Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (February 2024)
30 slides from Alvopetro Energy's investor presentation, February 2024
Slide 1: Corporate Presentation February 2024
Corporate Presentation February 2024 TSXV: ALV OTCQX: ALVOF | TSXV: ALV, OTCQX: ALVOF
Slide 2: 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 3: At a Glance – Value, Yield, Growth
At a Glance – Value, Yield, Growth Market Summary Reserves & Resources, NPV10 before tax (4)(8)(9) 1,000 Shares outstanding(1) 36.6 million 800 US$ millions Average daily trading volume(1) 53,212 600 Insider ownership(1) 10.6% 400 Current Enterprise Value Market cap/Enterprise value(2) $155 million/
Slide 4: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns 197(1) well on 183-A3 production well results 10.00 +17% quarterly dividend ($0.14/share) 9.00 +50% quarterly dividend ($0.12/share) +17% 2P reserves value (NPV10BT) 8.00 Credit Facility repaid +33% quarterly 7.00 dividend ($0.08/share) CAD$ Share price (TSX
Slide 5: 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 12th largest economy Brazil Attractive fiscal regime with 5.5-11% royalties & 15%-34% income tax Stable regulatory framework at
Slide 6: 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 7: 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 Project • Unitized area development - 8 wells and all production facilities (100%) • Gross Unit production capacity up 33% to 21.2 MMcfpd (600 e3m3) ALV 183-B1
Slide 8: Midstream - Infrastructure & Marketing (100% ALV)
Midstream - Infrastructure & Marketing (100% ALV) • 11-km transfer pipeline & Gas Plant (UPGN) with 18+ MMcfpd capacity Murucututu Project (100%) • Bahiagás 15-km Distribution pipeline & 70 MMcfpd citygate at our plant site • Price set semi-annually based on Brent, Henry Hub and UK NBP benchmark pri
Slide 9: Gas Sales Agreement (Futures Pricing Jan 31, 2024)
Gas Sales Agreement (Futures Pricing Jan 31, 2024) As of February 1, 2024 Alvopetro’s contracted natural gas price is at the ceiling. Forecast above reflects futures pricing effective Jan 31, 2024. Floor & ceiling prices incorporate US inflation of 2%. BRL:USD 4.95:1 | TSXV: ALV, OTCQX: ALVOF 9
Slide 10: Strong Production Results
Strong Production Results Alvopetro - Daily sales volumes (boepd) 2,642 2,724 2,767 5 2,501 2,359 5 2,361 2,459 2,432 2 2 12 128 130 2,500 5 2 5 117 2,175 - 107 103 99 2,143 1,950 105 97 1,975 10 1,764 - 98 5 92 1,699 2,000 - 89 92 1,696 3 9 79 81 75 1,500 2,350 2,328 2,390 2,523 2,591 2,633 2,077 2
Slide 11: Operating Netback
Operating Netback Q3 operating netback margin of 89% Operating Netback(10)- $/boe Operating netback as a % of realized sales price 91% 90% Q3 realized price of $78.90/boe 87% 89% Including natural gas sales of $13.06/Mcf 82% Operating Netback Margin(10) (% of Sales Price) 82% 77.41 78.90 80.00 72.92
Slide 12: Industry-Leading Operating Netback Margins
Industry-Leading Operating Netback Margins Operating Netback Margin %(10) 100% 89% 90% Average netback margin 80% 65% 70% 60% 50% 40% 30% 20% 10% 0% ALV Alvopetro Q3 2023 operating netback margin compared to other selected publicly listed oil and natural gas producers operating in Latin America, Can
Slide 13: Disciplined Capital Allocation – Balancing Organic Growth & Returns
Disciplined Capital Allocation – Balancing Organic Growth & Returns Funds Flow From Operations(10) & Capital Allocation Allocation of Funds Flow from Operations July 2020 to September 30, 2023 9,618 Share Building cash 14,972 repurchases and working 16,000 13,348 1% capital 11,047 12,434 13,193 7% 1
