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Alvopetro Energy Ltd. (TSXV: ALV,OTC:ALVOF) (OTCQX: ALVOF) ("Alvopetro" or the "Company") announces an operational update, our financial results for the three months ended March 31, 2026, and details for both our Q1 2026 earnings call and our upcoming annual general and special meeting.
All references herein to $ refer to United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.
President & CEO, Corey C. Ruttan commented:
"We delivered a strong start to 2026 with another record of quarterly sales at 3,128 boepd, driving funds flow from operations of $12.5 million. This performance underscores the quality of our asset base and our ability to fund organic growth while continuing to return significant capital to our shareholders."
Recent Updates
Quarterly Natural Gas Pricing Update
Effective May 1, 2026, our natural gas price under our long-term gas sales agreement was adjusted to BRL1.91/m3 on the first 400e3m3/d (14.1 MMcfpd) reference volumes ("QDC1") with the incremental 100 e3m3/d (3.5 MMcfpd) reference volumes ("QDC2") adjusted to BRL1.61/m3. This represents increases of 3% and 21% respectively for QDC1 and QDC2 relative to the February 1, 2026 price reset.
Based on our average heat content to-date and the April 30, 2026 BRL/USD exchange rate of 5.00, our weighted average realized price (QDC1 + QDC2) on firm natural gas sales during the May 1, 2026 to July 31, 2026 period is expected to be $11.31/Mcf, an increase of 12% over our Q1 2026 realized price of $10.14/Mcf. Based on the BRL/USD exchange rate of 5.00 and forecast Q2 2026 Brent and Henry Hub benchmark prices using closing futures prices on April 30 2026, our expected realized weighted average realized price for the August 1, 2026 – October 31, 2026 reset period is forecasted to be $13.06/Mcf. Amounts ultimately received in equivalent USD will be impacted exchange rates and actual benchmark pricing in effect during the relevant period.
April Sales Volumes
April sales volumes averaged 3,133 boepd (based on field estimates). In Brazil, April sales volumes averaged 2,953 boepd including natural gas sales of 16.7 MMcfpd, associated natural gas liquids sales from condensate of 155 bopd and oil sales of 9 bopd. In Canada, April sales volumes averaged 180 bopd.
Binding Arbitration Decision
On April 27, 2026, Alvopetro received the final order (the "Final Order") of the arbitral tribunal of the arbitral tribunal (the "Tribunal") pursuant to which the Tribunal found in favour of Alvopetro, maintaining Alvopetro's 56.2% working interest in the unitized area which includes Alvopetro's Caburé natural gas field.
Brazil Operational Update
We have now commenced drilling our 183-D1 well on our 100% Murucututu field targeting the Caruaçu Formation. We have also received the necessary environmental permits and have started construction for a new drilling pad to support future Caruaçu development updip of the successful 183-D4 well.
Canada Operational Update
In Canada, we completed drilling two (1.0 net) additional wells in the quarter. We now have seven (3.5 net) wells on production averaging 193 bopd in the quarter. We are working with our partner to finalize the timing of our next phase of drilling.
Financial and Operating Highlights – First Quarter of 2026
- Alvopetro and Bahiagás agreed to amend our long-term gas sales agreement to increase Alvopetro's firm gas sales by 25% to 500 e3m3/d (17.7 MMcfpd) for 2026 and 2027. With higher firm contracted volumes, average daily sales in Brazil in Q1 2026 increased to 2,935 boepd(1) (+20% from Q1 2025 and +8% from Q4 2025). In Canada, daily sales averaged 193 bopd(1) (+30% from Q4 2025). Overall, total daily sales averaged 3,128 boepd (+28% compared to Q1 2025 and +9% compared to Q4 2025), setting a new quarterly sales record.
- Our average realized natural gas price was $10.14/Mcf (-3% from Q1 2025 and +2% from Q4 2025). Our overall average realized sales price per boe was $61.77/boe (-3% from Q1 2025 and +3% from Q4 2025).
- Our natural gas, oil and condensate revenue increased to $17.4 million (+24% from Q1 2025 and +10% from Q4 2025) due to higher sales volumes.
- Our operating netback(2) in the quarter was $52.12 per boe, an increase of $1.35 per boe compared to Q1 2025 and $2.42 per boe compared to Q4 2025.
- We generated funds flows from operations(2) of $12.5 million ($0.33 per basic and diluted share), an increase of $3.3 million compared to Q1 2025 and $1.9 million compared to Q4 2025.
- We reported net income of $8.1 million ($0.22 per basic share and $0.21 per diluted share), an increase of $2.0 million compared to Q1 2025 and $2.5 million compared to Q4 2025.
- Capital expenditures in Q1 2026 of $5.1 million included the cost to drill and complete two (1.0 net) wells in Saskatchewan, costs to recomplete the 183-1 well on Alvopetro's 100% Murucututu field as well as initial costs for upcoming drilling and facilities projects in Brazil.
- Our working capital(2) was $16.9 million as of March 31, 2026 and our working capital, net of debt was $4.9 million.
(1) | Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. |
(2) | See "Non-GAAP and Other Financial Measures" section within this news release. |
The following table provides a summary of Alvopetro's financial and operating results for the periods noted. The consolidated financial statements with the Management's Discussion and Analysis ("MD&A") are available on our website at www.alvopetro.com and will be available on the SEDAR+ website at www.sedarplus.ca.
| As at and Three Months Ended March 31, | ||||||
2026 | 2025 | Change (%) | ||||
Financial | ||||||
($000s, except where noted) | ||||||
Natural gas, oil and condensate sales | 17,392 | 14,013 | 24 | |||
Net income | 8,059 | 6,070 | 33 | |||
Per share – basic ($)(1) | 0.22 | 0.16 | 38 | |||
Per share – diluted ($)(1) | 0.21 | 0.16 | 31 | |||
Cash flows from operating activities | 10,717 | 8,817 | 22 | |||
Per share – basic ($)(1) | 0.29 | 0.24 | 21 | |||
Per share – diluted ($)(1) | 0.28 | 0.23 | 22 | |||
Funds flow from operations(2) | 12,505 | 9,222 | 36 | |||
Per share – basic ($)(1) | 0.33 | 0.25 | 32 | |||
Per share – diluted ($)(1) | 0.33 | 0.24 | 38 | |||
Dividends declared | 4,408 | 3,643 | 21 | |||
Per share(1) | 0.12 | 0.10 | 20 | |||
Capital expenditures | 5,149 | 8,375 | (39) | |||
Cash and cash equivalents | 32,450 | 17,264 | 88 | |||
Working capital(2) | 16,896 | 9,742 | 73 | |||
Working capital, net of debt(2) | 4,896 | 9,742 | (50) | |||
Weighted average shares outstanding | ||||||
Basic (000s)(1) | 37,419 | 37,312 | - | |||
Diluted (000s)(1) | 38,050 | 37,752 | 1 | |||
Operations | ||||||
Average daily sales volumes(3): | ||||||
Brazil: | ||||||
Natural gas (Mcfpd), by field: | ||||||
Caburé (Mcfpd) | 11,691 | 11,710 | - | |||
Murucututu (Mcfpd) | 4,798 | 2,093 | 129 | |||
Total natural gas (Mcfpd) | 16,489 | 13,803 | 19 | |||
NGLs – condensate (bopd) | 175 | 135 | 30 | |||
Oil (bopd) | 12 | 10 | 20 | |||
Total (boepd) - Brazil | 2,935 | 2,446 | 20 | |||
Canada: | ||||||
Oil (bopd) - Canada | 193 | - | - | |||
Total Company (boepd) | 3,128 | 2,446 | 28 | |||
Average realized prices(2): | ||||||
Natural gas ($/Mcf) | 10.14 | 10.44 | (3) | |||
NGLs – condensate ($/bbl) | 82.63 | 81.05 | 2 | |||
Oil ($/bbl) | 56.24 | 64.96 | (13) | |||
Total ($/boe) | 61.77 | 63.67 | (3) | |||
Operating netback ($/boe)(2) | ||||||
Realized sales price | 61.77 | 63.67 | (3) | |||
Royalties | (4.19) | (7.60) | (45) | |||
Production expenses | (5.25) | (5.30) | (1) | |||
Transportation expenses | (0.21) | - | - | |||
Operating netback | 52.12 | 50.77 | 3 | |||
Operating netback margin(2) | 84 % | 80 % | 5 | |||
Notes: | |
(1) | Per share amounts are based on weighted average shares outstanding other than dividends per share, which is based on the number of common shares outstanding at each dividend record date. The weighted average number of diluted common shares outstanding in the computation of funds flow from operations and cash flows from operating activities per share is the same as for net income per share. |
(2) | See "Non-GAAP and Other Financial Measures" section within this news release. |
(3) | Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. |
Q1 2026 Results Webcast
Alvopetro will host a live webcast to discuss our Q1 2026 financial results at 9:00 am Mountain time on Friday May 8, 2026. Details for joining the event are as follows:
DATE: May 8, 2026
TIME: 9:00 AM Mountain/11:00 AM Eastern
LINK: https://us06web.zoom.us/j/82243023429
DIAL-IN NUMBERS: https://us06web.zoom.us/u/kMiGDfdH1
WEBINAR ID: 822 4302 3429
The webcast will include a question-and-answer period. Online participants will be able to ask questions through the Zoom portal. Dial-in participants can email questions directly to socialmedia@alvopetro.com.
Annual General Meeting
Alvopetro's annual general and special meeting (the "Meeting") will be held on Tuesday, June 9, 2026 at the offices of Torys LLP (Suite 4600, 525 8th SW, Calgary, Alberta) beginning at 9:30 a.m. Mountain time. The management information circular and all related materials are available on our website and www.sedarplus.ca.
All interested parties are invited to attend the Meeting. We will also be broadcasting the meeting via live webcast for the interest of all shareholders. Please be advised that shareholders will not be able to vote any shares through this webcast format. Details for joining the event are as follows:
DATE: June 9, 2026
TIME: 9:30 AM Mountain/11:30 AM Eastern
LINK: https://us06web.zoom.us/j/86716593981
DIAL-IN NUMBERS: https://us06web.zoom.us/u/knxDPPeb8
WEBINAR ID: 867 1659 3981
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:
X - https://x.com/AlvopetroEnergy
Instagram - https://www.instagram.com/alvopetro/
LinkedIn - https://www.linkedin.com/company/alvopetro-energy-ltd
Alvopetro Energy Ltd. is deploying a balanced capital allocation model where we seek to reinvest roughly half our cash flows into organic growth opportunities and return the other half to stakeholders. Alvopetro's organic growth strategy is to focus on the best combinations of geologic prospectivity and fiscal regime. Alvopetro is balancing capital investment opportunities in Canada and Brazil where we are building off the strength of our Caburé and Murucututu natural gas fields and the related strategic midstream infrastructure.
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.
Abbreviations:
$ or USD | = | United States dollars |
$000s | = | thousands of USD |
boepd | = | barrels of oil equivalent ("boe") per day |
bopd | = | barrels of oil and/or natural gas liquids (condensate) per day |
BRL | = | Brazilian Real |
e3m3/d | = | thousand cubic metre per day |
m3 | = | cubic metre |
m3/d | = | cubic metre per day |
Mcf | = | thousand cubic feet |
Mcfpd | = | thousand cubic feet per day |
MMcf | = | million cubic feet |
MMcfpd | = | million cubic feet per day |
NGLs | = | natural gas liquids (condensate) |
Q1 2025 | = | three months ended March 31, 2025 |
Q1 2026 | = | three months ended March 31, 2026 |
Q4 2025 | = | three months ended December 31, 2025 |
GAAP or IFRS | = | IFRS Accounting Standards |
Non-GAAP and Other Financial Measures
This news release contains references to various non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures as such terms are defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Such measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by IFRS and might not be comparable to similar financial measures disclosed by other issuers. While these measures may be common in the oil and gas industry, the Company's use of these terms may not be comparable to similarly defined measures presented by other companies. The non-GAAP and other financial measures referred to in this news release should not be considered an alternative to, or more meaningful than measures prescribed by IFRS and they are not meant to enhance the Company's reported financial performance or position. These are complementary measures that are used by management in assessing the Company's financial performance, efficiency and liquidity and they may be used by investors or other users of this document for the same purpose. Below is a description of the non-GAAP financial measures, non-GAAP ratios, capital management measures and supplementary financial measures used in this news release. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the "Non-GAAP Measures and Other Financial Measures" section of the Company's MD&A which may be accessed through the SEDAR+ website at www.sedarplus.ca.
Non-GAAP Financial Measures
Operating Netback
Operating netback is calculated as natural gas, oil and condensate revenues less royalties, production expenses, and transportation expenses. This calculation is provided in the "Operating Netback" section of the Company's MD&A using our IFRS measures. The Company's MD&A may be accessed through the SEDAR+ website at www.sedarplus.ca. Operating netback is a common metric used in the oil and gas industry used to demonstrate profitability from operations.
Non-GAAP Financial Ratios
Operating Netback per boe
Operating netback is calculated on a per unit basis, which is per barrel of oil equivalent ("boe"). It is a common non-GAAP measure used in the oil and gas industry and management believes this measurement assists in evaluating the operating performance of the Company. It is a measure of the economic quality of the Company's producing assets and is useful for evaluating variable costs as it provides a reliable measure regardless of fluctuations in production. Alvopetro calculated operating netback per boe as operating netback divided by total sales volumes (boe). This calculation is provided in the "Operating Netback" section of the Company's MD&A using our IFRS measures. The Company's MD&A may be accessed through the SEDAR+ website at www.sedarplus.ca.
Operating Netback Margin
Operating netback margin is calculated as operating netback per boe divided by the realized sales price per boe. Operating netback margin is a measure of the profitability per boe relative to natural gas, oil and condensate sales revenues per boe and is calculated as follows:
| Three Months Ended March 31, | ||||
2026 | 2025 | |||
Operating netback - $ perboe | 52.12 | 50.77 | ||
Average realized price - $ per boe | 61.77 | 63.67 | ||
Operating netback margin | 84 % | 80 % | ||
Funds Flow from Operations Per Share
Funds flow from operations per share is a non-GAAP ratio that includes all cash generated from operating activities calculated before changes in non-cash working capital, divided by the weighted average shares outstanding for the respective period. For the periods reported in this news release the cash flows from operating activities per share and funds flow from operations per share are as follows:
| Three Months Ended March 31, | ||||
$ per share | 2026 | 2025 | ||
Per basic share: | ||||
Cash flows from operating activities | 0.29 | 0.24 | ||
Funds flow from operations | 0.33 | 0.25 | ||
Per diluted share: | ||||
Cash flows from operating activities | 0.28 | 0.23 | ||
Funds flow from operations | 0.33 | 0.24 | ||
Capital Management Measures
Funds Flow from Operations
Funds flow from operations is a non-GAAP capital management measure that includes all cash generated from operating activities calculated before changes in non-cash working capital. The most comparable GAAP measure to funds flow from operations is cash flows from operating activities. Management considers funds flow from operations important as it helps evaluate financial performance and demonstrates the Company's ability to generate sufficient cash to fund future growth opportunities. Funds flow from operations should not be considered an alternative to, or more meaningful than, cash flows from operating activities however management finds that the impact of working capital items on the cash flows reduces the comparability of the metric from period to period. A reconciliation of funds flow from operations to cash flows from operating activities is as follows:
| Three Months Ended March 31, | ||||
2026 | 2025 | |||
Cash flows from operating activities | 10,717 | 8,817 | ||
Changes in non-cash working capital | 1,788 | 405 | ||
Funds flow from operations | 12,505 | 9,222 | ||
Working Capital
Working capital is computed as current assets less current liabilities. Working capital is a measure of liquidity, is used to evaluate financial resources, and is calculated as follows:
As at March 31, | |||
2026 | 2025 | ||
Total current assets | 41,813 | 25,090 | |
Total current liabilities | (24,917) | (15,348) | |
Working capital | 16,896 | 9,742 | |
Working Capital, Net of Debt
Working capital net of debt is computed as working capital decreased by the non-current portion of the loan. Working capital net of debt is used by management to assess the Company's overall financial position. As of March 31, 2026, Alvopetro's working capital exceeds the balance outstanding on the loan.
As at March 31, | |||
2026 | 2025 | ||
Working capital | 16,896 | 9,742 | |
Loan, non-current | (12,000) | - | |
Working capital, net of debt | 4,896 | 9,742 | |
Supplementary Financial Measures
"Average realized natural gas price - $/Mcf" is comprised of natural gas sales as determined in accordance with IFRS, divided by the Company's natural gas sales volumes.
"Average realized NGL – condensate price - $/bbl" is comprised of condensate sales as determined in accordance with IFRS, divided by the Company's NGL sales volumes from condensate.
"Average realized oil price - $/bbl" is comprised of oil sales as determined in accordance with IFRS, divided by the Company's oil sales volumes.
"Average realized price - $/boe" is comprised of natural gas, condensate and oil sales as determined in accordance with IFRS, divided by the Company's total natural gas, NGL and oil sales volumes (barrels of oil equivalent).
"Dividends per share" is comprised of dividends declared, as determined in accordance with IFRS, divided by the number of shares outstanding at the dividend record date.
"Royalties per boe" is comprised of royalties, as determined in accordance with IFRS, divided by the total natural gas, NGL and oil sales volumes (barrels of oil equivalent).
"Production expenses per boe" is comprised of production expenses, as determined in accordance with IFRS, divided by the total natural gas, NGL and oil sales volumes (barrels of oil equivalent).
"Transportation expenses per boe" is comprised of transportation expenses, as determined in accordance with IFRS, divided by the total natural gas, NGL and oil sales volumes (barrels of oil equivalent).
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 (6 Mcf/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 Natural Gas Volumes
The contracted daily firm volumes under Alvopetro's long-term gas sales agreement of 500 e3m3/d (before any provisions for take or pay allowances) represents contracted volumes based on contract referenced natural gas heating value. 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 8% higher than the contract reference heating value. Therefore, to satisfy the contractual firm deliveries Alvopetro would be required to deliver approximately 463e3m3/d (16.4MMcfpd).
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", "plan", "may", "believe", "estimate", "forecast", "anticipate", "should" 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 statements concerning the expected natural gas price, gas sales and gas deliveries under Alvopetro's long-term gas sales agreement, future production and sales volumes, plans relating to the Company's operational activities, proposed exploration and development activities and the timing for such activities, capital spending levels, future capital and operating costs, anticipated timing for upcoming drilling and testing of other wells, and projected financial results. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to 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 and assumptions concerning the timing of regulatory licenses and approvals, equipment availability, environmental regulation, including regulations 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, the outcome of any disputes, the outcome of redeterminations, general economic and business conditions, forecasted demand for oil and natural gas, the impact of global pandemics, weather and access to drilling locations, the availability and cost of labour and services, and 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. Current and forecasted natural gas nominations are subject to change on a daily basis and such changes may be material. In addition, the declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, reliance on industry partners, availability of equipment and personnel, uncertainty surrounding timing for drilling and completion activities resulting from weather and other factors, changes in applicable regulatory regimes and health, safety and environmental risks), commodity price and foreign exchange rate fluctuations, market uncertainty associated with trade or tariff disputes, and general economic conditions. 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. 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 AIF 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.
SOURCE Alvopetro Energy Ltd.
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