Alvopetro Announces January 2025 Sales Volumes, Quarterly Natural Gas Pricing, an Operational Update and a Strategic Entry into the Western Canadian Sedimentary Basin

Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces January 2025 sales volumes of 2,457 boepd, including natural gas sales of 13.8 MMcfpd, associated natural gas liquids sales from condensate of 141 bopd and oil sales of 18 bopd, based on field estimates. This represents a 41% increase from Q4 2024.

Natural gas, NGLs and crude oil sales:	January 2025	December 2024	Q4 2024
Natural gas (Mcfpd), by field:
Caburé	11,450	7,565	7,474
Murucututu	2,338	2,687	2,233
Total Company natural gas (Mcfpd)	13,788	10,252	9,707
NGLs (bopd)	141	110	109
Oil (bopd)	18	9	11
Total Company (boepd)	2,457	1,828	1,738

Quarterly Natural Gas Price Update

As announced on December 17, 2024 , our updated long-term gas sales agreement came into effect on January 1, 2025 increasing Alvopetro's contracted firm volumes starting January 1, 2025 by 33% up to 400 e ³ m ³ /d. The updated natural gas pricing model is recalculated quarterly based on Brent oil equivalent prices and Henry Hub natural gas prices resulting in quicker adjustments for commodity price and foreign exchange rate fluctuations. Effective February 1, 2025 , our natural gas price under our long-term gas sales agreement with Bahiagás has been adjusted to BRL1.95 /m ³ , a 6.5% increase from the January 2025 price of BRL1.83 and consistent with the Q4 2024 price of BRL1.94 /m ³ . All natural gas sales from February 1, 2025 to April 30, 2025 will be sold at BRL1.95 /m ³ ( $10.55 /Mcf, based on average heat content to date, the January 31, 2025 BRL/USD exchange rate of 5.83, net of expected sales taxes applicable).

Operational Update

In the fourth quarter we attempted an optimization project on our 183-B1 well on Block 183 which was originally drilled and tested in 2022. The plan included sidetracking from the existing wellbore and re-entering the Sergi Formation horizontally. Unfortunately, we encountered challenges during the project that resulted in the loss of the bottom hole assembly and the abandonment of the operation with costs totalling approximately $4.0 million .

On our Murucututu field, based off the successful recompletion of our 183-A3 well in the third quarter we plan to spud 183-D4 location this week. The 183-D4 location is targeting the Caruaçu Member approximately 110 metres up-dip of the 183-A3 location. This location also has an uphole exploratory target in the Marfin Formation. We expect to announce results from the 183-D4 well near the end of the first quarter.

Following this Murucututu well, we plan to drill and complete five development wells at our Caburé Unit as part of the agreed development plan with our partner. During the month of January, we also completed the commissioning phase of our recently installed compression system at Caburé increasing our productive capacity from the Unit.

Strategic Entry into Western Canadian Growth Opportunity

Alvopetro has been pursuing additional growth opportunities to complement our existing asset base to continue our disciplined capital allocation model where we look to reinvest approximately half our cash flow into organic growth and return the other half to stakeholders. The Western Canadian Sedimentary Basin (" WCSB ") offers high-quality assets with large resources in place with access to a high-quality service industry, and leading-edge technology deployment. With our past experiences and our headquarters in Calgary , we are well positioned to create a complementary growth platform with the opportunity to deliver attractive returns for shareholders.

Initial Focus Area - Mannville Heavy Oil Fairway

The Mannville multi-zone heavy oil fairway targets the Colony, McLaren, Waseca , Sparky, GP, Rex, Lloydminster , and Cummings formations containing a large amount of original oil in place and providing attractive economics through the application of multilateral drilling and other technologies.

Farmin – Partner with Proven Track Record

Alvopetro is partnering with Durham Creek Energy Ltd., an established operator with a proven track record. Alvopetro has agreed to fund 100% of two earning wells at an estimated total cost of C$4.5 million in exchange for a 50% working interest in 19.13 sections (12,243 acres) of land in western Saskatchewan . With success, the land position could support upwards of 100 development drilling locations.

President & CEO, Corey C. Ruttan commented:

"Alvopetro's strong financial position and cash flows from operations help position the Company to maximize shareholder returns from our combined asset base. With exposure to projects in Brazil and now also in Canada , it allows us to allocate capital across a growing inventory of high rate of return opportunities and to continue our disciplined capital allocation model."

Corporate Presentation

Alvopetro's updated corporate presentation is available on our website at:
http://www.alvopetro.com/corporate-presentation .

Social Media

Follow Alvopetro on our social media channels at the following links:
Twitter - https://x.com/AlvopetroEnergy
Instagram - https://www.instagram.com/alvopetro/
LinkedIn - https://www.linkedin.com/company/alvopetro-energy-ltd
YouTube - https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.

Abbreviations:

boepd	=	barrels of oil equivalent ("boe") per day
bopd	=	barrels of oil and/or natural gas liquids (condensate) per day
C$	=	Canadian dollar
e ³ m ³ /d	=	thousand cubic metre per day
m ³	=	cubic metre
m ³ /d	⁼	cubic metre per day
Mcf	=	thousand cubic feet
Mcfpd	=	thousand cubic feet per day
MMcfpd	=	million cubic feet per day
NGLs	=	natural gas liquids

BOE Disclosure . The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

Contracted firm volumes . The 2025 contracted daily firm natural gas volumes of 400 e ³ m ³ /d (before any provisions for take or pay allowances) represents contracted volumes based on contract referenced natural gas heating value. Note that Alvopetro's reported natural gas sales volumes are prior to any adjustments for heating value of Alvopetro natural gas. Alvopetro's natural gas is approximately 7.8% higher than the contract reference heating value. Therefore, to satisfy the contractual firm deliveries Alvopetro would be required to deliver approximately 371e ³ m ³ /d (13.1MMcfpd).

Forward-Looking Statements and Cautionary Language. This news release contains "forward-looking information" within the meaning of applicable securities laws. The use of any of the words "will", "expect", "intend" and other similar words or expressions are intended to identify forward-looking information. Forward‐looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning future production and sales volumes, the expected natural gas price and expected sales volumes under the Company's long-term gas sales agreement, and future capital plans and potential development opportunities associated with the WCSB farmin. Current and forecasted natural gas nominations are subject to change on a daily basis and such changes may be material. Forward -looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, expectations and assumptions concerning forecasted demand for oil and natural gas, the success of future drilling, completion, testing, recompletion and development activities and the timing of such activities, the performance of producing wells and reservoirs, well development and operating performance, expectations regarding Alvopetro's working interest and the outcome of any redeterminations, the outcome of any disputes, the timing of regulatory licenses and approvals, equipment availability, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, foreign exchange rates, general economic and business conditions, the impact of global pandemics, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations . The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro's SEDAR+ profile at www.sedarplus.ca . The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

www.alvopetro.com
TSX-V: ALV, OTCQX: ALVOF

SOURCE Alvopetro Energy Ltd.

View original content: http://www.newswire.ca/en/releases/archive/February2025/05/c0962.html

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Alvopetro Energy

Integrated natural gas and energy growth platform in Brazil and Canada

Integrated natural gas and energy growth platform in Brazil and Canada Keep Reading...

Investor Insight

Alvopetro Energy is building a diversified energy growth platform anchored by its high-margin integrated natural gas business in Brazil and an expanding heavy oil position in Western Canada. Supported by strategic infrastructure, premium-linked gas pricing and disciplined capital allocation, the company combines production growth, strong cash flow generation and shareholder returns.

Overview

Alvopetro Energy ( (TSXV:ALV;OTCQX:ALVOF) is an independent energy company focused on developing high-value natural gas assets in Brazil while expanding into complementary heavy oil opportunities in Western Canada. The company has established a differentiated business model through the integration of upstream production, owned infrastructure and long-term gas sales agreements, positioning it as a leading participant in Brazil’s emerging onshore natural gas market.

Map of Brazil and Canada showing Alvopetro Energy projects

Alvopetro’s core operations are located in the Recôncavo Basin in the state of Bahia, one of Brazil’s most established hydrocarbon-producing regions. The area benefits from attractive fiscal terms, low royalty rates and proximity to major industrial demand centers. Through its long-term gas sales agreement with Bahiagás, the company receives pricing linked to Brent oil and Henry Hub natural gas benchmarks, supporting premium realized natural gas pricing and stable cash flow generation.

The company has delivered strong operating and financial performance since commencing production in 2020. In Q1 2026, Alvopetro generated $17.4 million in revenue and $12.5 million in funds flow from operations while maintaining an operating netback margin of 84 percent. Its disciplined capital allocation model balances reinvestment into growth projects with direct shareholder returns through dividends, debt reduction and share repurchases.

Map showing Alvopetro Energy's pipelines, fields, and facilities in Brazil with labels like Bahia Gas City Gate and Murucututu Project.

Alvopetro is also advancing a Western Canadian heavy oil growth platform targeting the Mannville Stack fairway across Saskatchewan and Alberta. The company is applying open-hole multilateral drilling technology to improve drilling efficiencies and project economics across a large inventory of development opportunities. Backed by an experienced management team with extensive international operational expertise, Alvopetro is positioned for long-term production and cash flow growth across both Brazil and Canada.

Company Highlights

Integrated Brazilian Gas Platform: Alvopetro is Brazil’s first integrated onshore natural gas producer, combining upstream production, owned midstream infrastructure and long-term gas commercialization.
Strong Financial Performance: Q1 2026 production averaged 3,128 boepd, generating $17.4 million in revenue and $12.5 million in funds flow from operations.
High-Margin Operations: The company achieved a Q1 2026 operating netback of $52.12/boe and an operating netback margin of 84 percent.
Large Reserve and Resource Base: Alvopetro reported 2P reserves of 13.1 MMboe with a before-tax NPV10 of $393.6 million and after-tax NPV10 of $312.4 million.
Premium Gas Pricing Exposure: Natural gas pricing under the company’s long-term sales agreement is linked to Brent and Henry Hub benchmarks, supporting premium realized pricing. Forecasted natural gas prices of over $11/Mcf, increasing to over $13/Mcf in August 2026.
Strategic Infrastructure Ownership: Alvopetro owns an 11-kilometre transfer pipeline and the UPGN gas processing facility with capacity exceeding 18 MMcfpd.
Canadian Growth Platform: The company holds a 50 percent interest in 101 sections (32,273 net acres) in the Mannville Stack heavy oil fairway with over 100 Tier 1 drilling locations identified.
Disciplined Shareholder Returns: Since July 2020, 47 percent of funds flow from operations has been returned to stakeholders through dividends, debt reduction and share repurchases.

Key Projects

Caburé Gas Field

Map showing pipelines with highlighted fields and pathways.at Alvopetro Energy's Cabure field

Caburé is Alvopetro’s flagship natural gas asset and historically the company’s largest producing field. The project is a joint development across four blocks, with Alvopetro holding a 56.2 percent working interest following the 2024 redetermination process. The unitized development currently includes 12 wells and associated production infrastructure.

Gross field production capacity at Caburé has increased by 33 percent to 21.2 MMcfpd (600 e3m3/d), supported by ongoing development drilling and infrastructure expansion. Four additional wells were drilled in 2025, and the 2026 development program includes plan to sidetrack the CBEL-1D well.

Caburé is strategically connected to Alvopetro’s owned transfer pipeline and UPGN gas processing facility, enabling efficient gas processing and commercialization. The field generates premium-priced natural gas sales under the company’s long-term agreement with Bahiagás, supporting stable cash flow and high operating margins.

Murucututu Gas Project

A map showing the boundary for Alvopetro Energy's Murucututu with existing Pipeline, Existing PAD, Existing Well, Future Pipeline, Future PAD, Future Well, Murucututu.

Murucututu is a 100 percent-owned Alvopetro natural gas asset located immediately north of Caburé and represents the company’s primary organic growth platform in Brazil. Independent evaluators assigned the project 2P reserves of 8.9 MMboe, risked best estimate contingent resources of 3.8 MMboe and risked best estimate prospective resources of 12.1 MMboe as of December 31, 2025.

The project continues to demonstrate strong development potential through successful drilling results. Following the success of the 183-A3 and 183-D4 wells, Alvopetro is currently drilling the 183-D1 Caruaçu development well as part of a broader multi-year development strategy targeting the Caruaçu and Gomo formations.

To support future production growth, Alvopetro is expanding Murucututu field infrastructure capacity to 600 e3m3/d (21.2 MMcfpd). Planned upgrades include pipeline looping, expansion of field production facilities and construction of the G-Pad development area to support multiple future drilling locations.

Western Canadian Growth Platform

Alvopetro’s Western Canadian business targets the Mannville Stack heavy oil fairway in Saskatchewan and Alberta. The company holds a 50 percent interest in 101 sections representing 32,273 net acres alongside an experienced operating partner.

The Mannville Stack fairway offers shallow drilling depths, lower geological risk and attractive drilling economics enhanced by open-hole multilateral drilling technology. Alvopetro currently has seven gross wells on production and has identified more than 100 Tier 1 drilling locations across its acreage position.

The company reported Canadian 2P reserves of 735 Mboe with a before-tax NPV10 of C$12.1 million and eight undeveloped drilling locations booked at year-end 2025 (4.0 net to Alvopetro). The Canadian platform complements Alvopetro’s Brazilian gas business by adding long-term production growth and commodity diversification.

Management Team

Corey C. Ruttan - President, CEO and Director

Corey C. Ruttan has over 30 years of oil and gas industry experience and previously served as president and CEO of Petrominerales until its acquisition by Pacific Rubiales Energy in 2013 and also held senior executive positions at Petrobank Energy and Resources. Ruttan brings extensive experience in international oil and gas operations, finance and corporate growth strategy.

Alison Howard - CFO

Alison Howard is a chartered accountant with more than 20 years of experience in taxation, accounting and finance across Canadian and international energy markets. Before joining Alvopetro, she held senior finance and tax roles at Petrominerales and Petrobank Energy and Resources.

Adrian Audet - Vice-president, Asset Management

Adrian Audet has held progressively senior operational roles with Alvopetro since 2013. He has extensive experience overseeing operations in Bahia, Brazil, with a strong focus on operational efficiency, production optimization and cost management.

Nanna Eliuk - Exploration Manager

Nanna Eliuk is a professional geophysicist with more than 23 years of international petroleum exploration and development experience. Her expertise spans conventional and unconventional reservoirs across multiple global basins.

Darcy Reynolds – Western Canada Business Unit Lead

Darcy Reynolds is a professional geoscientist with over 20 years of subsurface and asset evaluation experience across Western Canada. He has a strong track record in leading large-scale drilling programs, driving acquisitions and divestitures, providing subsurface technical assurance, and shaping strategic decision-making.

Frederico Oliveira - Brazil Country Manager

Frederico Oliveira has held senior leadership roles with Alvopetro since 2008, overseeing operations, regulations, partnerships and strategic execution in Brazil. His background includes operational efficiency improvements, project implementation and corporate management.