Slide 14: Organic Growth Plan
Organic Growth Plan Near-term goal of 18 MMcfepd Longer-term vision of 35 MMcfepd Caburé Unit and midstream expansion Bom Lugar Field • Gas plant expansion to 18+ MMcfpd completed in July 2022 • Expanded Unit capacity with additional development wells and facility expansion Murucututu (100%) • 183(1
Slide 15: Murucututu Gas – Gomo Development + Caruaçu Upside (100% ALV)
Murucututu Gas – Gomo Development + Caruaçu Upside (100% ALV) A 1 km A’ Jan2 197-1 183-A3 183-1 Murucututu Project (100%) GR GR GR GR A’ Dev well: ALV 183-B1 183-A2 183-A2 ALV 182-C1 ALV 183-1 Dev well: Dev well: ALV 197-A2 183-A3 Sequence 7 183-A3 197-A2 ALV 197-1 ALV 197-A3 A Alvopetro TWT Dev wel
Slide 16: Murucututu 2021 (100% ALV)
Murucututu 2021 (100% ALV) | TSXV: ALV, OTCQX: ALVOF 16
Slide 17: Murucututu 2022
Murucututu 2022 | TSXV: ALV, OTCQX: ALVOF 17
Slide 18: Murucututu Project Development 183-1 Location
Murucututu Project Development 183-1 Location | TSXV: ALV, OTCQX: ALVOF 18
Slide 19: Expanded view of Sequence 6.2
183-A3 Regional Caruaçu Stacked Sands Downdip of Caburé (100% ALV) 7-ALV-183-A3-ST1-BA COMPANY: ALVOPETRO VERTICAL SCALE: 1:1000 ELEVATION MEAS. REF.: 75.76 DATE LOGGED: 10/09/2023 DRILLED DEPTH: 3552.50 Top Maracangalha Seq 7 Time Structure 20ms CI Shale Porosity Saturation PAY MDT • Structure-Stra
Slide 20: Regional Seismic Section from Miranga-Murucututu-Caburé-Jaquipe
Regional Seismic Section from Miranga-Murucututu-Caburé-Jaquipe Miranga Caburé Jaquipe N Murucututu S Angular Unconformity Miranga Pojuca Pojuca Miranga Profundo SynRift Caruacu/Gomo/Candeias Candeias Basement Candeias Caburé Jaquipe | TSXV: ALV, OTCQX: ALVOF 20
Slide 21: Murucututu Today
Murucututu Today | TSXV: ALV, OTCQX: ALVOF 21
Slide 22: Murucututu Multi-Year Development Plan
Murucututu Multi-Year Development Plan • Gomo Reserves: 2 existing wells + 4 undeveloped locations (183-A3, 183-A2, 197-A2 and 197-A3) • Contingent Gomo Resource: 3 development wells • Prospective Gomo Resource: 10 additional wells • + Caruacu Upside | TSXV: ALV, OTCQX: ALVOF 22
Slide 23: 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) • Higher heating value 1.22 MMBtu/Mcf • Capex: $5.8 million • F&D: $6.50/boe* • First
Slide 24: ESG – 2022 Highlights
ESG – 2022 Highlights We are focused on responsibly supplying energy, minimizing our environmental impact, and generating lasting benefits for all our stakeholders ENVIRONMENTAL SOCIAL GOVERNANCE Responsibly Supply Energy Strengthening Our Communities Diversity & Talent NATURAL GAS focused Strategic
Slide 25: 2023 Voluntary Social Investment Plan
2023 Voluntary Social Investment Plan | TSXV: ALV, OTCQX: ALVOF 25
Slide 26: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 26
Slide 27: TSXV: ALV OTCQX: ALVOF
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 28: 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 29: Cautionary Statements
Cautionary Statements • Net Present Value and Reserves Disclosed. The net present value of future net revenue attributable to Alvopetro’s reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, devel
Slide 30: Endnotes
Endnotes 1. As of February 2, 2024. Average daily trading volume is based on average volumes traded on all Canadian exchanges (TSXV and other Canadian) and on the OTCQX in the six months commencing on August 3, 2023 and ending on February 2, 2024. 2. Enterprise value of $143.5 million is computed as
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