Alvopetro Announces Year End 2024 Financial Results, Q1 2025 Dividend of US$0.10/share and Filing of our AIF
CALGARY, AB, March 18, 2025 /CNW/ - Alvopetro Energy Ltd. (TSXV:ALV) (OTCQX:ALVOF) announces an operational update, our financial results for the year ended December 31, 2024, a quarterly dividend of US$0.10 per common share and filing of our annual information form. We will be hosting a live webcast to discuss our Q4 2024 results on Wednesday March 19, 2025 at 8:00 a.m. Mountain time.
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:
"Through 2024 we increased our productive capacity both at the Caburé Unit and on our 100% interest Murucututu project. This allowed us to increase our firm natural gas sales volumes for 2025 resulting in a strong start to the year with a 37% increase in our sales volumes. We are increasing our base dividend to US$0.10 per share, consistent with our long-standing commitment to a more disciplined capital allocation model, balancing returns to stakeholders and organic growth."
Operational Update
As announced on December 17, 2024, our updated long-term gas sales agreement came into effect on January 1, 2025 increasing Alvopetro's contracted firm reference volumes by 33%. As a result, Alvopetro's daily sales in January and February increased 37% from Q4 2024 sales to an average of 2,375 boepd, including 13.4 MMcfpd of natural gas, natural gas liquids sales from condensate of 129 bopd and oil sales of 10 bopd. Effective February 1, 2025, our natural gas price under our long-term gas sales agreement with Bahiagás has been adjusted to BRL1.95/m3, a 7% increase from the January 2025 price of BRL1.83/m3 and consistent with the Q4 2024 price of BRL1.94/m3. All natural gas sales from February 1, 2025 to April 30, 2025 will be sold at BRL1.95/m3 ($10.55/Mcf, net of applicable sales taxes, based on average heat content to date and the January 31, 2025 BRL/USD exchange rate of 5.83).
On February 5, 2025, we announced the terms of a farmin agreement in Canada, pursuant to which Alvopetro agreed to fund 100% of two earning wells in exchange for a 50% non-operated working interest in 12,243 acres (6,122 net acres) of land in Western Saskatchewan. The first two earning wells have now been drilled and are being completed and equipped. Both wells are expected to be on production within the next 30 days. Alvopetro's estimated total costs for the two earning wells is expected to be approximately C$4.0 million ($2.8 million). After these initial two earning wells Alvopetro's working interest will be 50%.
On the Company's Murucututu natural gas field, we spud the first of two development wells planned for 2025 in February. Drilling is underway. On the unitized area (the "Unit") which includes the Caburé natural gas field, Alvopetro has five development wells planned for 2025, with the first well expected to be drilled in April.
On February 26, 2025, we announced our December 31, 2024 reserves based on the independent reserve assessment and evaluation prepared by GLJ Ltd. ("GLJ") dated February 26, 2025 with an effective date of December 31, 2024 (the "GLJ Reserves and Resources Report"). Highlights include:
After 2024 production of 0.7 MMboe, 1P reserves increased 65% to 4.5 MMboe, representing a 1P production replacement ratio(1) of 372%. The increase was mainly due to the successful working interest redetermination at the Caburé field and increases of Caruaçu assigned reserves on our 100% Murucututu field following success on the 183-A3 well completion, somewhat offset by technical revisions related to the Gomo Formation.
2P reserve volumes increased 5% to 9.1 MMboe, representing a 2P production replacement ratio of 167%(1). The increase in 2P volumes was due to the higher working interest on the Caburé field following the redetermination, partially offset by 2024 production of 0.7 MMboe. At Murucututu, additional reserves associated with the Caruaçu reservoir were offset by technical revisions reducing reserves assigned to the Gomo Formation.
With increased reserve volumes, 1P net present value before tax, discounted at 10% ("NPV10") increased 53% to $177.7 million and 2P NPV10 increased 6% to $327.8 million.
Risked best estimate contingent resources decreased by 0.8 MMboe from 5.4 MMboe to 4.5 MMboe at December 31, 2024 with a NPV10 of $110.0 million, decreases from December 31, 2023 of 15% and 13% respectively. The decreases were associated with the migration of volumes to reserves for the Caruaçu Formation.
Risked best estimate prospective resources increased from 9.6 MMboe to 10.2 MMboe with a NPV10 of $208.9 million, increases of 6% and 13% respectively from December 31, 2023.
Financial and Operating Highlights, Fourth Quarter of 2024
Our average daily sales decreased to 1,738 boepd in Q4 2024 (-19% from Q4 2023 and -17% from Q3 2024) with reduced natural gas demand as well as shutdowns during the month of November for planned facility turnarounds and inspections.
Our average realized natural gas price decreased to $10.51/Mcf in Q4 2024 (-18% from Q4 2023 and -4% from Q3 2024), due mainly to the devaluation of the BRL relative to the USD, which depreciated 18% compared to the average rate in Q4 2023. Our overall averaged realized sales price was $63.88 per boe (-18% from Q4 2023 and -4% from Q3 2024).
With lower sales volumes and lower prices, our natural gas, oil and condensate revenue decreased to $10.2 million (-33% from Q4 2023 and -21% from Q3 2024).
Our operating netback(1) in the quarter was $55.09 per boe (-$14.60 per boe from Q4 2023) due mainly to the reduction in our realized sales price per boe as well as higher production expenses per boe with lower overall production.
We generated funds flows from operations(1) of $7.0 million ($0.19 per basic share and per diluted share), decreases of $5.4 million compared to Q4 2023 and $2.9 million compared to Q3 2024 due mainly to lower sales volumes and lower realized prices.
We reported net income of $2.2 million in Q4 2024, an increase of $1.6 million compared to Q4 2023 despite lower sales volumes and realized prices due to impairment losses recognized in Q4 2023, offset by foreign exchange losses in Q4 2024 compared to foreign exchange gains in Q4 2023.
Capital expenditures totaled $4.7 million, including costs to re-enter the 183-B1 well on our exploratory Block 183 and costs associated with the facilities upgrade at our Caburé field.
Our working capital surplus was $13.2 million as of December 31, 2024, increasing $0.1 million from December 31, 2023 and decreasing $2.7 million from September 30, 2024.
Financial and Operating Highlights, Year Ended December 31, 2024
Our annual sales volumes averaged 1,794 boepd (93% natural gas, 6% NGLs from condensate and 1% from crude oil production), a decrease of 16% compared to 2023.
We reported net income of $16.3 million, compared to $28.5 million in 2023 (-43%).
We generated funds flow from operations(1) of $33.3 million ($0.89 per basic share and per diluted share), a decrease of $14.8 million compared to 2023.
Capital expenditures totaled $15.3 million in 2024.
Dividends declared totaled $0.36 per share in 2024 compared to $0.56 per share in 2023 (-36%).
(1) Refer to the sections entitled "Oil and Natural Gas Advisories, Other Metrics" and "Non-GAAP and Other Financial Measures".
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.
As at and Three Months Ended
December 31
As at and Year Ended
December 31,
2024
2023
Change (%)
2024
2023
Change (%)
Financial
($000s, except where noted)
Natural gas, oil and condensate sales
10,214
15,300
(33)
45,517
59,687
(24)
Net income
2,243
652
244
16,295
28,525
(43)
Per share, basic ($)(1)
0.06
0.02
200
0.44
0.77
(43)
Per share, diluted ($)(1)
0.06
0.02
200
0.43
0.76
(43)
Cash flows from operating activities
7,114
7,904
(10)
34,901
47,702
(27)
Per share, basic ($)(1)
0.19
0.21
(10)
0.94
1.29
(27)
Per share, diluted ($)(1)
0.19
0.21
(10)
0.93
1.26
(26)
Funds flow from operations(2)
6,966
12,393
(44)
33,275
48,030
(31)
Per share, basic ($)(1)
0.19
0.33
(42)
0.89
1.29
(31)
Per share, diluted ($)(1)
0.19
0.33
(42)
0.89
1.27
(30)
Dividends declared
3,283
5,127
(36)
13,170
20,462
(36)
Per share(1) (2)
0.09
0.14
(36)
0.36
0.56
(36)
Capital expenditures
4,682
4,934
(5)
15,305
27,449
(44)
Cash and cash equivalents
21,697
18,326
18
21,697
18,326
18
Net working capital(2)
13,181
13,117
-
13,181
13,117
-
Weighted average shares outstanding
Basic (000s)(1)
37,315
37,262
-
37,289
37,121
-
Diluted (000s)(1)
37,566
37,963
(1)
37,558
37,770
(1)
Operations
Average daily sales volumes:
Natural gas (Mcfpd), by field:
