Alvopetro Announces Q2 2025 Financial Results and an Operational Update

Executive Summary

• Alvopetro Energy Ltd. reported Q2 2025 financial results, posting a net income of $6.8 million ($0.18 per share) and funds flow from operations of $10.4 million, driven by a 50% year-over-year increase in sales volumes.
• The company provided an operational update highlighting strong performance in Brazil and the commencement of oil sales in Western Canada, alongside details on upcoming drilling and completion activities for the Murucututu and Caburé fields.
• A natural gas price adjustment was announced effective August 1, 2025, lowering the realized price to $10.27/Mcf, while capital expenditures for the quarter totaled $9.0 million.

Key Details

• Financial Performance (Q2 2025):
  • Net Income: $6.83 million ($0.18 basic/diluted per share), up 191% from Q2 2024.
  • Funds Flow from Operations: $10.37 million ($0.28 basic / $0.27 diluted per share), up 31% from Q2 2024.
  • Cash Flows from Operating Activities: $10.47 million.
  • Revenue: Natural gas, oil, and condensate sales reached $14.01 million, a 31% increase from Q2 2024.
  • Dividends Declared: $3,660 thousand ($0.10 per share).
• Operational Metrics:
  • Average Daily Sales Volumes: 2,436 boepd (up 50% from Q2 2024).
  • Brazil Volumes: 2,298 boepd (Natural gas: 13,002 Mcfpd; NGLs: 128 bopd; Oil: 3 bopd).
  • Canada Volumes: 138 bopd (Oil sales commenced in April 2025).
  • Average Realized Price: $63.20/boe (down 12% from Q2 2024).
  • Operating Netback: $54.72/boe (down from $64.30/boe in Q2 2024).
• Pricing Update:
  • Effective August 1, 2025, the natural gas price under the long-term sales agreement was adjusted to BRL 1.90/m3.
  • Expected realized price: $10.27/Mcf (net of taxes), a 3% decrease from Q2 2025's $10.62/Mcf.
• Development Activities:
  • Brazil (Murucututu): The 183-D4 well was drilled to 3,072m TD, encountering 61m TVD of potential natural gas pay. The well is completed in seven intervals and expected on production in Q3 2025. Estimated H2 2025 capital expenditure: $3.3 million.
  • Brazil (Caburé Unit): Three wells (1.7 net) drilled in Q2; fourth well (0.6 net) expected in Q3. Alvopetro’s share of H2 2025 unit development costs anticipated at $5.5 million.
  • Western Canada: Land position expanded to 17,780 gross acres. Two multi-lateral wells (1.0 net) drilled in July with >19km open hole reservoir contact; expected on production in Q3. Next two wells planned for later in the year.
• Balance Sheet & Capital:
  • Capital Expenditures: $8.99 million (including 183-D4 drilling and Caburé unit development).
  • Cash and Cash Equivalents: $15.0 million.
  • Net Working Capital: $6.84 million (down $2.9 million from March 31, 2025).

Notable Quotes

• Corey C. Ruttan, President & CEO: "Q2 included our first quarter of sales from our recently added Western Canadian assets and overall sales volumes continued to be very strong averaging 2,436 boepd, up 50% from Q2 2024... We have a considerable amount of activity underway and we are looking forward to an exciting Q3 with the completion and tie-in of our 183-D4 well, our Caburé Unit development wells, and our two most recently drilled multi-lateral wells in Western Saskatchewan."