Alvopetro Energy boosts sales in early 2025 following updated gas agreement
Last updated: 10:50 19 Mar 2025 EDT, First published: 08:43 19 Mar 2025 EDT
Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) announced that it achieved annual sales volumes averaging 1,794 barrels of oil equivalent per day (boepd) in 2024, generating net income of $16.3 million.
The company generated funds flow from operations of $33.3 million or $0.89 per share in 2024.
Building on this performance, Alvopetro reported a 37% increase in average daily sales for January and February 2025, reaching 2,375 boepd.
This growth followed an updated gas sales agreement that increased contracted firm reference volumes by 33% starting on January 1.
Starting February 1, Alvopetro's natural gas price under its long-term agreement with Bahiagás was adjusted to BRL1.95/m3, reflecting a 7% increase from the January rate and in line with the Q4 2024 price.
"Through 2024 we increased our productive capacity both at the Caburé Unit and on our 100% interest Murucututu project,” Alvopetro CEO Corey Ruttan said in a statement.
“This allowed us to increase our firm natural gas sales volumes for 2025 resulting in a strong start to the year with a 37% increase in our sales volumes.”
With the updated gas sales agreement in effect and higher production forecasted for Q1 2025, Alvopetro's Board approved a quarterly dividend of US$0.10 per share, which CEO Ruttan told shareholders was "consistent with our long-standing commitment to a more disciplined capital allocation model."
Shares of Alvopetro gained 4.6% in Wednesday morning trading.
Operational update
Alvopetro highlighted that in Western Saskatchewan it has successfully drilled two earning wells under a recent farm-in agreement.
The company funded the drilling in exchange for a 50% non-operated working interest in 12,243 acres of land.
Both wells are now being completed and are expected to be on production within 30 days. Total costs for these wells are estimated at C$4 million (US$2.8 million).
At the Murucututu natural gas field, Alvopetro has started drilling the first of two planned development wells for 2025.
Meanwhile, in the Caburé natural gas field's unitized area, five development wells are scheduled this year, with the first expected to drilled in April.
Reserve assessment
Per an indepent reserve assessment and evaluation, Alvopetro's reserves have shown significant growth. Proven reserves (1P reserves) have increased 65% to 4.5 million barrels of oil equivalent (MMboe), driving a 1P production replacement ratio of 372%.
This growth stemmed from a working interest redetermination at the Caburé field and added reserves in the Murucututu field's Caruaçu Formation.
Proven and probable reserves (2P reserves) increased by 5% to 9.1 MMboe, reflecting a 2P production replacement ratio of 167%.