Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (May 2022)
26 slides from Alvopetro Energy's investor presentation, May 2022
Slide 1: Corporate Presentation May 2022
Corporate Presentation May 2022 TSXV: ALV OTCQX: ALVOF | TSXV: ALV, OTCQX: ALVOF
Slide 2: 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 3: Cautionary Statements
Cautionary Statements • Net Present Value. 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, development costs, other inc
Slide 4: Alvopetro - A Leading Brazilian Independent Gas Company
Alvopetro - A Leading Brazilian Independent Gas Company First Brazilian integrated onshore natural gas producer • Strategic midstream infrastructure to support organic growth (100% working interest) • 8.7 MMboe 2P (4) (88% natural gas) with focus on core Caburé field & Murucututu Gomo natural gas pr
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 9th 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 • Alvopetro SA operating in Brazil since 2006, acquired blocks in Rounds 7, 9, 11, 12, & 13 • Reconcavo Basin: 23.9 Mbopd + 2.2 e6m3/d (77 MMcf/d) • Alvopetro produces 18% of Basin's natural gas production • Brazil's 4th largest cit
Slide 7: Production Results Ahead of Expectations
Production Results Ahead of Expectations Alvopetro - Daily sales volumes (boepd) 2,459 2,432 2,501 2,494 2,361 2 2 12 - 2,500 5 99 107 2,175 107 103 - 105 1,950 - 98 2,000 1,764 - 89 79 1,500 2,252 2,350 2,328 2,390 2,387 1,000 2,077 1,684 1,860 500 - Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Slide 8: Strong Operating Netback Margins
Strong Operating Netback Margins Operating Netback(11) ($/boe) 85% 83% 83% 82% 50.00 79% 80% 44.04 44.22 80% Operating Netback Margin(11) (% of Sales Price) 4.02 4.22 40.00 38.08 Operating Netback - $/boe 35.45 3.64 3.62 32.79 32.82 2.82 60% 3.30 3.68 2.81 1.51 30.00 3.39 3.63 3.99 40% 20.00 36.38 3
Slide 9: Capital Allocation & Dividend History
Capital Allocation & Dividend History Funds Flow From Operations(11) & Capital Allocation Dividend History (Current Annualized Yield – 7.5%) 7,930 $0.08 8,000 Dividends declared – US$/share 5,471 6,480 6,000 $0.06 4,756 4,252 US$000's 3,610 4,000 $0.04 $0.08 2,000 $0.06 $0.06 $0.02 - Q3 2020 Q4 2020
Slide 10: 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 (100%) • Unitized area development - 7 wells and all production facilities • Gross Unit production capacity up to 21.2 MMcf/d (600 e3m3) ALV 183-B
Slide 11: 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 • First non-Petrobras gas plant in state of Bahia ALV 182-C1
Slide 12: ESG – First Year of Caburé Operations
ESG – First Year of Caburé Operations | TSXV: ALV, OTCQX: ALVOF 12
Slide 13: 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 (100%) MURS-1 M
Slide 14: 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 15: 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 • Based on open-hole logs, the well discovered 25 metres of potential natural gas pay in Agua Grande Formation sand at 2,
Slide 16: 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 Basement Basement • 3,100 meters TVD (100% WI) • Gas prospect def
Slide 17: 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 18: 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 18
Slide 19: Reserves and Resources – Value & Growth
Reserves and Resources – Value & Growth Reserves & Resources (Mmboe) (4)(8)(9) Reserves & Resources, NPV10 before tax (4)(8)(9) 40 700 600 30 500 US$ millions 400 MMboe 2PNPV10BT 20 US$297MM 300 Current Market Cap** 200 10 C$185MM(US$143MM) 100 0 0 1P Probable 2P Possible Murucutu Murucutu 182-C1 18
Slide 20: Track Record of Delivery
Track Record of Delivery ✓ Caburé unitization completed April 20, 2018 ✓ ALV gas plant and pipeline construction permits filed April 30, 2018 ✓ Bahiagas gas sales agreement signed May 7, 2018 ✓ Gas treatment facility (UPGN) construction & operating agreement September 20, 2018 ✓ Equity financing Oct
Slide 21: Near-Term Catalysts
Near-Term Catalysts 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 182-C1 well Drilling (Production timing, with Exploration success) 183-B1 well Drilling Unit C well Drilling Murucututu Development 183-1 well Tie-in, EPF construction 197-1 well Stim/tie-in MURS-1 well Drilling Stim/tie-in MUR-1 well Drilling
Slide 22: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 22
Slide 23: TSXV: ALV OTCQX: ALVOF
TSXV: ALV OTCQX: ALVOF Calgary, Canada: Alvopetro Energy Ltd. Suite 1920, 215 – 9th Avenue SW Calgary, Alberta, Canada T2P 1K3 Tel: (587) 794-4224 Email: info@alvopetro.com Salvador, Brazil: Alvopetro S/A Extração de Petróleo e Gás Natural Rua Ewerton Visco, 290, Boulevard Side Empresarial, Sala 200
Slide 24: Endnotes
Endnotes 1. As of May 4, 2022. C$ share price and C$ market cap (TSXV), $ share price and $ market cap (OTCQX). 2. Net Asset Value of $299.6 million ($8.83/share, C$11.31/share) includes; 2P NPV10 before tax of $297.0 million of reserves as evaluated by GLJ as at 12/31/21 (discounted at 10%) plus wo
Slide 25: Appendix Additional Technical Materials
Appendix Additional Technical Materials | TSXV: ALV, OTCQX: ALVOF
Slide 26: 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: