Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (June 2022)
28 slides from Alvopetro Energy's investor presentation, June 2022
Slide 1: Corporate Presentation June 2022
Corporate Presentation June 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 2,175 5 107 99 107 2,111 - 105 103 9 1,950 - 98 81 2,000 1,764 - 89 79 1,500 2,252 2,350 2,328 2,390 2,387 1,000 1,860 2,077 2,021 1,684 500 11 14 6 12 - 5- 2- Q1 2020 Q2 202
Slide 8: Strong Operating Netback Margins
Strong Operating Netback Margins 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
Slide 9: Capital Allocation & Dividend History
Capital Allocation & Dividend History Funds Flow From Operations(11) & Capital Allocation Dividend History (Current Annualized Yield – 5.2%) $0.08 12,000 10,904 Dividends declared – US$/share 10,000 +33% 7,930 $0.06 8,000 5,471 6,480 US$000's 6,000 4,252 4,756 3,610 $0.04 $0.08 4,000 $0.06 $0.06 2,0
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 • 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 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 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 16: 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 17: 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 18: ALV-183-B1 Prospect Spud June 5, 2022
ALV-183-B1 Prospect Spud June 5, 2022 | TSXV: ALVOPETRO ENERGY ALV|,TSXV: LTD. OTCQX: ALVALVOF , OTCQX: ALVOF 18
Slide 19: 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 20: 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 20
Slide 21: 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 MMboe US$ millions 400 20 2PNPV10BT US$297MM 300 Current Enterprise value** (US$200MM) 200 10 100 0 0 1P Probable 2P Possible Murucutu Murucutu 182-C1 1
Slide 22: 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 23: 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 24: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 24
Slide 25: 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 26: Endnotes
Endnotes 1. As of June 6, 2022. 2. Enterprise value of US$199.95 million is computed as US$ market cap of $207.2 million as of June 6, 2022 adjusted for working capital, net of debt of $7.3 million as of March 31, 2022. US$ market cap of $207.2 million is based on C$ share price (TSXV) and 33,942,74
Slide 27: Appendix: Additional Technical Materials
Appendix Additional Technical Materials | TSXV: ALV, OTCQX: ALVOF
Slide 28: 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: