Alvopetro Energy Ltd. press release

Alvopetro Announces Year End 2025 Financial Results, Q1 2026 Dividend of US$0.12/share, and Filing of our AIF

2026-03-17

TSXV - TSX Venture Exchange · Natural Gas · Natural Gas Liquids · Oil · Canada · Corporate Finance

Canada NewsWire

CALGARY, AB, March 17, 2026/CNW/ - Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) ("Alvopetro" or the "Company") announces an operational update, our financial results for the year ended December 31, 2025, a quarterly dividend of US$0.12 per common share and filing of our annual information form. We will be hosting a live webcast to discuss our Q4 2025 results on Wednesday March 18, 2026 at 8:00 a.m. Mountain time.

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:

"2025 was a transformational year for Alvopetro. Mainly off the success of our 183-D4 well on our 100% owned Murucututu asset, year-over-year we increased average daily sales by 41% to 2,523 boepd and grew 2P reserves by 43% to 13.1 MMboe, replacing production over 5 times. With record production to start the year, we are well positioned for another exceptional year in 2026."

Operational Update

Following the success of our 183-D4 well on our 100% owned Murucututu field, we are now focused on enhancing and expanding our capacity to deliver additional Murucututu production, positioning this asset for sustained multi-year growth. We plan to expand our Murucututu field production facility and pipelines to support an increase in our Murucututu field capacity from our current level of approximately 150 e3m3/d up to 600 e3m3/d. Simultaneously, we plan to enhance our gas processing capabilities at UPGN Caburé to accommodate higher proportions of richer gas from Murucututu, and also targeting an overall capacity of up to 600 e3m3/d.

On the drilling and completions front, on our 100% owned Murucututu field, we have just recompleted our 183-1 well in a lower portion of the Gomo Formation and are working to bring the well back online. Upcoming plans on the field in 2026 involve drilling and completing a new well in the Caruaçu Formation, as well as permitting a new drilling pad to support future Caruaçu development updip of the successful 183-D4 well. We expect drilling to commence next month. At Caburé (56.2% working interest), 2026 capital plans include the sidetrack of one unfinished well from 2025.

In Canada, we have completed drilling two (1.0 net) additional wells in 2026 . One (0.5 net) well requires remedial action but we now have 7 (3.5 net) wells on production. We have also added an additional 5 gross sections of land in one of our core-areas bringing our land position to 80.5 gross sections (25,760 net acres) targeting the Mannville stack heavy oil play fairway with over 100 Tier 1 drilling locations.

On February 25, 2026, we announced our December 31, 2025 reserves based on the independent reserve assessment and evaluation prepared by GLJ Ltd. ("GLJ") dated February 25, 2026 with an effective date of December 31, 2025 (the "GLJ Reserves and Resources Report"). Highlights include:

1P reserves increased 79% to 8.1 MMboe after 2025 production of 0.9 MMboe, representing a 1P production replacement ratio(1)of 485%. The increase was mainly due to results from our 183-D4 well on our Murucututu field which commenced production in August 2025 and added an additional five proved undeveloped locations to our 1P reserves as well as newly added Canadian reserves of 0.3 MMboe. 2P reserve volumes increased 43% to 13.1 MMboe, representing a 2P production replacement ratio of 530%(1). Success on our 183-D4 well also contributed to the bulk of the increase to 2P reserves which includes eight undeveloped locations. In Canada, 0.7 MMboe of 2P reserves were assigned. With increased reserve volumes, 1P net present value before tax, discounted at 10% ("NPV10") increased 38% to $245.6 million and 2P NPV10 increased 20% to $393.6 million. 2P reserves life index(1)of 12.5 years. 2P F&D costs(1)of $15.42/boe with a 2P recycle ratio(1)of 3.4 times. Risked best estimate contingent resources decreased by 0.7 MMboe from 4.5 MMboe to 3.8 MMboe at December 31, 2025 with a NPV10 of $88.0 million, decreases from December 31, 2024 of 16% and 20% respectively. The decreases were associated with the migration of contingent resources to Reserves for the Caruaçu Formation at Murucututu. Risked best estimate prospective resources increased from 10.2 MMboe to 12.1 MMboe with a NPV10 of $264.3 million, increases of 19% and 27% respectively from December 31, 2024. The increases were mainly due to additional prospective resource in the Caruaçu Formation at Murucututu adjacent to the assigned reserves area.

| (1) | Refer to the sections entitled "Oil and Natural Gas Advisories – Other Metrics" for additional disclosures and assumptions used in calculating production replacement ratio, 2P reserves life index, 2P F&D costs and 2P recycle ratio. |

Financial and Operating Highlights – Fourth Quarter of 2025

Average daily sales in Q4 2025 were 2,867 boepd(1)(+65% from Q4 2024 and +22% from Q3 2025). In Brazil, daily sales averaged 2,719 boepd (+56% compared to Q4 2024 and +23% from Q3 2025) and in Canada, oil sales averaged 148 bopd in the quarter (+7% from Q3 2025). Our average realized natural gas price was $9.97/Mcf (-5% from Q4 2024 and -10% from Q3 2025). Our overall average realized sales price per boe was $59.75/boe (-6% from Q4 2024 and -9% from Q3 2025). Our natural gas, oil and condensate revenue increased to $15.8 million (+54% from Q4 2024 and +11% from Q3 2025). The increases compared to Q4 2024 and Q3 2025 were driven by higher sales volumes, partially offset by lower realized prices. Our operating netback(2)in the quarter was $49.70 per boe, a decrease of $5.39 per boe compared to Q4 2024 and a decrease of $6.20 per boe compared to Q3 2025 due mainly to lower realized prices and higher royalties. We generated funds flows from operations(2)of $10.6 million ($0.28 per basic and per diluted share), increases of $3.6 million compared to Q4 2024 and $0.1 million compared to Q3 2025. We reported net income of $5.6 million ($0.15 per basic and diluted share), an increase of $3.3 million compared to Q4 2024. In October 2025, Alvopetro entered into an expanded area of mutual interest (the "Expanded AMI") with our existing partner in Saskatchewan. Under the terms of the Expanded AMI, Alvopetro agreed to fund 100% of the costs for drilling two earning wells in exchange for a 50% working interest in an additional 46.9 sections of land (15,010 net acres). The two earning wells were drilled in Q4 2025. Capital expenditures in Q4 2025 of $4.9 million included the cost of these two earning wells and a seismic program in Saskatchewan, additional Unit development costs to tie in the wells drilled earlier in the year as well as costs for facilities improvements at the Unit and Murucututu. During the quarter Alvopetro entered into a $20 million loan agreement (the "Loan"). The Loan has a two-year term and bears interest at 7% per annum (payable quarterly), including all applicable charges and fees. Repayments of the Loan commence quarterly on November 30, 2026, ending on November 29, 2027. Our working capital(2)surplus was $18.5 million as of December 31, 2025. Our working capital surplus net of debt was $2.5 million as of December 31, 2025.

Financial and Operating Highlights – Year Ended December 31, 2025

Our annual sales volumes averaged 2,523 boepd, an increase of 41% from 2024, with Brazil sales volumes of 2,417 boepd (+35% from 2024) and 106 bopd from the newly added Canadian operations. We reported net income of $23.1 million, compared to $16.3 million in 2024 (+42%). We generated funds flow from operations(1) of $40.6 million ($1.09 per basic share and $1.08 per diluted share), an increase of $7.3 million (+22%) compared to 2024. Capital expenditures totaled $33.5 million in 2025. Dividends declared totaled $0.42 per share in 2025 compared to $0.36 per share in 2024 (+17%).

(1) Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. (2) See "_Non-GAAP and Other Financial Measures_" section within this news release.

The following table provides a summary of Alvopetro's financial and operating results for the periods noted. The consolidated financial statements with the Management's Discussion and Analysis ("MD&A") are available on our website at www.alvopetro.comand will be available on the SEDAR+ website at www.sedarplus.ca.

| | As at and Three Months Ended

December 31, | As at and Year Ended

December 31, | | | | | | | 2025 | 2024 | Change (%) | 2025 | 2024 | Change (%) | | Financial | | | | | | | | ($000s, except where noted) | | | | | | | | Natural gas, oil and condensate sales | 15,756 | 10,214 | 54 | 57,954 | 45,517 | 27 | | Net income | 5,585 | 2,243 | 149 | 23,098 | 16,295 | 42 | | Per share – basic ($)(1) | 0.15 | 0.06 | 150 | 0.62 | 0.44 | 41 | | Per share – diluted ($)(1) | 0.15 | 0.06 | 150 | 0.61 | 0.43 | 42 | | Cash flows from operating activities | 9,362 | 7,114 | 32 | 40,805 | 34,901 | 17 | | Per share – basic ($)(1) | 0.25 | 0.19 | 32 | 1.09 | 0.94 | 16 | | Per share – diluted ($)(1) | 0.25 | 0.19 | 32 | 1.08 | 0.93 | 16 | | Funds flow from operations(2) | 10,561 | 6,966 | 52 | 40,597 | 33,275 | 22 | | Per share – basic ($)(1) | 0.28 | 0.19 | 47 | 1.09 | 0.89 | 22 | | Per share – diluted ($)(1) | 0.28 | 0.19 | 47 | 1.08 | 0.89 | 21 | | Dividends declared | 4,408 | 3,283 | 34 | 15,384 | 13,170 | 17 | | Per share(1) (2) | 0.12 | 0.09 | 33 | 0.42 | 0.36 | 17 | | Capital expenditures | 4,883 | 4,682 | 4 | 33,493 | 15,305 | 119 | | Cash and cash equivalents | 32,372 | 21,697 | 49 | 32,372 | 21,697 | 49 | | Net working capital(2) | 18,450 | 13,181 | 40 | 18,450 | 13,181 | 40 | | Working capital, net of debt(2) | 2,450 | 13,181 | (81) | 2,450 | 13,181 | (81) | | Weighted average shares outstanding | | | | | | | | Basic (000s)(1) | 37,260 | 37,315 | - | 37,270 | 37,289 | - | | Diluted (000s)(1) | 37,717 | 37,566 | - | 37,666 | 37,558 | - | | Operations | | | | | | | | Average daily sales volumes(3): | | | | | | | | Brazil: | | | | | | | | Natural gas (Mcfpd), by field: | | | | | | | | Caburé (Mcfpd) | 9,655 | 7,476 | 29 | 10,467 | 9,228 | 13 | | Murucututu (Mcfpd) | 5,437 | 2,231 | 144 | 3,080 | 928 | 232 | | Total natural gas (Mcfpd) | 15,092 | 9,707 | 55 | 13,547 | 10,156 | 33 | | NGLs – condensate (bopd) | 184 | 109 | 69 | 149 | 90 | 66 | | Oil (bopd) | 19 | 11 | 73 | 11 | 12 | (8) | | Total (boepd) - Brazil | 2,719 | 1,738 | 56 | 2,417 | 1,794 | 35 | | | | | | | | | | Canada: | | | | | | | | Oil (bopd) - Canada | 148 | - | - | 106 | - | - | | | | | | | | | | Total Company (boepd) | 2,867 | 1,738 | 65 | 2,523 | 1,794 | 41 | | | | | | | | | | Average realized prices(2): | | | | | | | | Natural gas ($/Mcf) | 9.97 | 10.51 | (5) | 10.49 | 11.42 | (8) | | NGLs – condensate ($/bbl) | 69.18 | 75.95 | (9) | 73.75 | 84.84 | (13) | | Oil ($/bbl) | 47.99 | 61.74 | (22) | 48.86 | 66.94 | (27) | | Total ($/boe) | 59.75 | 63.88 | (6) | 62.92 | 69.31 | (9) | | | | | | | | | | Operating netback ($/boe)(2) | | | | | | | | Realized sales price | 59.75 | 63.88 | (6) | 62.92 | 69.31 | (9) | | Royalties | (3.83) | (2.15) | 78 | (4.46) | (1.99) | 124 | | Production expenses | (6.03) | (6.64) | (9) | (5.71) | (6.33) | (10) | | Transportation expenses | (0.19) | - | - | (0.14) | - | - | | Operating netback | 49.70 | 55.09 | (10) | 52.61 | 60.99 | (14) | | Operating netback margin(2) | 83 % | 86 % | (3) | 84 % | 88 % | (4) |

| 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. | | (3) | Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. |

