Alvopetro Energy (ALVOF) LD Micro 20th Annual Main Event Conference summary

Operating performance and returns

• First independent producer in Brazil to deliver sales-specified natural gas into the local market, starting July 5, 2020; results have exceeded pre-commercialization expectations.

• Q2 funds flow from operations exceeded $14 million on $19 million of revenue.

• Q2 Brazilian gas price was nearly $11/Mcf; realized price was about $69/BOE, operating costs $5.60/BOE, netback over $59/BOE and margin 86%.

• Brazilian blended royalty rate is below 6%; a special income tax regime provides a 15% tax rate.

• Since production began, funds flow exceeded $230 million; nearly half funded organic growth and reinvestment, while nearly half went to stakeholder returns, including almost $80 million in dividends, or $2.18/share.

Valuation and capital allocation

• Enterprise value below $250 million and less than two-thirds of year-end 2P NPV; combined reserves and resources were presented as approaching $900 million.

• GLJ’s year-end assessment attributed about $3/share to the drilled Murucututu prospective resource area; completion was underway, with production expected that month.

• Quarterly dividend is US$0.12/share, yielding over 7%; cash on hand exceeded $35 million at Q2 end.

• Production rose over 40% last year and about 25% this year; the 2026 capital program targets another 20% uplift into 2027.

Brazil operations and growth

• Caburé is substantially capitalized; its free cash flow can be reinvested in 100%-owned Murucututu, the main growth asset.

• 183-D4 came on at about twice pre-drill expectations; 183-G2 was drilling, with results expected within 30 days, while 183-H2 was being completed for production that month.

• Field takeaway capacity is planned to increase 4x, with work expected to finish around year-end or in January; a plant upgrade supports a 20% production increase into next year.

• Next-year plans include continued Murucututu development, 183-C1 exploration and a recently acquired exploration position exceeding 460 sq km in the adjoining basin.

• Brazil production could rise from 3,000 to 3,600–3,700, based on the facilities plan and success; this was an illustrative outlook, not formal guidance.