Alvopetro reports third-quarter results and Murucututu well update

Key Highlights

• Alvopetro Energy completed drilling the 183-G2 natural gas well at Murucututu in Brazil.
• The company reported third-quarter revenue of US$19.3 million and net income of US$8.5 million.
• Alvopetro expects Murucututu facility upgrades and a 183-G2 tie-in to finish in early 2027.
• Alvopetro was awarded four Brazil blocks, with BRL 8.3 million minimum work commitments.

Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) released a combined operational update and financial report that included initial results from its 183-G2 well at the Murucututu natural gas field in Brazil, along with results for the three and nine months ended September 30, 2026.

The company reported third-quarter natural gas, oil and condensate sales of US$19.3 million, funds flow from operations of US$14.3 million, and net income of US$8.5 million. Average daily sales volumes in the quarter were 2,966 barrels of oil equivalent per day, and Alvopetro reported a realized natural gas price of US$11.49 per thousand cubic feet.

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Murucututu drilling and facility expansion

Alvopetro said it has completed drilling the 183-G2 well on its 100%-owned Murucututu natural gas field. The well was drilled to a total measured depth of 3,189.8 metres.

Based on open-hole logs, Alvopetro said the well encountered 96.9 metres total vertical depth of potential natural gas pay in the Caruae7u Member of the Maracangalha Formation, using a 6% porosity cut-off, 50% shale volume cut-off and 50% water saturation cut-off. The company cautioned that the 183-G2 data, including potential net pay, is preliminary and not necessarily indicative of long-term performance or ultimate recovery.

The 183-G2 well was drilled from the newly constructed 183-G well pad, which Alvopetro said is being tied into the Murucututu field production facility. The tie-in is expected to be completed in early 2027, after which the company plans to complete the well in up to 13 intervals and bring it on production in the first quarter of 2027.

Alvopetro also provided an update on Murucututu facilities work, saying it is upgrading the fields production facility and pipeline offtake capacity from 150 thousand cubic metres per day to 600 thousand cubic metres per day, with completion expected in early 2027.

Separately, Alvopetro said it completed the 183-H2 well in five intervals and provided early flow information, noting the results are preliminary. After an initial four-day cleanup period, the company said the well flowed into its gas gathering system for 14 days at an average rate of 19.1 thousand cubic metres per day (0.7 million cubic feet per day, 112 barrels of oil equivalent per day) at a constant 28/64-inch choke.

Brazil and Canada activity updates

In Brazil, Alvopetro said it plans to sidetrack one unfinished well from its 2025 capital program at Cabure9 later in the quarter.

The company also said it was awarded four blocks in the 6th Cycle of Brazils Permanent Concession Offer run by the National Agency of Petroleum, Natural Gas and Biofuels (ANP). Alvopetro said it agreed to minimum work commitments totalling BRL 8.3 million (US$1.7 million) and aggregate signing bonuses of BRL 0.6 million (US$0.1 million). The four blocks cover more than 462 square kilometres and are located in the Tucano Basin north of Alvopetros core operating area, according to the release.

In Canada, Alvopetro said its original partner drilled, completed and equipped two planned multi-lateral wells in Saskatchewan, and both are now on production. Alvopetro said its working interest is 50% in the first well and 30% in the second.

Alvopetro also reiterated details of its 2026 farmin agreement announced in September. The company said it expects to commence drilling the first of five earning wells in the coming days and is targeting completion of all five wells by early 2027. Alvopetro said it is responsible for 100% of the costs of the five wells, estimated at C$8.5 million, and that as the wells are drilled it will earn a 50% interest in surrounding undeveloped lands.

For October, Alvopetro reported sales volumes averaged 3,200 barrels of oil equivalent per day based on field estimates, including 3,095 barrels of oil equivalent per day from Brazil and 105 barrels per day from oil sales in Canada.

Natural gas pricing and other corporate items

Alvopetro said its long-term natural gas sales agreement price was adjusted effective November 1, 2026, to BRL 1.97 per cubic metre on the first 400 thousand cubic metres per day of reference volumes, with incremental reference volumes priced at BRL 1.84 per cubic metre. Based on the companys average heat content to date and the October 30, 2026 BRL/USD exchange rate of 5.42, Alvopetro said its weighted average realized price on firm natural gas sales for the November 1, 2026 to January 31, 2027 period is expected to be US$11.10 per thousand cubic feet, down 3% from the third quarter. It noted amounts received in US dollars will be impacted by exchange rates during the period.

The company also said its Board approved annual rolling long-term incentive grants under its Omnibus Incentive Plan, consisting of 142,200 restricted share units and 36,500 deferred share units, expected to be granted on November 10, 2026. Each unit entitles the holder to purchase one common share, and the company said the units expire five years from the grant date.

Alvopetro said it will host a webcast to discuss its third-quarter results on November 6, 2026, with a revised start time of 9:00 am Alberta time.

The original press release is available on stockhouse.com