Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) posted a sharp rise in second-quarter profit on Wednesday, supported by strong natural gas and oil sales from its operations in Brazil and newly added assets in Western Canada.
Net income for the quarter ended June 30 rose to $6.8 million, or $0.18 per share, from $2.3 million, or $0.06 per share, a year earlier, as average daily sales volumes jumped 50% year-over-year to 2,436 barrels of oil equivalent per day (boepd).
“Q2 included our first quarter of sales from our recently added Western Canadian assets and overall sales volumes continued to be very strong,” CEO Corey Ruttan said in a statement. “We have a considerable amount of activity underway and we are looking forward to an exciting Q3.”
Alvopetro said funds flow from operations increased to $10.4 million, up from $7.9 million in the prior-year quarter, while revenue from natural gas, oil and condensate rose 31% to $14 million.
Brazilian sales accounted for the majority of the total, averaging 2,298 boepd in the quarter, while Canadian production contributed 138 boepd, after sales began in April.
The company realized an average natural gas price of $10.62 per thousand cubic feet (Mcf) in the quarter, down 10% from Q2 2024 but up 2% from the prior quarter. Operating netback fell to $54.72 per boe from $64.30 a year ago due to lower realized prices and higher royalties, though it improved from Q1 on lower royalty rates.
Alvopetro expects natural gas prices under its long-term Brazilian contract to decrease slightly to $10.27/Mcf from August through October, primarily reflecting weaker benchmark pricing.
In Brazil, Alvopetro completed drilling of the 183-D4 well at its Murucututu field in the second quarter and plans to bring the well onstream later in Q3. Total capital expenditures for the field in the second half of 2025 are expected to reach $3.3 million.
At the Caburé unit, joint development activities continued with three wells drilled and a fourth planned for later in the quarter. Alvopetro’s share of development costs for the second half of the year is estimated at $5.5 million.
In Western Canada, Alvopetro drilled two additional multi-lateral wells in July with over 19 kilometers of reservoir contact. These are expected to be tied in later in the third quarter. The company now holds 17,780 gross acres (8,890 net) of land in the Mannville play.
Total capital expenditures for the quarter amounted to $9 million.
Alvopetro reported a working capital surplus of $6.8 million as of the end of June 2025.