Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Shareholder Meeting (June 2022)
33 slides from Alvopetro Energy's shareholder meeting presentation, Jun 22, 2022
Slide 1: Annual General Meeting June 22, 2022
Annual General Meeting June 22, 2022 TSXV: ALV OTCQX: ALVOF | TSXV: ALV, OTCQX: ALVOF
Slide 2: 2021 A Year in Review
2021 A Year in Review • Production increased 151% to 2,358 boepd • Caburé Unit gross production plateau increased by one-third to 21 mmcfpd • Funds flow from operations increased by 296% to $24.6 million • 2P NPV10 BT increased by 52% to $297 million • Zero lost-time incidents & no reportable spills
Slide 3: Alvopetro - A Leading Brazilian Independent Natural Gas Company
Alvopetro - A Leading Brazilian Independent Natural Gas Company First Brazilian integrated onshore natural gas producer Strong operating and financial results well ahead of expectations Balanced reinvestment and stakeholder return model Demonstrated ESG commitment Proven team with successful LatAm t
Slide 4: At a Glance – Value, Yield, Growth
At a Glance – Value, Yield, Growth Market Summary Reserves & Risked Best Estimate Resources, NPV10 before Shares outstanding(1) 34.1 million 700 tax (4)(8)(9)(12) 600 Average daily trading volume(1) 54,087 500 US$ millions Insider ownership(1) 11.0% 400 2PNPV10BT 300 Market cap/Enterprise value(2) $
Slide 5: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns 8.00 7.50 182-C1 Discovery 7.00 +33% quarterly dividend ($0.08/share) 6.50 6.00 +52% 2P First quarterly reserves value 5.50 dividend (NPV10BT) declared CAD$ Share price (TSXV) 5.00 ($0.06/share) 4.50 4.00 Share Restructuring and Buyback 3.50 +30% 2P First AL
Slide 6: Brazil a Growing Market with Attractive Fundamentals
Brazil a Growing Market with Attractive Fundamentals Largest oil producer in S. America and 9th globally New natural gas market. 48% of supply is currently imported World’s 9th largest economy Brazil Attractive fiscal regime with 5.5-11% royalties & 15%-34% income tax Stable regulatory framework att
Slide 7: State of Bahia – Reconcavo Basin
State of Bahia – Reconcavo Basin • Oldest producing basin in Brazil: 23.9 Mbopd + 2.2 e6m3/d (77 MMcf/d) • Brazil's 4th largest city Salvador (pop 2.9 million) • Well developed industrialized region • Majority of natural gas consumed in Camacari industrial complex • Highly strategic infrastructure B
Slide 8: Caburé – Asset Overview (49.1% ALV)
Caburé – Asset Overview (49.1% ALV) • The Caburé field is a joint development of a conventional natural gas discovery - ALV 49.1% Murucututu/Gomo project • Unitized area development - 7 wells and all production facilities (100%) • Gross Unit production capacity up 33% to 21.2 MMcf/d (600 e3m3) ALV 1
Slide 9: Midstream - Infrastructure & Marketing (100% ALV)
Midstream - Infrastructure & Marketing (100% ALV) • 11-km transfer pipeline & Gas Plant (UPGN) with 18+ MMcfpd capacity Murucututu/Gomo project (100%) • Bahiagás 15-km Distribution pipeline & 70 MMcfpd citygate at our plant site ALV 183-B1 • Price set semi-annually based on Brent, Henry Hub and UK N
Slide 10: Production Results Well Ahead of Pre-Commercialization Expectations
Production Results Well Ahead of Pre-Commercialization Expectations Alvopetro - Daily sales volumes (boepd) 2,459 2,432 2,501 2,494 2,361 2 2 12 - 2,500 5 99 107 2,111 2,175 - 105 107 9 1,950 - 98 103 81 2,000 1,764 - 89 79 1,500 2,252 2,350 2,328 2,390 2,387 1,000 2,077 2,021 1,684 1,860 500 11 14
