |
|
Net income |
6,830 |
2,350 |
191 |
12,900 |
6,900 |
87 |
|
Per share – basic ($)(1) |
0.18 |
0.06 |
200 |
0.35 |
0.19 |
84 |
|
Per share – diluted ($)(1) |
0.18 |
0.06 |
200 |
0.34 |
0.18 |
89 |
|
Cash flows from operating activities |
10,473 |
8,860 |
18 |
19,290 |
17,073 |
13 |
|
Per share – basic ($)(1) |
0.28 |
0.24 |
17 |
0.52 |
0.46 |
13 |
|
Per share – diluted ($)(1) |
0.28 |
0.24 |
17 |
0.51 |
0.45 |
13 |
|
Funds flow from operations(2) |
10,366 |
7,910 |
31 |
19,588 |
16,423 |
19 |
|
Per share – basic ($)(1) |
0.28 |
0.21 |
33 |
0.53 |
0.44 |
20 |
|
Per share – diluted ($)(1) |
0.27 |
0.21 |
29 |
0.52 |
0.44 |
18 |
|
Dividends declared |
3,660 |
3,296 |
11 |
7,303 |
6,592 |
11 |
|
Per share(1) (2) |
0.10 |
0.09 |
11 |
0.20 |
0.18 |
11 |
|
Capital expenditures |
8,986 |
3,437 |
161 |
17,361 |
5,876 |
195 |
|
Cash and cash equivalents |
15,001 |
19,681 |
(24) |
15,001 |
19,681 |
|