CALGARY,
AB, March 21, 2023 /CNW/ - Alvopetro
Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) is pleased to announce a 17%
increase in our quarterly dividend, to US$0.14 per common share, our financial results
for the year ended December 31, 2022,
filing of our annual information form, an automatic share
repurchase plan, and an operational update.
All references herein to $ refer to United States dollars, unless otherwise stated
and all tabular amounts are in thousands of United States dollars, except as otherwise
noted.
President & CEO, Corey C.
Ruttan commented:
"We are very pleased with our 2022 results, from revenues of
$63.5 million we generated
$49.9 million of funds flow from
operations and net income of $31.7
million, increases of 82%, 102% and 467% respectively, year
over year. This represents industry leading operating netback
margins underpinning our disciplined capital allocation model that
balances organic growth and stakeholder returns. Since commencing
production from our Caburé project in 2020, we have repaid all
outstanding debt and today's announcement represents the third
increase in our quarterly dividend since Q1 2022. With this, we
will have already returned $22
million ($0.62/share) to
shareholders in the form of dividends. We are also firmly focused
on our next phase of growth and are looking forward to an exciting
2023 capital program."
Quarterly Dividend Increased 17% to $0.14 per Share
Alvopetro is pleased to announce that our Board of Directors has
approved a 17% increase in our quarterly dividend, to $0.14 per common share, payable in cash
on April 14, 2023, to shareholders of record on March 31,
2023. This dividend is designated as an "eligible dividend" for
Canadian income tax purposes.
Dividend payments to non-residents of Canada will be
subject to withholding taxes at the Canadian statutory rate of
25%. Shareholders may be entitled to a reduced withholding
tax rate under a tax treaty between their country of residence and
Canada. For further information, see Alvopetro's website
at https://alvopetro.com/Dividends-Non-resident-Shareholders.
Operational Update
Our average daily sales have continued at strong rates in 2023,
averaging 2,754 boepd in January and a new daily record of 2,866
boepd in February. Effective February 1,
2023, our natural gas price increased to BRL2.00/m3 and is effective for all
natural gas sales from February 1 to July 31, 2023. Including recently approved and
enhanced sales tax credits, our realized gas price, net of sales
taxes, for the month of February was approximately $12.23/Mcf (based on our average heat content to
date and the average February
2023 BRL/USD foreign exchange rate of 5.17).
On February 6, 2023, we announced
our 2023 capital program, focused on lower risk development
opportunities on our Murucututu natural gas project and our Bom
Lugar oil field. We have commenced stimulation operations at our
197(1) well on Murucututu. The 197(1) well location has already
been tied in to our 183(1) facility and we expect to commence
production from the well in the second quarter. Following this
stimulation, we plan to drill two follow-up wells at Murucututu,
with one well having additional uphole exploration potential. We
have budgeted total capital expenditures of $16 million for our Murucututu project in
2023.
On our Bom Lugar field, we plan to drill up to two development
wells in 2023, targeting the Caruaçu Formation with additional
potential in the deeper Gomo and Agua Grande Formations, the first
of which is planned for the second quarter. Total capital
expenditures of up to $11 million are
budgeted at Bom Lugar.
Additional capital spending budgeted for 2023 includes
$3 million on our Caburé field for
the expansion of unit facilities and drilling two additional wells,
$0.5 million at our Mãe-da-lua field
for stimulation of the existing well and $0.4 million in capital expenditures at our
182-C2 and 183-B2 wells.
Automatic Share Repurchase Plan
In January 2023, we received
approval from the TSX Venture Exchange ("TSXV") for a normal course
issuer bid (the "NCIB") as more particularly described in our news
release dated January 3, 2023. The
terms of the NCIB permit Alvopetro to repurchase up to 2,876,414
common shares from January 6, 2023 to
the earlier of January 5, 2024 or
when the NCIB is completed or terminated by Alvopetro. No
repurchases have been made under the NCIB to date.
Alvopetro intends to enter into an automatic share purchase plan
("ASPP") with our designated broker, subject to the approval of the
TSXV. The ASPP is intended to allow for the purchase of common
shares under the NCIB at times when the Corporation may not
ordinarily be permitted to purchase common shares due to regulatory
restrictions and customary self-imposed blackout periods.
The ASPP is to be implemented upon TSXV approval and would allow
the designated broker to purchase common shares pursuant to the
proposed ASPP until the expiry of the NCIB on January 5, 2024. Such purchases will be
determined by the broker at its sole discretion based on the
purchasing parameters set out by the Corporation in accordance with
the rules of the TSXV, applicable securities laws and the terms of
the ASPP. The ASPP will terminate on the earlier of the date on
which: (i) the NCIB expires; (ii) the maximum number of common
shares have been purchased under the ASPP; and (iii) the
Corporation terminates the ASPP in accordance with its terms.
Outside of the ASPP and outside of pre-determined blackout
periods, common shares may continue to be purchased under the NCIB
based on management's discretion, in compliance with the rules of
the TSXV and applicable securities laws. All purchases made under
the ASPP will be included in the number of common shares available
for purchase under the NCIB.
December 31, 2022 Reserves and
Net Asset Value
On February 28, 2023, Alvopetro
announced its December 31, 2022
reserves based upon the independent reserve assessment and
evaluation prepared by GLJ Ltd. ("GLJ") dated February 27, 2023 with an effective date of
December 31, 2022 (the "GLJ Reserves
and Resources Report").
Key highlights from the GLJ Reserves and Resources
Report1:
- 2P net present value before tax discounted at 10% ("NPV10")
increased 17% to $348.2 million.
- Proved reserves ("1P") decreased 12% to 3.9 MMboe and 2P
reserves increased 3% to 9.0 MMboe after 0.9 MMboe of production in
2022.
- 2P production replacement ratio of 132%.
- 2P F&D costs of $28.66/boe.
- 2P recycle ratio of 2.1 times.
- 2P Net Asset Value of CAD$13.70/share ($9.99/share) before any potential from contingent
or prospective resources.
- Risked best estimate contingent resource of 2.9 MMboe (NPV10
$62.2 million) and risked best
estimate prospective resource of 12.5 MMboe (NPV10 $259.1 million).
1
Refer to the section entitled "Oil and Natural Gas Advisories" for
additional disclosures regarding oil and natural gas reserves,
contingent resources and prospective resources. In addition refer
to "Oil and – Natural Gas Advisories - Other Metrics" and "Non-GAAP
and Other Financial Measures" for additional disclosures and
assumptions used in calculating production replacement ratio,
F&D costs, recycle ratio, net asset value and net asset value
per share.
|
Financial and Operating Highlights – Fourth Quarter of
2022
- Our average daily sales increased to a new quarterly record of
2,724 boepd (+3% from Q3 2022 and +12% from Q4 2021).
- With natural gas sales in Q4 2022 continuing at the ceiling
price in our contract, our average realized natural gas price was
$11.18/Mcf (+58% from Q4 2021) and
our average realized price per boe was $68.13 (+54% from Q4 2021). Higher realized
prices and record daily sales volumes resulted in a 73% increase in
our natural gas, condensate and oil revenue compared to Q4
2021.
- Our operating netback was $60.08
per boe in Q4 2022, an improvement of $23.70 per boe from Q4 2021 (+65%) and
$0.25 per boe from Q3 2022.
- We generated funds flows from operations of $13.2 million ($0.36 per basic share and $0.35 per diluted share), an increase of
$6.7 million compared to Q4 2021 and
a decrease of $0.2 million compared
to Q3 2022.
- We reported net income of $5.2
million in Q4 2022, an increase of $2.4 million (+87%) compared to Q4 2021. Net
income was impacted by impairment expense of $6.3 million recognized on exploration
assets.
- Capital expenditures totaled $5.9
million, including drilling and testing costs for our 182-C2
well, testing of the Unit-C well and facilities expenditures at the
Caburé unit, testing costs for our 183-B1 well, development costs
on our Murucututu project and long-lead purchases.
- Our Q4 2022 dividend increased 50% to $0.12 per share. The Q4 2022 dividend was paid on
January 13, 2023 to shareholders of
record on December 30, 2022.
- Our cash and working capital increased to $14.7 million, an improvement of $2.5 million compared to September 30, 2022 and an increase of
$12.1 million compared to
December 31, 2021 working capital net
of debt of $2.6 million.
Financial and Operating Highlights – Year Ended December 31, 2022
- Our annual sales averaged 2,557 boepd (95% natural gas, 4% NGLs
from condensate and marginal crude oil production), an increase of
8% compared to 2021.
- We reported net income of $31.7
million, compared to $5.6
million in 2021 (+467%).
- We generated funds flow from operations of $49.9 million ($1.44 per basic share on $1.35 per diluted share) compared to $24.6 million in 2021 ($0.74 per basic share and $0.71 per diluted share).
- Capital expenditures totaled $24.8
million in 2022.
- In the third quarter of 2022, all outstanding warrants were
exercised. Alvopetro received cash proceeds of $2.4 million and issued a total of 2,081,616
common shares on the exercise.
- The credit facility was fully repaid in September 2022 and has been cancelled.
- Dividends totaled $0.36 per share
in 2022 compared to $0.12 per share
in 2021 (+200%).
The following table provides a summary of Alvopetro's financial
and operating results for periods noted. The consolidated financial
statements with the Management's Discussion and Analysis
("MD&A") are available on our website at www.alvopetro.com and
will be available on the System for Electronic Document Analysis
and Retrieval (SEDAR) website at www.sedar.com.
|
As at and Three
Months Ended
December
31,
|
As at and Year
Ended
December
31,
|
|
2022
|
2021
|
Change (%)
|
2022
|
2021
|
Change (%)
|
Financial
|
|
|
|
|
|
|
($000s, except where
noted)
|
|
|
|
|
|
|
Natural gas, oil and
condensate sales
|
17,077
|
9,896
|
73
|
63,508
|
34,980
|
82
|
Net income
|
5,191
|
2,778
|
87
|
31,732
|
5,595
|
467
|
Per share – basic
($)(1)
|
0.14
|
0.08
|
75
|
0.92
|
0.17
|
441
|
Per share – diluted
($)(1)
|
0.14
|
0.08
|
75
|
0.86
|
0.16
|
438
|
Cash flow from
operating activities
|
12,366
|
7,088
|
74
|
47,534
|
24,291
|
96
|
Per share – basic
($)(1)
|
0.34
|
0.21
|
62
|
1.37
|
0.73
|
88
|
Per share – diluted
($)(1)
|
0.33
|
0.20
|
65
|
1.29
|
0.70
|
84
|
Funds flow from
operations (2)
|
13,193
|
6,480
|
104
|
49,879
|
24,637
|
102
|
Per share – basic
($)(1)
|
0.36
|
0.19
|
89
|
1.44
|
0.74
|
95
|
Per share – diluted
($)(1)
|
0.35
|
0.18
|
94
|
1.35
|
0.71
|
90
|
Dividends
declared
|
4,357
|
2,034
|
114
|
12,697
|
4,057
|
213
|
Per
share(1)
|
0.12
|
0.06
|
100
|
0.36
|
0.12
|
200
|
Capital
expenditures
|
5,944
|
1,470
|
304
|
24,795
|
4,513
|
449
|
Cash and cash
equivalents
|
19,784
|
11,469
|
72
|
19,784
|
11,469
|
72
|
Net working capital
surplus(2)
|
14,698
|
9,097
|
62
|
14,698
|
9,097
|
62
|
Working capital, net of
debt(2)
|
14,698
|
2,552
|
476
|
14,698
|
2,552
|
476
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
Basic
(000s)(1)
|
36,231
|
33,824
|
7
|
34,642
|
33,103
|
5
|
Diluted
(000s)(1)
|
37,298
|
35,986
|
4
|
36,919
|
34,928
|
6
|
Operations
|
|
|
|
|
|
|
Natural gas, NGLs and
crude oil sales:
|
|
|
|
|
|
|
Natural gas
(Mcfpd)
|
15,546
|
13,966
|
11
|
14,647
|
13,517
|
8
|
NGLs – condensate
(bopd)
|
128
|
103
|
24
|
110
|
103
|
7
|
Oil (bopd)
|
5
|
2
|
150
|
6
|
2
|
200
|
Total
(boepd)
|
2,724
|
2,432
|
12
|
2,557
|
2,358
|
8
|
|
|
|
|
|
|
|
Average realized
prices(2):
|
|
|
|
|
|
|
Natural gas
($/Mcf)
|
11.18
|
7.07
|
58
|
11.07
|
6.50
|
70
|
NGLs – condensate
($/bbl)
|
89.29
|
84.36
|
6
|
103.50
|
75.89
|
36
|
Oil ($/bbl)
|
79.50
|
76.47
|
4
|
82.67
|
63.61
|
30
|
Company total
($/boe)
|
68.13
|
44.22
|
54
|
68.04
|
40.64
|
67
|
|
|
|
|
|
|
|
Operating netback
($/boe)(2)
|
|
|
|
|
|
|
Realized sales
price
|
68.13
|
44.22
|
54
|
68.04
|
40.64
|
67
|
Royalties
|
(4.15)
|
(4.22)
|
(2)
|
(4.81)
|
(3.61)
|
33
|
Production
expenses
|
(3.90)
|
(3.62)
|
8
|
(3.80)
|
(3.64)
|
4
|
Operating
netback
|
60.08
|
36.38
|
65
|
59.43
|
33.39
|
78
|
Operating netback
margin(2)
|
88 %
|
82 %
|
7
|
87 %
|
82 %
|
6
|
Notes:
|
(1) Per share
amounts are based on weighted average shares outstanding other than
dividends per share, which is based on the number of common shares
outstanding at each dividend record date. The weighted average
number of diluted common shares outstanding in the computation of
funds flow from operations and cash flows from operating activities
per share is the same as for net income per share.
|
(2) See
"Non-GAAP and Other Financial Measures" section within this
news release.
|
2022 Results Webcast
Alvopetro will host a live webcast to discuss 2022 financial
results at 9:00 am Mountain time on
Wednesday March 22, 2023. Details for joining the event are
as follows:
DATE: March 22,
2023
TIME: 9:00 AM
Mountain/11:00 AM Eastern
LINK: https://us06web.zoom.us/j/83279531812
DIAL-IN NUMBERS: https://us06web.zoom.us/u/kcfqlsznW
WEBINAR ID: 832 7953 1812
The webcast will include a question and answer period. Online
participants will be able to ask questions through the Zoom portal.
Dial-in participants can email questions directly to
socialmedia@alvopetro.com.
Annual Information Form
Alvopetro has filed its annual information form ("AIF") with the
Canadian securities regulators on SEDAR. The AIF includes the
disclosure and reports relating to oil and gas reserves data and
other oil and gas information required pursuant to National
Instrument 51-101 of the Canadian Securities Administrators. The
AIF may be accessed electronically at www.sedar.com.
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
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.
Abbreviations:
$000s
|
=
|
thousands of U.S.
dollars
|
1P
|
=
|
proved
reserves
|
2P
|
=
|
proved plus probable
reserves
|
bbls
|
=
|
barrels
|
boepd
|
=
|
barrels of oil
equivalent ("boe") per day
|
bopd
|
=
|
barrels of oil and/or
natural gas liquids (condensate) per day
|
BRL
|
=
|
Brazilian
Real
|
CAD
|
=
|
Canadian
dollars
|
F&D
|
=
|
finding and development
costs
|
FDC
|
=
|
future development
costs
|
m3
|
=
|
cubic metre
|
Mcf
|
=
|
thousand cubic
feet
|
Mcfpd
|
=
|
thousand cubic feet per
day
|
MMcf
|
=
|
million cubic
feet
|
MMcfpd
|
=
|
million cubic feet per
day
|
NGLs
|
=
|
natural gas
liquids
|
Q4 2021
|
=
|
three months ended
December 31, 2021
|
Q3 2022
|
=
|
three months ended
September 30, 2022
|
Q4 2022
|
=
|
three months ended
December 31, 2022
|
Oil and Natural Gas Advisories
Oil and Natural Gas Reserves
The disclosure in this news release summarizes certain
information contained in the GLJ Reserves and Resources Report but
represents only a portion of the disclosure required under National
Instrument 51-101 ("NI 51-101"). For additional details, see our
news release dated February 28, 2023.
Full disclosure with respect to the Company's reserves as at
December 31, 2022 is contained in the
Company's annual information form for the year ended December 31, 2022 which has been filed on SEDAR
(www.sedar.com). All net present values in this press release are
based on estimates of future operating and capital costs and GLJ's
forecast prices as of December 31,
2022. The reserves definitions used in this evaluation are
the standards defined by the Canadian Oil and Gas Evaluation
Handbook (COGEH) reserve definitions, are consistent with NI 51-101
and are used by GLJ. The net present values of future net revenue
attributable to the Alvopetro's reserves estimated by GLJ do not
represent the fair market value of those reserves. Other
assumptions and qualifications relating to costs, prices for future
production and other matters are summarized herein. The recovery
and reserve estimates of the Company's reserves provided herein are
estimates only and there is no guarantee that the estimated
reserves will be recovered. Actual reserves may be greater than or
less than the estimates provided herein. Possible reserves are
those additional reserves that are less certain to be recovered
than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of
proved plus probable plus possible reserves.
Contingent Resources
This news release discloses estimates of Alvopetro's contingent
resources and the net present value associated with net revenues
associated with the production of such contingent resources as
included in the GLJ Reserves and Resources Report. There is no
certainty that it will be commercially viable to produce any
portion of such contingent resources and the estimated future net
revenues do not necessarily represent the fair market value of such
contingent resources. Estimates of contingent resources involve
additional risks over estimates of reserves. For additional details
with respect to Alvopetro's contingent resources evaluated as at
December 31, 2022, see our news
release dated February 28, 2023 and
additional details contained in the Company's annual information
form for the year ended December 31,
2022 which has been filed on SEDAR (www.sedar.com).
Prospective Resources
This news release discloses estimates of Alvopetro's prospective
resources included in the GLJ Reserves and Resources Report. There
is no certainty that any portion of the prospective resources will
be discovered and even if discovered, there is no certainty that it
will be commercially viable to produce any portion. Estimates
of prospective resources involve additional risks over estimates of
reserves. The accuracy of any resources estimate is a function of
the quality and quantity of available data and of engineering
interpretation and judgment. While resources presented herein are
considered reasonable, the estimates should be accepted with the
understanding that reservoir performance subsequent to the date of
the estimate may justify revision, either upward or downward. For
additional details with respect to Alvopetro's prospective
resources evaluated as at December 31,
2022, see our news release dated February 28, 2023 and additional details
contained in the Company's annual information form for the year
ended December 31, 2022 which has
been filed on SEDAR (www.sedar.com).
Other Metrics
This press release contains metrics commonly used in the oil and
natural gas industry, which have been prepared by management,
including "F&D costs", "net asset value", "net asset value per
share", "production replacement ratio" and "recycle ratio". These
terms do not have a standardized meaning and may not be comparable
to similar measures presented by other companies, and therefore
should not be used to make such comparisons.
"F&D costs" are reflected on a per barrel of oil equivalent
and are calculated as the sum of capital expenditures in the
current year plus the change in FDC for the period, divided by the
change in reserves in the period, before current year
production. The 2022 F&D costs are computed as
follows:
2022 capital
expenditures
|
24,795
|
Change in FDC from
2021(1)
|
10,540
|
Total
|
35,335
|
Change in 2P reserves
before 2022 production(2) – Mboe
|
1,233
|
2022 F&D costs
(per boe)
|
$28.66
|
(1) Computed
based on FDC costs from the 2P reserves in the December 31, 2022
GLJ Reserves and Resources Report less FDC costs from the December
31, 2021 GLJ Reserves and Resources Report.
|
(2) Computed as
the change in 2P reserves from December 31, 2021 to December 31,
2022 (which increased 300 Mboe, from 8,737 Mboe to 9,037 Mboe) plus
2022 total production of 933 Mboe.
|
"Net asset value" is based on the before tax net present value of
the Company's reserves as at December 31,
2022, discounted at 10% plus the Company's net working
capital balance as of December 31,
2022. Net working capital is a capital management measure.
See "Non-GAAP and Other Financial Measures" below for
further details.
"Net asset value per share" is based on the computation of net
asset value divided by basic shares outstanding of 36,311,579
adjusted to Canadian dollars based on the foreign exchange rate on
March 21, 2023.
"Production replacement ratio" is calculated as total reserve
additions divided by current year production. Alvopetro's 2P
production replacement ratio in 2022 is calculated as:
2P reserve additions
(1) – Mboe
|
1,233
|
2022 production –
Mboe
|
933
|
2022 2P production
replacement ratio
|
132 %
|
(1) See
computation in F&D costs above.
|
"Recycle ratio" is calculated by dividing the 2022 operating
netback by F&D costs per boe for the year. The Company's 2022
recycle ratio is calculated as follows:
2022 operating netback
– $ per boe
|
$59.43
|
2022 F&D costs – $
per boe – see computation above
|
$28.66
|
2P recycle
ratio
|
2.1
|
Management uses these oil and gas metrics for its own performance
measurements and to provide shareholders with measures to compare
our operations over time. Readers are cautioned that the
information provided by these metrics, or that can be derived from
the metrics presented in this press release, should not be relied
upon for investment or other purposes.
Non-GAAP and Other Financial Measures
This news release contains references to various non-GAAP
financial measures, non-GAAP ratios, capital management measures
and supplementary financial measures as such terms are defined in
National Instrument 52-112 Non-GAAP and Other Financial Measures
Disclosure. Such measures are not recognized measures under
GAAP and do not have a standardized meaning prescribed by IFRS and
might not be comparable to similar financial measures disclosed by
other issuers. While these measures may be common in the oil and
gas industry, the Company's use of these terms may not be
comparable to similarly defined measures presented by other
companies. The non-GAAP and other financial measures referred to in
this report should not be considered an alternative to, or more
meaningful than measures prescribed by IFRS and they are not meant
to enhance the Company's reported financial performance or
position. These are complementary measures that are used by
management in assessing the Company's financial performance,
efficiency and liquidity and they may be used by investors or other
users of this document for the same purpose. Below is a description
of the non-GAAP financial measures, non-GAAP ratios, capital
management measures and supplementary financial measures used in
this news release. For more information with respect to financial
measures which have not been defined by GAAP, including
reconciliations to the closest comparable GAAP measure, see the
"Non-GAAP Measures and Other Financial Measures" section of
the Company's MD&A which may be accessed through the SEDAR
website at www.sedar.com.
