Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) said it is heading into 2025 with higher future sales commitments and increased production capacity from its Brazilian energy assets.
The company announced its November 2024 sales volumes, an update to its long-term natural gas sales agreement with Bahiagás, and a quarterly dividend for the fourth quarter of 2024.
November sales averaged 1,465 barrels of oil equivalent per day (boepd), with natural gas sales at 8.1 million cubic feet per day (MMcfpd), natural gas liquids (NGLs) at 110 barrels per day (bopd), and oil at 9 bopd.
Sales volumes were impacted by reduced demand in Bahia due to facility turnarounds, alongside a two-day production shutdown for mandatory inspections, Alvopetro told shareholders.
Natural gas production at the Caburé field decreased to 5.8 MMcfpd from 9.0 MMcfpd in October, while output from the Murucututu field increased to 2.2 MMcfpd from 1.8 MMcfpd, accounting for 28% of total gas sales.
Murucututu's 183-A3 well outperformed expectations and remained a key contributor, the company noted.
Early December natural gas sales volumes have averaged 11.6 MMcfpd, based on field estimates.
The company announced a revised long-term sales agreement with Bahiagás, starting in January 2025, that increases contracted firm volumes by 33% to 400,000 cubic meters per day and extending the contract through 2034.
Key updates to the agreement include a new pricing model recalculated quarterly to reflect Brent oil and Henry Hub gas prices, enabling quicker adjustments to market conditions. The revised terms also remove pricing floor and ceiling provisions, introduce enhanced penalty mechanisms to mitigate risks from supply failures, and retain "take-or-pay" provisions that ensure payment for undelivered gas falling below contract thresholds.
Alvopetro’s contracted firm deliveries equate to 13.1 MMcfpd, contributing to an estimated 2025 sales volume of 2,310 boepd, a 28% increase from 2024 forecasts.
CEO Corey Ruttan highlighted the company’s strategic progress.
"In 2024 we increased our productive capacity at Caburé and, with our recent success at Murucututu, this has allowed us to commit to a higher level of base committed firm sales volumes starting in 2025 further strengthening our disciplined capital allocation model, balancing returns to stakeholders and organic growth," Ruttan said.
The board has also declared a quarterly dividend of $0.09 per common share.