Alvopetro Energy (ALVOF) Q4 2024 earnings summary

Executive summary

• Production in January and February 2025 averaged 2,375 BOE/d, up 37% from Q4 2024, driven by increased firm supply to Bahiagás and operational improvements.

• First Brazilian integrated onshore natural gas producer with strong operating and financial results exceeding expectations.

• Strategic entry into the Western Canadian Sedimentary Basin with two wells drilled and a 50% working interest earned in over 19 sections of land.

• Dividend increased to $0.10 per share for Q1 2025, reflecting improved business strength and disciplined capital allocation.

• Updated long-term gas sales agreement effective January 2025 increased contracted firm reference volumes by 33%.

Financial highlights

• Q4 2024 realized natural gas sales price was $10.51 per Mcf, down 4% from Q3 and 18% year-over-year due to currency devaluation.

• Q4 2024 funds flow from operations was $7 million, down $2.9 million from Q3 and 44% year-over-year.

• Q4 2024 net income was $2.2 million, up $1.6 million year-over-year, but annual net income for 2024 was $16.3 million, down 43% from 2023.

• Q4 2024 operating netback margin was 86%, with netback of $55.09 per BOE.

• Year-end working capital was $13.2 million, with cash and cash equivalents at $21.7 million.

Outlook and guidance

• Plans to add more 100% working interest production in 2025 and increase firm commitments for gas sales.

• Flexible capital program in Canada, with expectations to drill 2–4 additional wells in 2025, depending on results and oil prices.

• 2P production forecast for 2025 is 15.9 MMcf/d, dependent on Bahiagás demand.

• Near-term goal to reach 18 MMcfepd and longer-term vision of 35 MMcfepd.

• Five development wells planned for Caburé and two for Murucututu in 2025.