Slide 11: Operating Netback
Operating Netback Operating Netback- $/boe Operating Netback Margin(11) (% of Sales Price) 85% 87% 70.00 80% 83% 83% 82% 79% 62.08 80% Operating netback - $/boe 60.00 4.35 3.79 50.00 60% 44.04 44.22 38.08 4.02 4.22 40.00 35.45 3.64 3.62 32.79 32.82 2.82 1.51 3.30 3.68 40% 30.00 2.81 3.39 3.63 3.99 5
Slide 12: Industry-Leading Operating Netback Margins
Industry-Leading Operating Netback Margins Operating Netback Margin% (11) Q1 2022 100% 90% 87% Average margin - 69% 80% 70% 60% 50% 40% 30% 20% 10% 0% ALV Alvopetro Q1 2022 operating netback margin compared to other publicly listed oil and gas producers operating in Latin America or Canada. See ‘Non
Slide 13: Disciplined Capital Allocation – 50% to Growth / 50% to Stakeholders
Disciplined Capital Allocation – 50% to Growth / 50% to Stakeholders Funds Flow From Operations(11) & Capital Allocation 12,000 10,904 10,000 7,930 8,000 5,471 6,480 US$000's 6,000 4,756 4,252 3,610 4,000 2,000 - Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Capital expenditures Credit Fac
Slide 14: ESG – 2021 Highlights
ESG – 2021 Highlights | TSXV: ALV, OTCQX: ALVOF 14
Slide 15: Social Investment - Music & Arts Conservatory
Social Investment - Music & Arts Conservatory Fostering artistic talent and bringing kids back to school Free after-school music lessons Commenced February 2022 for local youth aged 7 to 21 80 hours of workshops Marching Band 31 Girls 29 Boys Philarmonica 16 Girls 37 Boys 3 Teachers 1 Educational Ps
Slide 16: Social Investment - Sow & Grow Project
Social Investment - Sow & Grow Project Promoting sustainable farming practices in our region “In the Summer water becomes 10 scarce here. This water treatment Greywater treatment and reuse process is very systems installed important for people who live off the land.“ 60% Mrs. Osnete Souza of househo
Slide 17: Organic Growth Plan
Organic Growth Plan Murucututu/Gomo project Near-term goal of 18 MMcfpd Exploration well: (100%) Longer-term vision of 35 MMcfpd ALV 183-B1 Dev well: ALV 183-B1 MUR-1 Caburé Unit and midstream expansion MUR-1 ALV 182-C1 ALV 183-1 Dev well: • Gas plant expansion mid-2022 to 18+ MMcfpd MURS-1 MURS-1 A
Slide 18: Near-Term Catalysts
Near-Term Catalysts 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 (Production timing, w/ success) 182-C1 Prospect Drilling Test Drill 182-C2 Exploration 183-B1 well Drilling Unit C well Drilling Murucututu Development 183-1 well Tie-in, EPF construction 197-1 well Stim/tie-in MUR-1 well Drilling Stim/tie-in
Slide 19: Reserves and Risked Resources – Value & Growth
Reserves and Risked Resources – Value & Growth Reserves & Risked Resources (MMboe) (4)(8)(9)(12) Reserves & Risked Best Estimate Resources, NPV10 40 before tax (4)(8)(9)(12) 700 600 30 500 MMboe US$ millions 400 20 2PNPV10BT Risked upside US$297MM 300 Current Enterprise value 200 (US$153MM) 10 100 C
Slide 20: Longer-Term Vision
Longer-Term Vision 6,000 5,000 4,000 Growth BOEPD 3,000 2,000 Base 1,000 - 2021 2022 2023 2024 2025 2026 Year | TSXV: ALV, OTCQX: ALVOF 20
Slide 21: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 21
Slide 22: Contact
TSXV: ALV OTCQX: ALVOF Calgary, Canada: Alvopetro Energy Ltd. Suite 1920, 215 – 9th Avenue SW Calgary, Alberta, Canada T2P 1K3 Tel: (587) 794-4224 Email: info@alvopetro.com Salvador, Brazil: Alvopetro S/A Extração de Petróleo e Gás Natural Rua Ewerton Visco, 290, Boulevard Side Empresarial, Sala 200
Slide 23: Cautionary Statements
Cautionary Statements • Forward Looking Statements. This presentation contains forward-looking statements including forecasted future earnings and sales volumes, forecasted natural gas prices under the Company’s long-term gas sales agreement, the anticipated timing of projects, future exploration an
Slide 24: Endnotes
Endnotes 1. As of June 21, 2022. Average daily trading volume is based on average volumes traded to date in 2022 on all Canadian exchanges (TSXV and other Canadian) and on the OTCQX from January 1, 2022 to June 21, 2022. 2. Enterprise value of US$153.0 million is computed as US$ market cap of $160.3
Slide 25: Appendix: Additional Technical Materials
Appendix Additional Technical Materials | TSXV: ALV, OTCQX: ALVOF
Slide 26: 2022 Gas Exploration Drilling Program (100% ALV)
2022 Gas Exploration Drilling Program (100% ALV) Fazenda Belem Tie Exploration well: Murucututu/Gomo project Miranga ALV 183-B1 (100%) Agua Grande Biriba ALV 183-B1 ALV 182-C1 ALV 183-1 Alvopetro Pipeline ALV 197-1 Sussuarana Exploration well: Rio Pojuca ALV 182-C1 ALV-183-B1 ALV-182-C1 Murucututu C
Slide 27: ALV-182-C1 Discovery - Agua Grande Formation (100% ALV)
ALV-182-C1 Discovery - Agua Grande Formation (100% ALV) • 182-C1 well was spud on March 2, 2022 and drilled to a total measured depth of 2,926 metres • 36-metre-thick Agua Grande sand at 2,550 to • Based on open-hole logs, the well discovered 25 metres of potential natural gas pay in Agua 2,586 metr
Slide 28: ALV-182-C1 Seismic Tie
ALV-182-C1 Seismic Tie • Well to seismic interpretation indicates we crossed a normal fault in the Itaparica below the Agua Grande and missed the Sergi Fm • ~50 m from bounding fault ~300m fault offset at AG • Likely calcite cementation impact due to proximity to the fault Taua AG Sergi AG Taua Boip
Slide 29: ALV-183-B1 Pre-Rift Agua Grande/Sergi Gas Prospect (100% ALV)
ALV-183-B1 Pre-Rift Agua Grande/Sergi Gas Prospect (100% ALV) A A A A” Tie A ’ 182-C1 Block Agua Grande 183-B1 Block Biriba Biriba Sussuarana A’ A’ Rio Pojuca Sussuarana ALV-183-B1 A”A” ALV-182-C1 Murucututu Agua Grande Time Structure • Spud June 5, 2022 Basement • 3,100 meters TVD (100% WI) Basemen
Slide 30: ALV-183-B1 Prospect - Spud June 5, 2022
ALV-183-B1 Prospect - Spud June 5, 2022 | TSXV: ALVOPETRO ENERGY LTD.ALV|,TSXV: OTCQX: ALVALVOF , OTCQX: ALVOF 30
Slide 31: Murucututu Deep Basin Gomo Natural Gas Resource (100% ALV)
Murucututu Deep Basin Gomo Natural Gas Resource (100% ALV) Murucututu/Gomo project A A’ Jan2 197-1 183-1 (100%) Dev well: ALV 183-B1 MUR-1 MUR-1 ALV 182-C1 ALV 183-1 Dev well: MURS-1 MURS-1 ALV 197-1 Alvopetro Pipeline 3275m Caburé field (49%) 3550m Tested Gas • 5,460-acre deep basin gas resource •
Slide 32: Murucututu Multi-Year Gomo Development Plan
Murucututu Multi-Year Gomo Development Plan • Reserves: 2 existing wells + 2 undeveloped locations (MURS-1 & MUR-1) • Contingent Resource: 4 development wells • Prospective Resource: 10 additional wells | TSXV: ALV, OTCQX: ALVOF 32
Slide 33: Murucututu Development: Single Well Gomo Economics
Murucututu Development: Single Well Gomo Economics 2P assessment (GLJ)(4): • 4.7 Bcf sales gas + 115 Mbbls of condensate = 0.9 MMboe • Year 1 average production rate: • 1.34 MMcfpd, 257 boepd (including condensate) • Field condensate rate is 24 bbl/MMcf • Higher heating value 1.22 MMBtu/Mcf • Capex: