Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) reported a 41% increase in sales in January 2025 compared to the fourth quarter of 2024.
Total sales volumes for January reached 2,457 barrels of oil equivalent per day (boepd), driven by natural gas sales of 13.8 million cubic feet per day (MMcfpd).
This represents a notable increase from Q4 2024, primarily due to higher production from the Caburé field, which contributed 11,450 Mcfpd, compared to 7,474 Mcfpd in Q4.
Sales from associated natural gas liquids (NGLs) and oil also increased to 141 barrels per day (bopd) and 18 bopd, respectively.
Additionally, the company's updated long-term gas sales agreement with Bahiagás has increased Alvopetro’s contracted firm volumes by 33% to 400 e3m3/d.
The new pricing model, which adjusts quarterly based on Brent oil equivalent and Henry Hub prices, resulted in a 6.5% price increase for February 2025 to BRL1.95/m³, up from BRL1.83 in January. This pricing level aligns with Q4 2024’s rate of BRL1.94/m³.
During Q4, Alvopetro said it attempted an optimization project on its 183-B1 well on Block 183, targeting the Sergi Formation through a horizontal sidetrack. However, operational challenges led to the abandonment of the project, incurring costs of approximately $4 million.
Looking ahead, Alvopetro is set to commence drilling at the 183-D4 location in the Murucututu field this week. The well targets the Caruaçu Member and an additional exploratory zone in the Marfin Formation, with results expected near the end of Q1 2025.
Following this, the company plans to drill five development wells at the Caburé Unit, in alignment with its partnership agreement. Alvopetro also recently completed commissioning a new compression system at Caburé, increasing production capacity from the field.
Canadian expansion
The company also announced that as part of its growth strategy, it is entering the Western Canadian Sedimentary Basin.
The company is initially focusing on the Mannville heavy oil fairway, which holds substantial oil resources across multiple formations, offering strong development potential through multilateral drilling.
To establish its presence, Alvopetro has entered a farm-in agreement with Durham Creek Energy, an experienced operator in western Saskatchewan.
Under the terms of the agreement, Alvopetro will fund two earning wells at an estimated cost of C$4.5 million in exchange for a 50% working interest in 19.13 sections (12,243 acres) of land. A successful outcome could support up to 100 future drilling locations.
"Alvopetro's strong financial position and cash flows from operations help position the company to maximize shareholder returns from our combined asset base,” Alvopetro CEO Corey Ruttan said in a statement.
“With exposure to projects in Brazil and now also in Canada, it allows us to allocate capital across a growing inventory of high rate of return opportunities and to continue our disciplined capital allocation model."