Alvopetro Energy Ltd. · TSXV:ALV
Alvopetro Energy — Investor Presentation (September 2023)
27 slides from Alvopetro Energy's investor presentation, Sep 14, 2023
Slide 1: Corporate Presentation September 2023
Corporate Presentation September 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) 36.6 million 800 Average daily trading volume(1) US$ millions 78,395 600 Insider ownership(1) 10.5% Current Enterprise Value 400 Market cap/Enterprise value(2) $258 million/
Slide 4: Focused on Delivering Shareholder Returns
Focused on Delivering Shareholder Returns 197(1) well on production 10.00 +17% quarterly dividend ($0.14/share) 9.00 +50% quarterly dividend ($0.12/share) +17% 2P reserves value (NPV10BT) 8.00 Credit Facility repaid +33% quarterly 7.00 dividend ($0.08/share) CAD$ Share price (TSXV) +52% 2P reserves
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 Murucututu/Gomo Project (100%) • Bahiagás 15-km Distribution pipeline & 70 MMcfpd citygate at our plant site • Price set semi-annually based on Brent, Henry Hub and UK NBP benchmar
Slide 9: Gas Sales Agreement (Futures Pricing Sept 13, 2023)
Gas Sales Agreement (Futures Pricing Sept 13, 2023) As of August 1, 2023 Alvopetro’s contracted natural gas price is at the ceiling and is forecasted to remain at the ceiling until 2026 based on futures pricing effective Sept 13, 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) 2,432 2,501 2,642 2,724 5 2,767 5 2,361 2,459 2 130 2 2 12 2,359 117 128 2,500 5 99 5 2,175 - 105 107 103 97 1,950 1,975 2,018 - 1,852 - 98 5 2,000 1,764 - 89 92 90 8 79 84 1,500 2,350 2,328 2,390 2,523 2,591 2,633 2,077 2,252 2,258 1
Slide 11: Operating Netback
Operating Netback Operating Netback(10)- $/boe Q2 operating netback margin of 90% Operating netback as a % of realized sales price 91% 90% 87% 82% Q2 realized price of $77.41/boe 82% 77.41 80.00 72.92 Including natural gas sales of $12.86/Mcf 1.97 80% 68.04 2.34 5.83 Operating netback - $/boe Operat
Slide 12: Industry-Leading Operating Netback Margins
Industry-Leading Operating Netback Margins Operating Netback Margin %(10) 100% 90% Average netback margin 90% 62% 80% 70% 60% 50% 40% 30% 20% 10% 0% ALV Alvopetro Q2 2023 operating netback margin compared to other selected publicly listed oil and natural gas producers operating in Latin America, Can
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 June 30, 2023 16,000 14,972 13,348 Share Building cash 13,193 11,047 repurchases and working 12,434 1% capital 12,000 10,904 1
Slide 14: 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 15: Bom Lugar Oil Development Drilling Result (BL-6 100% ALV)
Bom Lugar Oil Development Drilling Result(12) (BL-6 100% ALV) 391m Net Pay map 2 m C.I. BL-4 BL-6 BL-3 BL-5 BL-1 BL-7 BL-2 • BL-6 well (35m net pay) step out drilled up dip and directionally 391m from BL-1 well (20m net pay) • BL-6 well encountered a total of 35.4 metres TVD of potential net oil pay
Slide 16: 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 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 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) • Higher heating value 1.22 MMBtu/Mcf • Capex: $5.8 million • F&D: $6.50/boe* • First
Slide 21: Murucututu Multi-Year Development Plan
Murucututu Multi-Year Development Plan • Reserves: 2 existing wells + 4 undeveloped locations (183-A3, 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-A3 197-A3 | TSXV: ALV, OT
Slide 22: 2023 Voluntary Social Investment Plan
2023 Voluntary Social Investment Plan | TSXV: ALV, OTCQX: ALVOF 22
Slide 23: Why Invest?
Why Invest? Results Growth Value Yield | TSXV: ALV, OTCQX: ALVOF 23
Slide 24: 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 25: 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 26: 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 27: Endnotes
Endnotes 1. As of September 14, 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 March 15, 2023 and ending on September 6, 2023. 2. Enterprise value of $240.3 million is computed
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