Quarterly Dividend of US$0.12 per Share

Our Board of Directors has declared a quarterly dividend of US$0.12 per common share, payable in cash on April 15, 2026 to shareholders of record at the close of business on March 31, 2026. The 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.

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.sedarplus.caand on our website at www.alvopetro.com.

2025 Results Webcast

Alvopetro will host a live webcast to discuss our 2025 financial results at 8:00 am Mountain time on Wednesday March 18, 2026. Details for joining the event are as follows:

| DATE: | March 18, 2026 | | TIME: | 8:00 AM Mountain/10:00 AM Eastern | | LINK: | https://us06web.zoom.us/j/82316007995 | | DIAL-IN NUMBERS: | https://us06web.zoom.us/u/kdThlHQznI | | WEBINAR ID: | 823 1600 7995 |

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 tosocialmedia@alvopetro.com.

Corporate Presentation

Alvopetro's updated corporate presentation is available on our website at: http://www.alvopetro.com/corporate-presentation.

SocialMedia

Follow Alvopetro on our social media channels at the following links:

| X - | https://x.com/AlvopetroEnergy | | Instagram - | https://www.instagram.com/alvopetro/ | | LinkedIn - | https://www.linkedin.com/company/alvopetro-energy-ltd |

_Alvopetro Energy Ltd. __is deploying a balanced capital allocation model where we seek to reinvest roughly half our cash flows into organic growth opportunities and return the other half to stakeholders. Alvopetro's organic growth strategy is to focus on the best combinations of geologic prospectivity and fiscal regime. Alvopetro is balancing capital investment opportunities in Canada and Brazil where we are building off the strength of our Caburé and Murucututu natural gas fields and the related 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:

| $ or USD | = | | | | United States dollars | | $000s | = | | | | thousands of USD | | 1P | = | | | | proved reserves | | 2P | = | | | | proved plus probable reserves | | boepd | = | | | | barrels of oil equivalent ("boe") per day | | bopd | = | | | | barrels of oil and/or natural gas liquids (condensate) per day | | BRL | = | | | | Brazilian Real | | e3m3/d | = | | | | thousand cubic metre per day | | m3 | = | | | | cubic metre | | m3/d | = | | | | cubic metre per day | | Mcf | = | | | | thousand cubic feet | | Mcfpd | = | | | | thousand cubic feet per day | | MMcf | = | | | | million cubic feet | | MMcfpd | = | | | | million cubic feet per day | | NGLs | = | | | | natural gas liquids (condensate) | | NPV10 | = | | | | net present value before tax, discounted at 10% | | Q3 2025 | = | | | | three months ended September 30, 2025 | | Q4 2024 | = | | | | three months ended December 31, 2024 | | Q4 2025 | = | | | | three months ended December 31, 2025 | | GAAP or IFRS | = | | | | IFRS Accounting Standards |

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 news release 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 atwww.sedarplus.ca.

Non-GAAP Financial Measures

Operating Netback

Operating netback is calculated as natural gas, oil and condensate revenues less royalties, production expenses, and transportation 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.sedarplus.ca. 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 (boe). 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.sedarplus.ca.

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, | | | | | 2025 | 2024 | 2025 | 2024 | | Operating netback - $ per boe | 49.70 | 55.09 | 52.61 | 60.99 | | Average realized price - $ per boe | 59.75 | 63.88 | 62.92 | 69.31 | | Operating netback margin | 83 % | 86 % | 84 % | 88 % |

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 calculated before changes in non-cash working capital, divided by 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 are as follows: