Alvopetro Energy (ALVOF) Q4 2025 earnings summary

Executive summary

• Achieved transformational 41% year-over-year production growth in 2025, averaging 2,523 BOE/d, with Q4 production up 22% sequentially to nearly 2,900 BOE/d and January 2026 reaching close to 3,100 BOE/d, driven by the 183-D4 well at Murucututu.

• Expanded operations in Brazil and Canada, including new drilling, facility upgrades, and land acquisitions, positioning for multi-year growth and leveraging high-return opportunities.

• Record funds flow from operations of $10.6M in Q4 and $40.6M for the year, supporting both reinvestment and shareholder returns.

• Maintained a disciplined capital allocation model, splitting funds flow roughly 50/50 between growth and returns, with over $70M in dividends declared since 2021 and a Q1 2026 dividend of $0.12/share.

• First Brazilian integrated onshore natural gas producer, with a balanced reinvestment and stakeholder return model.

Financial highlights

• Q4 2025 production averaged 2,867 boepd, with 89% natural gas; annual average was 2,523 boepd (+41% year-over-year).

• Q4 funds flow from operations was $10.6 million; annual funds flow from operations was $40.6 million, up 22% year-over-year.

• Q4 2025 net income was $5.6 million, up $1M from Q3 and $3.3 million year-over-year; annual net income reached $23.1 million (+42% year-over-year).

• Working capital net of debt was $2.5 million at year-end, after entering a $20 million loan agreement at 7% interest, with repayments starting end of 2026.

• 1P reserves increased 79% to 8.1 MMboe; 2P reserves up 43% to 13.1 MMboe as of Dec 31, 2025.

Outlook and guidance

• 2026 production projected to average over 3,000 BOE/d, a 22% increase from 2025, with further growth targeted as Murucututu expansion completes.

• CapEx budget for Brazil in 2026 is $21M, focused on facilities expansion and a new well at Murucututu; Canadian drilling plans are commodity price dependent.

• Near-term growth plan includes optimizing UPGN Caburé and expanding Murucututu pipeline and production capacity to 21.2 MMcfpd in 2026.

• Multi-year development in Murucututu’s Gomo and Caruaçu formations, with additional drilling and facility expansions planned through 2028.

• Dividend for Q1 2026 set at $0.12/share, representing an 8% yield.