CALGARY,
AB, Aug. 4, 2022 /CNW/ - Alvopetro Energy Ltd.
(TSXV: ALV) (OTCQX: ALVOF) announces our inaugural sustainability
report for the year-ended December 31,
2021, July sales volumes and an operational update.
Inaugural Sustainability
Report
We are pleased to present our inaugural 2021 Sustainability
Report (the "Report"), highlighting the operational milestones
achieved through the development of our Caburé project and
outlining Alvopetro's approach to environmental, social and
governance ("ESG") practices. The Report was approved by the
Company's Board of Directors and provides stakeholders insight into
our environmental stewardship, community involvement and corporate
governance practices. A full copy of the Report can be found on our
website at https://alvopetro.com/Sustainability.
Corey Ruttan, President and Chief
Executive Officer, commented: "Our goal while developing this
sustainability report was to create transparency on how we manage
our business objectives focused on innovation, business strength
and our approach to sustainability by; responsibly supplying
energy, strengthening communities and our workforce, and minimizing
our impact."
2021 ESG highlights included:
- Alvopetro's locally produced natural gas resulted in average
savings of 48% for consumers relative to imported LNG and 53% lower
GHG emissions relative to fuel oil;
- 100% of produced water reinjected;
- Scope 1 & 2 emissions intensity of 4.7 kg CO2e
per boe;
- 65% less vegetation removed than allowed in our permit during
the construction of our Murucututu pipeline extension;
- 75 jobs created during Murucututu pipeline construction;
- Zero lost-time safety incidents; and
- Budgeting $0.20/boe to voluntary
social programs.
July Sales Volumes and Facility
Expansion
Our July sales volumes averaged 2,514 boepd based on field
estimates, including natural gas sales of 14.4 MMcfpd, associated
natural gas liquids sales from condensate of 108 bopd and oil sales
of 6 bopd, a 7% increase from our Q2 average of 2,359 boepd. Our
Caburé gas processing facility expansion was commissioned and
completed in late July. We now have available processing capacity
of up to 500,000 cubic metres per day (18 MMcfpd). Prior to
the expansion our sales volumes were limited by the gas processing
facility capacity. With the expanded capacity, our production is
expected to be driven by Alvopetro's share of available Caburé unit
production and production additions from new projects.
Operational Update
In April, we completed drilling our 182-C1 well on Block 182
and, based on open-hole wireline logs, the well discovered 25
metres of potential net natural gas pay in the Agua Grande
formation with an average 34% water saturation and average porosity
of 8.2%, using a 6% porosity cut-off, 50% Vshale cut-off and 50%
water saturation cut-off. We have commenced completion and
testing operations using the drilling rig. After perforating
and cleaning up the well we will complete a 72-hour formation
test. We then plan to move the drilling rig on the same
drilling location to drill a follow up well further east from the
bounding fault to further assess the Agua Grande potential and to
target the Sergi Formation.
In July, we completed drilling our second 2022 exploration well
(183-B1) on the fault block immediately east to our 182-C1
discovery. The 183-B1 location was also a multi-zone pre-rift
prospect targeting both the Agua Grande and Sergi Formations.
Based on open-hole logs and collected fluid samples, the 183-B1
well encountered multiple zones of interest with an aggregate 34.3
metres of potential net hydrocarbon pay, using a 6% porosity
cut-off, 50% Vshale cut-off and 50% water saturation cut-off.
Subject to equipment availability we expect to commence multi-zone
formation tests later in the third quarter.
On our Murucututu project, we commenced commissioning of our
field production facility at our 183-1 location in July and subject
to final ANP inspection we expect to have our 183-1 well on
production near the end of the month. We also commenced field
installation of the pipeline extension to tie-in our 197-1 well in
June and expect construction to be completed later in the third
quarter. Subject to receipt of regulatory approvals, we plan to
complete and tie-in the 197-1 well in the fourth quarter.
At the Caburé Unit, the unit operator has commenced
drilling the Unit C well (49.1% Alvopetro) targeting development
and exploration potential in the Pojuca, Marfim and Caruaçu
formations. Drilling is expected to be completed near the end of
August.
Semi-Annual Natural Gas Price
Redetermination
Pursuant to the terms of our long-term gas sales agreement with
Bahiagás, our natural gas price effective August 1, 2022 is BRL1.94/m3 or $11.28/Mcf (based on our average heat content to
date of 107% and the July 31, 2022 BRL/USD foreign
exchange rate of 5.19). The adjusted price is based on the
ceiling price in the contract, which was adjusted to $10.22/MMBtu effective August 1, 2022. While the ceiling price increased
by 6% from the February 1, 2022
ceiling price, due to the appreciation of the BRL relative to the
USD in the first half of 2022 compared to the latter half of 2021,
the BRL denominated contractual price remained consistent.
This price will be effective for all natural gas sales
from August 1, 2022 to January 31,
2023.
Corporate Presentation
Alvopetro's updated corporate presentation is available on our
website at:
http://www.alvopetro.com/corporate-presentation.
Social Media
Follow Alvopetro on our social media channels at the following
links:
Twitter - https://twitter.com/AlvopetroEnergy
Instagram - https://www.instagram.com/alvopetro/
LinkedIn -
https://www.linkedin.com/company/alvopetro-energy-ltd
YouTube:
https://www.youtube.com/channel/UCgDn_igrQgdlj-maR6fWB0w
Alvopetro Energy Ltd.'s vision is to
become a leading independent upstream and midstream operator in
Brazil. Our strategy is to unlock
the on-shore natural gas potential in the state of Bahia
in Brazil, building
off the development of our Caburé natural gas field and our
strategic midstream infrastructure.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
All amounts contained in this new release are in
United States dollars, unless
otherwise stated and all tabular amounts are in thousands of
United States dollars, except as
otherwise noted.
Abbreviations:
boepd
=
barrels of oil equivalent ("boe") per
day
bopd
=
barrels of oil and/or natural gas liquids (condensate) per
day
MMcf
=
million cubic feet
MMcfpd
=
million cubic feet per day
BOE Disclosure. The term barrels of oil
equivalent ("boe") may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet per
barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is
based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. All boe conversions in this news
release are derived from converting gas to oil in the ratio mix of
six thousand cubic feet of gas to one barrel of oil.
Testing and Well Results. Data obtained
from the 183-B1 and 182-C1 wells identified in this press release,
including hydrocarbon shows, open-hole logging, net pay and
porosities, should be considered to be preliminary until testing,
detailed analysis and interpretation has been completed.
Hydrocarbon shows can be seen during the drilling of a well in
numerous circumstances and do not necessarily indicate a commercial
discovery or the presence of commercial hydrocarbons in a well.
There is no representation by Alvopetro that the data relating to
the 183-B1 well nor the 182-C1 well contained in this press release
is necessarily indicative of long-term performance or ultimate
recovery. The reader is cautioned not to unduly rely on such data
as such data may not be indicative of future performance of the
well or of expected production or operational results for Alvopetro
in the future.
Forward-Looking Statements and Cautionary
Language. This news release contains "forward-looking
information" within the meaning of applicable securities laws. The
use of any of the words "will", "expect", "intend" and other
similar words or expressions are intended to identify
forward-looking information. Forward‐looking statements involve
significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. A number of factors could cause actual results to
vary significantly from the expectations discussed in the
forward-looking statements. These forward-looking statements
reflect current assumptions and expectations regarding future
events. Accordingly, when relying on forward-looking statements to
make decisions, Alvopetro cautions readers not to place undue
reliance on these statements, as forward-looking statements involve
significant risks and uncertainties. More particularly and without
limitation, this news release contains forward-looking information
concerning potential hydrocarbon pay in the 183-B1 and the 182-C1
wells, exploration and development prospects of Alvopetro and the
expected timing of certain of Alvopetro's testing and operational
activities. The forward‐looking statements are based on certain key
expectations and assumptions made by Alvopetro, including but not
limited to expectations and assumptions concerning testing results
of the 183-B1 well and the 182-C1 well, equipment availability, the
timing of regulatory licenses and approvals, the success of future
drilling, completion, testing, recompletion and development
activities, the outlook for commodity markets and ability to access
capital markets, the impact of the COVID-19 pandemic, the
performance of producing wells and reservoirs, well development and
operating performance, foreign exchange rates, general economic and
business conditions, weather and access to drilling locations, the
availability and cost of labour and services, environmental
regulation, including regulation relating to hydraulic fracturing
and stimulation, the ability to monetize hydrocarbons discovered,
the regulatory and legal environment and other risks associated
with oil and gas operations. The reader is cautioned that
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
incorrect. Actual results achieved during the forecast period will
vary from the information provided herein as a result of numerous
known and unknown risks and uncertainties and other factors.
Although Alvopetro believes that the expectations and assumptions
on which such forward-looking information is based are reasonable,
undue reliance should not be placed on the forward-looking
information because Alvopetro can give no assurance that it will
prove to be correct. Readers are cautioned that the foregoing list
of factors is not exhaustive. Additional information on factors
that could affect the operations or financial results of Alvopetro
are included in our annual information form which may be accessed
on Alvopetro's SEDAR profile at www.sedar.com. The
forward-looking information contained in this news release is made
as of the date hereof and Alvopetro undertakes no obligation to
update publicly or revise any forward-looking information, whether
as a result of new information, future events or otherwise, unless
so required by applicable securities laws.
SOURCE Alvopetro Energy Ltd.