Alvopetro Energy Ltd. press release

Alvopetro Announces Q3 2026 Financial Results and an Operational Update Including 183-G2 Well Results

2026-11-05

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

Canada NewsWire

CALGARY, AB, Nov. 5, 2026/CNW/ -- Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) ("Alvopetro" or the "Company") announces an operational update including initial results from our 183-G2 well, our financial results for the three and nine months ended September 30, 2026, and updated details for our Q3 2026 earnings call.

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 delivered another strong quarter with sales volumes of 2,966 boepd, revenues of $19.3 million and funds flow from operations of $14.3 million. With a realized natural gas price of $11.49/Mcf we posted an operating netback of $60.87/boe with an 86% operating netback margin. Based on open hole logs our most recently drilled Murucututu well, 183-G2, has encountered 97 metres of potential net pay, 65 metres updip of our highly successful 183-D4 well. We plan to complete the well concurrent with our facility expansions that will position us to unlock our longer-term growth potential at Murucututu."

Operational Update

Development Activities and Recent Updates - Brazil

On our 100% Murucututu natural gas field, we have now completed drilling the 183-G2 well on our 100% owned Murucututu natural gas field. The 183-G2 well was drilled to a total measured depth of 3,189.8 metres. Based on open-hole logs, the well encountered potential net natural gas pay in the Caruaçu Member of the Maracangalha Formation, totaling 96.9 metres total vertical depth of potential natural gas pay, with average porosity of 11.7% and average water saturation of 29.7%, using a 6% porosity cut-off, 50% Vshale cut-off and 50% water saturation cutoff. The well was drilled from our newly constructed 183-G well pad which is being tied into our Murucututu field production facility. The tie in is expected to be completed in early 2027 at which point we will complete the well in up to 13 intervals with a plan to bring the well on production in Q1 2027.

We completed the 183-H2 well on our Murucututu field in five intervals. The well went through an initial 4-day cleanup period, flowing at an average rate of 17.2 e3m3/d (0.6 MMcfpd, 101 boepd) at a 3,146 kPa (457 psi) flowing wellhead pressure, recovering 2,280 barrels of completions fluids and 102 barrels of natural gas liquids. After this initial cleanup period the well was aligned to our field production system, where we have flowed into our gas gathering system for 14 days at a constant 28/64" choke at an average rate of 19.1 e3m3/d (0.7 MMcfpd, 112 boepd) with a 4,445 kPa (645 psi) flowing wellhead pressure. During this period, we also recovered a total of 1,179 barrels of completions fluids and 725 barrels of natural gas liquids. Average natural gas liquids (condensate) production during the flow period was 52 boepd. To-date, we have recovered 24% of completions fluids with 11,141 of 14,600 barrels left to recover.

In parallel, we have been advancing our Murucututu facilities upgrades to expand the field's production facility and pipeline offtake capacity from 150 e3m3/d to 600 e3m3/d and are expecting the project to be completed in early 2027.

At Caburé, we plan to sidetrack one unfinished well from the 2025 capital program later this quarter.

In October Alvopetro was awarded four blocks in the 6thCycle of the Permanent Concession Offer of the ANP in Brazil, agreeing to minimum work commitments totaling BRL 8.3 million ($1.7 million) and aggregate signing bonuses of BRL 0.6 million ($0.1 million). The four blocks cover over 462 km2 and are all located in the Tucano Basin north of our core operating area increasing Alvopetro's acreage in Brazil by over 700%. The blocks acquired include three exploration blocks with work commitments to be completed over six years and one mature field with work commitments to be completed over three years.