Non-GAAP Financial Measures
Operating netback
Operating netback is calculated as natural gas, oil and
condensate revenues less royalties and production expenses. This
calculation is provided in the "Operating Netback" section
of the Company's MD&A using our IFRS measures. The Company's
MD&A may be accessed through the SEDAR website at
www.sedar.com. Operating netback is a common metric used in the oil
and gas industry used to demonstrate profitability from
operations.
Non-GAAP Financial Ratios
Operating netback per boe
Operating netback is calculated on a per unit basis, which is
per barrel of oil equivalent ("boe"). It is a common non-GAAP
measure used in the oil and gas industry and management believes
this measurement assists in evaluating the operating performance of
the Company. It is a measure of the economic quality of the
Company's producing assets and is useful for evaluating variable
costs as it provides a reliable measure regardless of fluctuations
in production. Alvopetro calculated operating netback per boe as
operating netback divided by total sales volumes (barrels of oil
equivalent). This calculation is provided in the "Operating
Netback" section of the Company's MD&A using our IFRS
measures. The Company's MD&A may be accessed through the SEDAR
website at www.sedar.com. Operating netback is a common metric used
in the oil and gas industry used to demonstrate profitability from
operations on a per unit basis (boe).
Operating netback margin
Operating netback margin is calculated as operating netback per
boe divided by the realized sales price per boe. Operating netback
margin is a measure of the profitability per boe relative to
natural gas, oil and condensate sales revenues per boe and is
calculated as follows:
|
Three Months
Ended
December
31,
|
Year
Ended
December
31,
|
|
2022
|
2021
|
2022
|
2021
|
Operating netback - $
per boe
|
60.08
|
36.38
|
59.43
|
33.39
|
Average realized price
- $ per boe
|
68.13
|
44.22
|
68.04
|
40.64
|
Operating netback
margin
|
88 %
|
82 %
|
87 %
|
82 %
|
Funds Flow from Operations Per Share
Funds flow from operations per share is a non-GAAP ratio that
includes all cash generated from operating activities and is
calculated before changes in non-cash working capital, divided by
the weighted the weighted average shares outstanding for the
respective period. For the periods reported in this news release
the cash flows from operating activities per share and funds flow
from operations per share is as follows:
|
Three Months
Ended
December
31,
|
Year
Ended
December
31,
|
$ per
share
|
2022
|
2021
|
2022
|
2021
|
Per basic
share:
|
|
|
|
|
Cash flows from
operating activities
|
0.34
|
0.21
|
1.37
|
0.73
|
Funds flow from
operations
|
0.36
|
0.19
|
1.44
|
0.74
|
|
|
|
|
|
Per diluted
share:
|
|
|
|
|
Cash flows from
operating activities
|
0.33
|
0.20
|
1.29
|
0.70
|
Funds flow from
operations
|
0.35
|
0.18
|
1.35
|
0.71
|
Capital Management Measures
Funds Flow from Operations
Funds flow from operations is a non-GAAP capital management
measure that includes all cash generated from operating activities
and is calculated before changes in non-cash working capital. The
most comparable GAAP measure to funds flow from operations is cash
flows from operating activities. Management considers funds flow
from operations important as it helps evaluate financial
performance and demonstrates the Company's ability to generate
sufficient cash to fund future growth opportunities. Funds flow
from operations should not be considered an alternative to, or more
meaningful than, cash flows from operating activities however
management finds that the impact of working capital items on the
cash flows reduces the comparability of the metric from period to
period. A reconciliation of funds flow from operations to cash
flows from operating activities is as follows:
|
Three Months
Ended
December
31,
|
Year
Ended
December
31,
|
|
2022
|
2021
|
2022
|
2021
|
Cash flows from
operating activities
|
12,366
|
7,088
|
47,534
|
24,291
|
Add back changes in
non-cash working capital
|
827
|
(608)
|
2,345
|
346
|
Funds flow from
operations
|
13,193
|
6,480
|
49,879
|
24,637
|
Net Working Capital
Net working capital is computed as current assets less current
liabilities. Net working capital is a measure of liquidity, is used
to evaluate financial resources, and is calculated as
follows:
|
|
As at December
31,
|
|
|
2022
|
2021
|
Total current
assets
|
|
27,627
|
17,188
|
Total current
liabilities
|
|
(12,929)
|
(8,091)
|
Net working capital
surplus
|
|
14,698
|
9,097
|
Working Capital Net of Debt
Working capital net of debt is computed as net working capital
surplus decreased by the carrying amount of the Credit Facility.
Working capital net of debt is used by management to assess the
Company's overall financial position.
|
|
As at December
31,
|
|
|
2022
|
2021
|
Net working capital
surplus
|
|
14,698
|
9,097
|
Credit Facility,
balance outstanding
|
|
-
|
(6,545)
|
Working capital, net of
debt
|
|
14,698
|
2,552
|
Supplementary Financial Measures
"Average realized natural gas price - $/Mcf" is comprised
of natural gas sales as determined in accordance with IFRS, divided
by the Company's natural gas sales volumes.
"Average realized NGL – condensate price - $/bbl" is
comprised of condensate sales as determined in accordance with
IFRS, divided by the Company's NGL sales volumes from
condensate.
"Average realized oil price - $/bbl" is comprised of oil
sales as determined in accordance with IFRS, divided by the
Company's oil sales volumes.
"Average realized price - $/boe" is comprised of natural
gas, condensate and oil sales as determined in accordance with
IFRS, divided by the Company's total natural gas, condensate and
oil sales volumes (barrels of oil equivalent).
"Royalties per boe" is comprised of royalties, as
determined in accordance with IFRS, divided by the total natural
gas, condensate and oil sales volumes (barrels of oil
equivalent).
"Production expenses per boe" is comprised of production
expenses, as determined in accordance with IFRS, divided by the
total natural gas, condensate and oil sales volumes (barrels of oil
equivalent).
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 (6 Mcf/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.
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 statements concerning plans
relating to the Company's operational activities, proposed
exploration development activities and the timing for such
activities, exploration and development prospects of
Alvopetro, capital spending levels, future capital and
operating costs, timing and taxation of dividends and plans for
dividends in the future, plans for share repurchases under the NCIB
and the duration of the NCIB, future production and sales
volumes, the expected natural gas price, gas sales and gas
deliveries under Alvopetro's long-term gas sales agreement, the
expected timing of production commencement from the 197(1) well,
the proposed automatic share purchase plan, and projected financial
results. Forward-looking statements are necessarily based upon
assumptions and judgments with respect to the future including, but
not limited to, expectations and assumptions concerning the timing
of regulatory licenses and approvals, equipment availability, the
success of future drilling, completion, testing, recompletion and
development activities and the timing of such activities, the
performance of producing wells and reservoirs, well development and
operating performance, expectations regarding Alvopetro's working
interest and the outcome of any redeterminations, environmental
regulation, including regulation relating to hydraulic fracturing
and stimulation, the ability to monetize hydrocarbons discovered,
the outlook for commodity markets and ability to access capital
markets, foreign exchange rates, general economic and business
conditions, forecasted demand for oil and natural gas, the impact
of the COVID-19 pandemic, weather and access to drilling locations,
the availability and cost of labour and services, 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. In addition, the
declaration, timing, amount and payment of future dividends remain
at the discretion of the Board of Directors. Although we believe
that the expectations and assumptions on which the forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements because we can give no
assurance that they will prove to be correct. Since forward looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, risks associated with the oil and gas industry in
general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, reliance on industry
partners, availability of equipment and personnel, uncertainty
surrounding timing for drilling and completion activities resulting
from weather and other factors, changes in applicable regulatory
regimes and health, safety and environmental risks), commodity
price and foreign exchange rate fluctuations, market uncertainty
associated with financial institution instability, and general
economic conditions. 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.
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.