Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (June 2023)
29 slides from Alvopetro Energy's investor presentation, Jun 5, 2023
Slide 1: Corporation Presentation June 2023
Corporation Presentation June 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 US$ millions Average daily trading volume(1) 64,993 600 Insider ownership(1) 10.8% Current Enterprise Value 400 Market cap/Enterprise value(2) $253 million/
Slide 4: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns 197(1) well on 9.50 production +17% quarterly dividend 9.00 ($0.14/share) 8.50 +17% 2P reserves +50% quarterly dividend 8.00 ($0.12/share) value (NPV10BT) 7.50 Credit Facility repaid 7.00 +33% quarterly dividend ($0.08/share) 6.50 6.00 +52% 2P reserves value
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 MMcfpd (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 June 2, 2023)
Gas Sales Agreement (Futures Pricing June 2, 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 2025 based on futures pricing effective June 2, 2023. The ceiling price incorporates US inflation of 3% in 2023 and 2%
Slide 10: Strong Production Results
Strong Production Results Alvopetro - Daily sales volumes (boepd) 2,642 2,724 2,767 2,459 2,432 2,501 2 5 5 2,361 2 12 2,359 117 128 130 2 2,500 5 99 5 2,175 107 103 97 1,950 - 105 1,972 - 98 - 1,888 2,000 1,764 - 89 84 9 94 79 1,500 2,350 2,328 2,390 2,523 2,591 2,633 2,077 2,252 2,258 1,000 1,888
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 margin 90% 65% 80% 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 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 17: Murucututu Deep Basin Gomo Natural Gas Resource (100% ALV)
Murucututu Deep Basin Gomo Natural Gas Resource (100% ALV) A A’ Jan2 197-1 183-1 Murucututu/Gomo Project Dev well: 183- ALV 183-B1 A2 183-A2 ALV 182-C1 ALV 183-1 Dev well: 183- Dev well: 197- ALV 197-A2 D1 183-D1 A2 ALV 197-1 ALV 197-A3 Alvopetro Dev well: 197- Pipeline A3 3275m Caburé Field (49%) 3
Slide 18: Murucututu 2021 (100% ALV)
Murucututu 2021 (100% ALV) | TSXV: ALV, OTCQX: ALVOF 18
Slide 19: Murucututu Today
Murucututu Today | TSXV: ALV, OTCQX: ALVOF 19
Slide 20: Murucututu (Gomo) Project Development 183-1 Location
Murucututu (Gomo) Project Development 183-1 Location | TSXV: ALV, OTCQX: ALVOF 20
Slide 21: Murucututu (Gomo) – 197(1) Stimulation
Murucututu (Gomo) – 197(1) Stimulation • 197(1) stimulation completed in May • Four intervals stimulated, injected 125 tonnes of sand • After clean-up flow period, initiated natural gas sales at restricted rates (20/64” choke) of 1.3 MMcfpd + 13 bpd of condensate (226 boepd) | TSXV: ALV, OTCQX: ALVO
Slide 22: 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 23: 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 24: 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 25: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 25
Slide 26: 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 27: 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 28: 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 29: Endnotes
Endnotes 1. As of June 5, 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 December 6, 2022 and ending on June 5, 2023. 2. Enterprise value of $232.0 million is computed as US$ m