Development Activities and Recent Updates – Canada

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

On our 2026 farmin agreement (the "2026 Farmin") announced in September we expect to commence drilling the first of five earnings wells (the "Earning Wells") in the coming days and are targeting completion of all wells by early 2027. Alvopetro is responsible for 100% of the costs of the five Earning Wells, estimated at C$8.5 million. As the Earning Wells are drilled, Alvopetro will earn a 50% interest in surrounding undeveloped lands. Once all Earning Wells have been drilled, the 2026 Farmin is expected to add a 50% working interest in 28 gross (14 net) sections of land, increasing Alvopetro's total land position in Canada to 133.5 gross sections (43,829 net acres).

October Sales Volumes

October sales volumes averaged 3,200 boepd (based on field estimates), including 3,095 boepd from Brazil (with natural gas sales of 17.3 MMcfpd, associated natural gas liquids from condensate of 178 bopd and oil sales of 35 bopd) and 105 bopd from oil sales in Canada.

| Natural gas, NGLs and crude oil sales: | October

2026 | September

2026 | Q3

2026 | | Brazil: | | | | | Natural gas (Mcfpd), by field: | | | | | Caburé | 13,115 | 10,279 | 12,256 | | Murucututu | 4,179 | 3,797 | 3,663 | | Total natural gas (Mcfpd) | 17,294 | 14,076 | 15,919 | | NGLs (bopd) | 178 | 162 | 178 | | Oil (bopd)(1) | 35 | - | 3 | | Total (boepd) – Brazil | 3,095 | 2,508 | 2,834 | | Canada: | | | | | Oil (bopd) – Canada | 105 | 119 | 132 | | Total Company – boepd(2) | 3,200 | 2,627 | 2,966 |

| (1) | Oil sales volumes in Brazil relate to the Bom Lugar and Mãe da lua fields. Alvopetro has entered into an assignment agreement to dispose of the fields, the closing of which is subject to standard regulatory approvals, including approval of the ANP. | | (2) | Alvopetro reported volumes are based on sales volumes which, due to the timing of sales deliveries, may differ from production volumes. |

Quarterly Natural Gas Pricing Update

Effective November 1, 2026, our natural gas price under our long-term gas sales agreement was adjusted to BRL1.97/m3 on the first 400e3m3/d (14.1 MMcfpd) reference volumes ("QDC1") with the incremental 100 e3m3/d (3.5 MMcfpd) reference volumes ("QDC2") adjusted to BRL1.84/m3.

Based on our average heat content to-date and the October 30, 2026 BRL/USD exchange rate of 5.42, our weighted average realized price (QDC1 + QDC2) on firm natural gas sales during the November 1, 2026 to January 31, 2027 period is expected to be $11.10/Mcf, a decrease of 3% from our Q3 2026 realized price of $11.49/Mcf. Amounts ultimately received in equivalent USD will be impacted by exchange rates in effect during the relevant period.

Financial and Operating Highlights – Third Quarter of 2026

Average daily sales in Brazil in Q3 2026 were 2,834 boepd(1)(+29% from Q3 2025 and -2% from Q2 2026). Brazil sales volumes were impacted by a scheduled shutdown to complete a planned upgrade of our gas processing facility. In Canada, daily sales averaged 132 bopd(1)(+4% from Q3 2025 and -24% from Q2 2026). Overall, total daily sales averaged 2,966 boepd (+27% compared to Q3 2025 and -3% compared to Q2 2026). Our average realized natural gas price was $11.49/Mcf (+4% from Q3 2025 and +5% from Q2 2026). Our overall average realized sales price was $70.62/boe (+7% from Q3 2025 and +3% from Q2 2026). Our natural gas, oil and condensate revenue increased to $19.3 million, an increase of 36% from Q3 2025 due to higher sales volumes and higher realized sales prices. Our natural gas, oil and condensate revenue increased $0.1 million from Q2 2026 despite the 2% reduction in sales volumes due to higher realized sales prices. Our operating netback(2)in the quarter was $60.87 per boe, increases of $4.97 per boe compared to Q3 2025 and $1.79 per boe compared to Q2 2026. We generated funds flow from operations(2)of $14.3 million ($0.38 per basic share and $0.37 per diluted share), increases of $3.9 million compared to Q3 2025 and $0.2 million compared to Q2 2026. The increase relative to Q3 2025 was driven by higher sales volumes and higher realized sales prices. The increase relative to Q2 2026 was due to higher realized sales prices. We reported net income of $8.5 million ($0.23 per basic share and $0.22 per diluted share), an increase of $3.9 million compared to Q3 2025 and a decrease of $1.2 million compared to Q2 2026. Capital expenditures in Q3 2026 of $16.1 million were focused on drilling, completion and facilities projects on our 100% owned Murucututu natural gas field as well as initial drilling costs for our share of two wells drilled on our existing land base in Saskatchewan. Our working capital(2)was $2.5 million as of September 30, 2026 and our net debt(2)was $1.5 million. In September 2026, Alvopetro announced the 2026 Farmin wherein Alvopetro agreed to fund 100% of the costs to drill, complete and equip the five Earning Wells commencing in the fourth quarter of 2026 to earn a 50% working interest in 28 sections (14 net) of land in Western Canada.

| (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

September 30, | As at and Nine Months Ended

September 30, | | | | | | | | 2026 | 2025 | Change (%) | 2026 | 2025 | Change (%) | | | Financial | | | | | | | | | ($000s, except where noted) | | | | | | | | | Natural gas, oil and condensate sales | 19,271 | 14,175 | 36 | 55,843 | 42,198 | 32 | | | Net income | 8,548 | 4,613 | 85 | 26,371 | 17,513 | 51 | | | Per share – basic ($)(1) | 0.23 | 0.12 | 92 | 0.70 | 0.47 | 49 | | | Per share – diluted ($)(1) | 0.22 | 0.12 | 83 | 0.69 | 0.46 | 5 | | | Cash flows from operating activities | 16,101 | 12,153 | 32 | 40,737 | 31,443 | 30 | | | Per share – basic ($)(1)(2) | 0.43 | 0.33 | 30 | 1.08 | 0.84 | 29 | | | Per share – diluted ($)(1)(2) | 0.42 | 0.32 | 31 | 1.06 | 0.83 | 28 | | | Funds flow from operations(2) | 14,307 | 10,448 | 37 | 40,910 | 30,036 | 36 | | | Per share – basic ($)(1)(2) | 0.38 | 0.28 | 36 | 1.09 | 0.81 | 35 | | | Per share – diluted ($)(1)(2) | 0.37 | 0.28 | 32 | 1.07 | 0.79 | 35 | | | Dividends declared | 4,483 | 3,673 | 22 | 13,368 | 10,976 | 22 | | | Per share(1) | 0.12 | 0.10 | 20 | 0.36 | 0.30 | 20 | | | Capital expenditures | 16,084 | 11,249 | 43 | 28,752 | 28,610 | - | | | Cash and cash equivalents | 32,628 | 12,081 | 170 | 32,628 | 12,081 | 170 | | | Working capital(2) | 2,517 | 2,209 | 14 | 2,517 | 2,209 | 14 | | | Working capital, net of debt (net debt)(2) | (1,483) | 2,209 | (167) | (1,483) | 2,209 | (167) | | | Weighted average shares outstanding | | | | | | | | | Basic (000s)(1) | 37,866 | 37,263 | 2 | 37,676 | 37,273 | 1 | | | Diluted (000s)(1) | 38,489 | 37,851 | 2 | 38,303 | 37,801 | 1 | | | Operations | | | | | | | | | Average daily sales volumes(3) | | | | | | | | | Brazil: | | | | | | | | | Natural gas (Mcfpd), by field: | | | | | | | | | Caburé (Mcfpd) | 12,256 | 8,735 | 40 | 11,998 | 10,741 | 12 | | | Murucututu (Mcfpd) | 3,663 | 3,558 | 3 | 4,242 | 2,286 | 86 | | | Total natural gas (Mcfpd) | 15,919 | 12,293 | 29 | 16,240 | 13,027 | 25 | | | NGLs – condensate (bopd) | 178 | 147 | 21 | 174 | 137 | 27 | | | Oil (bopd) | 3 | 9 | (67) | 7 | 8 | (13) | | | Total (boepd) - Brazil | 2,834 | 2,205 | 29 | 2,887 | 2,315 | 25 | | | | | | | | | | | | Canada: | | | | | | | | | Oil (bopd) - Canada | 132 | 138 | (4) | 166 | 93 | 78 | | | | | | | | | | | | Total Company (boepd) | 2,966 | 2,343 | 27 | 3,053 | 2,408 | 27 | | | | | | | | | | | | Average realized prices(2) | | | | | | | | | Natural gas ($/Mcf) | 11.49 | 11.04 | 4 | 10.87 | 10.69 | 2 | | | NGLs – condensate ($/bbl) | 97.60 | 74.16 | 32 | 95.09 | 75.83 | 25 | | | Oil ($/bbl) | 68.40 | 50.42 | 36 | 66.84 | 49.36 | 35 | | | Total ($/boe) | 70.62 | 65.76 | 7 | 66.99 | 64.19 | 4 | | | | | | | | | | | | Operating netback ($/boe)(2) | | | | | | | | | Realized sales price | 70.62 | 65.76 | 7 | 66.99 | 64.19 | 4 | | | Royalties | (3.68) | (3.54) | 4 | (3.97) | (4.71) | (16) | | | Production expenses | (5.92) | (6.10) | (3) | (5.51) | (5.58) | (1) | | | Transportation expenses | (0.15) | (0.22) | (32) | (0.19) | (0.12) | 58 | | | Operating netback | 60.87 | 55.90 | 9 | 57.32 | 53.78 | 7 | | | Operating netback margin(2) | 86 % | 85 % | 1 | 86 % | 84 % | 2 | | | | | | | | | | |

| 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. |

Q3 2026 Results Webcast

Alvopetro will host a live webcast to discuss our Q3 2026 financial results on Friday, November 6, 2026. We have adjusted the start time of the webcast to 9:00 am Alberta time (8:00 AM Mountain Time (Denver)/10:00 am Eastern Time). Details for joining the webcast are as follows:

DATE: November 6, 2026 TIME: 9:00 AM Alberta Time/8:00 AM Mountain Time (Denver)/10:00 AM Eastern Time LINK: https://us06web.zoom.us/j/83624380517 DIAL-IN NUMBERS:https://us06web.zoom.us/u/kb4IkSIh5X WEBINAR ID:836 2438 0517

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.

Long-term Incentive Grants

In connection with our long-term incentive compensation program, Alvopetro's Board of Directors (the "Board") has approved annual rolling grants to officers, directors and certain employees under Alvopetro's Omnibus Incentive Plan. A total of 142,200 restricted share units ("RSUs") and 36,500 deferred share units ("DSUs") were approved by the Board and are expected to be granted on November 10, 2026. Of the total grants, 97,500 RSUs and 36,500 DSUs will be granted to officers and directors. Each RSU and DSU entitles the holder to purchase one common share. All RSUs and DSUs granted expire five (5) years from the date of the grant.

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 | | $000s | = | thousands of USD | | boepd | = | barrels of oil equivalent ("boe") per day | | bopd | = | barrels of oil and/or natural gas liquids (condensate) per day | | BRL | = | Brazilian Real | | C$ | = | Canadian dollars | | e3m3/d | = | thousand cubic metres per day | | m3 | = | cubic metres | | m3/d | = | cubic metres 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) | | Q2 2026 | = | three months ended June 30, 2026 | | Q3 2025 | = | three months ended September 30, 2025 | | Q3 2026 | = | three months ended September 30, 2026 | | 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 a non-GAAP ratio 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: