Alvopetro Energy (ALVOF) Q3 2024 earnings summary

Executive summary

• Q3 2024 average daily production was 2,106 BOE/d, up 29% quarter-over-quarter and 24% year-over-year, driven by increased natural gas demand and Murucututu field ramp-up; October production was 1,912 BOE/d, impacted by Bahiagás demand.

• The 183-A3 well contributed 17% of October production and boosted Murucututu field output by 187% over Q3 2024; further drilling and optimization projects are planned.

• Strategy focuses on increasing productive capacity from Caburé and Murucututu projects to reach a near-term goal of 3,000 BOE/d.

Financial highlights

• Q3 2024 revenue was $12.9 million, up $0.6 million year-over-year and $2.2 million sequentially, reflecting higher sales volumes.

• Operating netback was just over $59/BOE, with a profit margin of 89%.

• Realized sales price dropped from $66.46/BOE in Q2 to $59/BOE in Q3, mainly due to a 7% weaker Brazilian real.

• Funds flow from operations increased by $2 million to $9.9 million, up 3% year-over-year and 25% sequentially.

• Net income for Q3 2024 was $7.2 million, a 23% increase year-over-year and up $4.8 million sequentially, aided by FX gains.

• Working capital ended at $15.8 million, with $24.5 million in cash and no debt.

Outlook and guidance

• Near-term goal is to reach 3,000 BOE/d, filling current facility capacity.

• Growth expected from a five-well development at Caburé and further Murucututu drilling, with a new well planned for late 2024.

• CapEx for Q3 was $4.7 million, mainly for Murucututu completions and Caburé facility upgrades; 2025 plan includes $7 million for unit wells and $1 million for facility upgrades.

• Monitoring and optimization of Murucututu wells continue, with follow-up drilling and operational activity planned.

• Forward-looking statements highlight expectations for continued growth but caution on risks and uncertainties.