Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (May 2023)
28 slides from Alvopetro Energy's investor presentation, May 10, 2023
Slide 1: Corporation Presentation May 2023
Corporation Presentation May 2023 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) 36.5 million 800 Average daily trading volume(1) 67,661 US$ millions 600 Insider ownership(1) 10.8% 400 Current Enterprise Value Market cap/Enterprise value(2) $211 million/
Slide 4: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns +17% quarterly dividend +50% quarterly +17% 2P reserves ($0.14/share) 8.50 value (NPV10BT) dividend 8.00 ($0.12/share) 7.50 Credit Facility repaid 7.00 +33% quarterly dividend ($0.08/share) 6.50 6.00 +52% 2P reserves value 5.50 CAD$ Share price (TSXV) First
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/Gomo project (100%) • Unitized area development - 8 wells and all production facilities • Gross Unit production capacity up 33% to 21.2 MMcf/d (600 e3m3) ALV 1
Slide 8: Midstream - Infrastructure & Marketing (100% ALV)
Midstream - Infrastructure & Marketing (100% ALV) • 11-km transfer pipeline & Gas Plant (UPGN) with 18+ MMcfpd capacity • Bahiagás 15-km Distribution pipeline & 70 MMcfpd citygate at our plant site Murucututu/Gomo project (100%) • Price set semi-annually based on Brent, Henry Hub and UK NBP benchmar
Slide 9: Gas Sales Agreement (Futures Pricing May 9, 2023)
Gas Sales Agreement (Futures Pricing May 9, 2023) As of February 1, 2023 Alvopetro’s contracted natural gas price is at the ceiling and is forecasted to remain at the ceiling until 2027 based on GLJ forecast prices as of December 31, 2022 and futures pricing effective May 9, 2023. The ceiling price
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 2,642 2,724 5 2,767 5 2 2,361 2 2 12 2,359 117 128 130 2,500 5 99 5 2,175 - 105 107 103 97 1,950 - 98 1,972 - 2,000 1,764 - 89 84 79 1,500 2,523 2,591 2,633 2,252 2,350 2,328
Slide 11: Operating Netback
Operating Netback Operating Netback(10)- $/boe 91% 87% 87% 87% 88% Operating Netback Margin(10) (% of Sales Price) 80.00 85% 83% 83% 80% 82% 72.92 79% 73.54 68.59 68.13 2.34 80% 70.00 5.35 3.97 62.08 4.23 5.42 4.15 Operating netback - $/boe 60.00 4.35 3.34 3.90 3.79 60% 50.00 44.04 44.22 38.08 4.02
Slide 12: Industry-Leading Operating Netback Margins
Industry-Leading Operating Netback Margins Operating Netback Margin %(10) 100% 91% Average netback 90% margin 80% 62% 70% 60% 50% 40% 30% 20% 10% 0% ALV Alvopetro Q1 2023 operating netback margin compared to other selected publicly listed oil and natural gas producers operating in Latin America or C
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 March 31, 2023 16,000 13,348 14,972 13,193 Building cash 12,434 and working 12,000 10,904 capital Capex Share 19% 34% repurcha
Slide 14: ESG – 2021 Highlights
ESG – 2021 Highlights | TSXV: ALV, OTCQX: ALVOF 14
Slide 15: 2023 Voluntary Social Investment Plan
2023 Voluntary Social Investment Plan | TSXV: ALV, OTCQX: ALVOF 15
Slide 16: Organic Growth Plan
Organic Growth Plan Near-term goal of 18 MMcfepd Exploration well: Murucututu/Gomo project Longer-term vision of 35 MMcfepd (100%) ALV 183-B1 Dev well: Caburé Unit and midstream expansion ALV 183-B1 183-A2 183-A2 • Gas plant expansion to 18+ MMcfpd completed in July 2022 ALV 182-C ALV 183-1 Dev well
Slide 17: Murucututu 2021 (100% ALV)
Murucututu 2021 (100% ALV) | TSXV: ALV, OTCQX: ALVOF 17
Slide 18: Murucututu Today
Murucututu Today | TSXV: ALV, OTCQX: ALVOF 18
Slide 19: Murucututu (Gomo) Project Development 183-1 Location
Murucututu (Gomo) Project Development 183-1 Location | TSXV: ALV, OTCQX: ALVOF 19
Slide 20: Murucututu Multi-Year Development Plan
Murucututu Multi-Year Development Plan • Reserves: 2 existing wells + 4 undeveloped locations (183-D1, 183-A2, 197-A2 and 197-A3) • Contingent Resource: 3 development wells • Prospective Resource: 10 additional wells Dev well: 183-A2 Dev well: 197-A2 Dev well: Dev well: 183-D1 197-A3 | TSXV: ALV, OT
Slide 21: Bom Lugar Development Drilling
Bom Lugar Development Drilling • Well step out ~400m from existing location (312 Mbbl cumulative production) • Up to two development locations planned for 2023(4): one location assigned 2P reserves of 0.3 Mmboe. First well (BL-06) spud on April 30th • Incremental volumes in the Gomo, potential for l
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: 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 183-A2 183-A2 ALV 182-C1 ALV 183-1 Dev well: Dev well: ALV 197-A2 183-D1 183-D1 197-A2 ALV 197-1 ALV 197-A3 Alvopetro Dev well: Pipeline 197-A3 3275m Caburé field (49%
Slide 25: 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:
Slide 26: 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 27: 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 28: Endnotes
Endnotes 1. As of May 10, 2023. 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 November 14, 2022 and ending on May 10, 2023. 2. Enterprise value of $189.8 million is computed as US$