Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) reported a 41% surge in first-quarter 2025 sales volumes and said its new Canadian oil wells are outperforming expectations, helping to support an organically funded capital program across Brazil and Canada.
The Calgary-based company posted average daily sales of 2,446 barrels of oil equivalent per day (boepd) in the quarter, up from 1,735 boepd a year earlier, fueled by expanded natural gas volumes under an updated long-term sales agreement in Brazil.
CEO Corey Ruttan lauded a “strong start to the year” for the company, adding that it is “well positioned for an exciting organically funded 2025 capital program.”
Alvopetro reported net income of $6.1 million for the quarter, up from $4.6 million a year earlier, with revenue climbing 19% year-over-year to $14.0 million despite a 17% decline in realized natural gas prices due to the depreciation of Brazil’s real against the U.S. dollar.
April sales volumes in Brazil averaged 2,372 boepd, which, combined with the Canadian contribution of 90 bopd from the new wells, totaled April sales of 2,462 boepd, according to field estimates.
The company said it has increased its Canadian land position to nearly 15,900 acres (7,931 acres net) and plans to drill up to four additional multilateral oil wells this year. The initial wells, drilled in Western Saskatchewan's Mannville Stack formation, exceeded the company’s gross production target of 100–120 barrels of oil per day per well.
“Our first two wells in Canada are exceeding expectations and we are looking forward to an expanding capital program including a strong inventory of oil drilling locations,” Ruttan added.
Alvopetro’s natural gas price under its contract with Bahiagás in Brazil increased 7% to BRL2.08 per cubic meter as of May 1. All gas sold from May through July will be priced at about $11.09 per Mcf, based on current exchange rates.
In Brazil, the company continues to develop its 100%-owned Murucututu field and expects to drill five development wells in the unitized Caburé field this year. However, operations at Murucututu faced delays due to drilling challenges with the 183-D4 well, where the company is now drilling a sidetrack.
Capital expenditures in the quarter totaled $8.4 million, including $2.6 million for the Canadian wells. Funds from operations rose to $9.2 million, while the company’s operating netback declined to $50.77 per boe, impacted by lower prices and a royalty dispute settlement recognized in the quarter.
Alvopetro’s working capital surplus stood at $9.7 million as of March 31, down from $13.1 million at the end of 2024.