Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (November 2022)
30 slides from Alvopetro Energy's investor presentation, November 2022
Slide 1: Corporation Presentation November 2022
Corporation Presentation November 2022 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 & Risked Best Estimate Resources, NPV10 before Shares outstanding(1) 36.2 million 700 tax (4)(8)(9)(12) 600 Average daily trading volume(1) 49,303 500 US$ millions Insider ownership(1) 10.4% 400 2PNPV10BT US$297MM 300 Market cap/Enterprise v
Slide 4: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns Credit Facility repaid 182-C2 8.00 Unit C Well discovery Discovery 7.50 183-B1 discovery 7.00 +33% quarterly dividend ($0.08/share) 6.50 6.00 +52% 2P reserves value 5.50 (NPV10BT) First quarterly CAD$ Share price (TSXV) 5.00 dividend declared ($0.06/share) 4
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 att
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 • Unitized area development - 8 wells and all production facilities (100%) • 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: Production Results Well Ahead of Pre-Commercialization Expectations
Production Results Well Ahead of Pre-Commercialization Expectations Alvopetro - Daily sales volumes (boepd) 2,642 2,720 2,459 2,432 2,501 2 - 2,361 2 2 12 2,359 117 124 2,500 2,175 5 107 99 5 - 105 103 97 1,950 - 98 2,000 1,764 - 89 79 1,500 2,390 2,523 2,595 2,252 2,350 2,328 2,258 1,000 1,860 2,07
Slide 10: Operating Netback
Operating Netback Operating Netback(11)- $/boe 87% 87% Operating Netback Margin(11) (% of Sales Price) 85% 83% 83% 82% 80.00 79% 80% 73.54 80% 70.00 5.35 Operating netback - $/boe 62.08 4.23 60.00 4.35 3.79 60% 50.00 44.04 44.22 35.45 38.08 4.02 4.22 40.00 32.79 32.82 3.64 3.62 2.82 40% 2.81 1.51 3.
Slide 11: Industry-Leading Operating Netback Margins
Industry-Leading Operating Netback Margins Operating Netback Margin %(11) Q2 2022 100% 87% Average netback margin 90% 69% 80% 70% 60% 50% 40% 30% 20% 10% 0% ALV Alvopetro Q2 2022 operating netback margin compared to other selected publicly listed oil and gas producers operating in Latin America or C
Slide 12: Disciplined Capital Allocation – Balancing Organic Growth & Returns
Disciplined Capital Allocation – Balancing Organic Growth & Returns Funds Flow From Operations(11) & Capital Allocation 12,434 12,000 10,904 2,728 7,930 8,000 5,471 US$000's 6,480 2,602 2,715 4,756 4,252 3,610 1,643 4,000 5,786 2,023 6,338 2,854 2,034 371 1,153 163 3,800 321 918 1,261 1,470 918 1,26
Slide 13: ESG – 2021 Highlights
ESG – 2021 Highlights | TSXV: ALV, OTCQX: ALVOF 13
Slide 14: Social Investment - Music & Arts Conservatory
Social Investment - Music & Arts Conservatory Fostering artistic talent and bringing kids back to school Free after-school music lessons Commenced February 2022 for local youth aged 7 to 21 80 hours of workshops Marching Band 31 Girls 29 Boys Philarmonica 16 Girls 37 Boys 3 Teachers 1 Educational Ps
Slide 15: Social Investment - Sow & Grow Project
Social Investment - Sow & Grow Project Promoting sustainable farming practices in our region “In the Summer water becomes 10 scarce here. This water treatment Greywater treatment and reuse process is very systems installed important for people who live off the land.“ 60% Mrs. Osnete Souza of househo
Slide 16: 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 to 18+ MMcfpd completed in July MURS-1
Slide 17: 2022 Exploration Drilling Program (100% ALV)
2022 Exploration Drilling Program (100% ALV) Miranga Exploration well: 183-B1 Sergi gas & oil samples Tie Murucututu/Gomo project Fazenda Belem ALV 183-B1 (100%) confirmed at 42-degree API Agua Grande ALV 183-B1 Biriba ALV 182-C1 ALV 183-1 Alvopetro Pipeline Exploration well: ALV 197-1 Sussuarana AL
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 Risked Resources – Value & Growth
Reserves and Risked Resources – Value & Growth Reserves & Risked Resources (MMboe) (4)(8)(9)(12) Reserves & Risked Best Estimate Resources, NPV10 40 before tax (4)(8)(9)(12) 700 600 30 500 MMboe US$ millions 400 20 2PNPV10BT Risked upside US$297MM 300 Current Enterprise value 200 (US$155MM) 10 100 C
Slide 20: Longer-Term Vision
Longer-Term Vision 6,000 5,000 4,000 Growth BOEPD 3,000 2,000 Base 1,000 - 2021 2022 2023 2024 2025 2026 Year | TSXV: ALV, OTCQX: ALVOF 20
Slide 21: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 21
Slide 22: 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 23: 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 24: Endnotes
Endnotes 1. As of November 4, 2022. Average daily trading volume is based on average volumes traded to date in 2022 on all Canadian exchanges (TSXV and other Canadian) and on the OTCQX from January 1, 2022 to November 4, 2022. 2. Enterprise value of $154.8 million is computed as US$ market cap of $1
Slide 25: Appendix Additional Technical Materials
Appendix Additional Technical Materials | TSXV: ALV, OTCQX: ALVOF
Slide 26: ALV-182-C2 Drilling Results – Agua Grande Formation (100% ALV)
ALV-182-C2 Drilling Results – Agua Grande Formation (100% ALV) • 182-C2 well encountered the Agua Grande Formation at 2,607 metres TVD with a 12.8 metre thick gross Agua Grande Formation. • Based on open-hole logs, the well encountered 10.9 metres of potential net pay in the Agua Grande Formation wi
Slide 27: ALV-183-B1 Discovery – Three Hydrocarbon Charged Zones Discovered
ALV-183-B1 Discovery(13) – Three Hydrocarbon Charged Zones Discovered Sergi, Agua Grande and Candeias Formations (100% ALV) Well: 1-ALV-183-B1-BA COMPANY: ALVOPETRO VERTICAL SCALE: 1:500 DATE LOGGED: ELEVATION MEAS. REF.: 5.85 DRILLED DEPTH: 1983.50 GAMMA Porosity Resistivity HC Indicator LITHOLOGY
Slide 28: ALV-182-C2 – Sergi Formation (100% ALV)
ALV-182-C2– Sergi Formation (100% ALV) Miranga GAMMA Porosity Tie Fazenda Belem • The 182-C2 well encountered a 223.7 0 PEFZ_1 B/E 10 RHOZ_1 metre thick section in the Sergi 1907.5 K/M3 2897.5 Agua Grande TOPS TVD METRES 0.45 NPHI_SAN_1 V/V -0.15 Biriba Formation with 121.3 metres of sand 0 GR_CAL_1
Slide 29: 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 30: 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:
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