Exclusive Interview with Alvopetro Energy CEO Corey Ruttan

October Sales Volumes

October sales volumes averaged 1,912 boepd, including natural gas sales of 10.7 MMcfpd, associated natural gas liquids sales from condensate of 108 bopd and oil sales of 14 bopd, based on field estimates.

Operational Update

On our Murucututu field, we finished the recompletion of our 183-A3 well in the third quarter. The well came on production during September and with this well on production through much of October, our natural gas sales from the Murucututu field increased 187% compared to Q3 2024. We are continuing to monitor production results from the well and we expect to drill a follow-up location up-dip from the 183-A3 well from a prebuilt well pad starting later this year.

In the fourth quarter we are planning an optimization project on our 183-B1 well which was originally drilled and tested in 2022.

Financial and Operating Highlights – Third Quarter of 2024

• Our average daily sales increased to 2,106 boepd in Q3 2024 (+24% from Q3 2023 and +29% from Q2 2024) with increased natural gas demand.
• Our average realized natural gas price decreased to $10.92 /Mcf (-16% from Q3 2023) in Q3 2024, due mainly to the devaluation of the BRL relative to the USD, which depreciated 14% compared to Q3 2023. Our overall averaged realized sales was $66.46 per boe.
• With higher overall sales volumes, our natural gas, condensate and oil revenue increased to $12.9 million , an increase of $0.6 million from Q3 2023 and $2.2 million from Q2 2024.
• Our operating netback ⁽²⁾ in the quarter was $59.19 per boe (- $11.15 per boe from Q3 2023) due mainly to the reduction in our realized sales price per boe.
• We generated funds flows from operations ⁽²⁾ of $9.9 million ( $0.27 per basic share and $0.26 per diluted share), an increase of $0.3 million compared to Q3 2023 and $2.0 million compared to Q2 2024 due mainly to higher sales volumes, partially offset by lower realized prices.
• We reported net income of $7.2 million in Q3 2024, an increase of $1.3 million compared to Q3 2023 and $4.8 million compared to Q2 2024 due mainly to higher sales volumes and foreign exchange gains in Brazil on U.S. dollar denominated intercompany balances and lease liabilities.
• Capital expenditures totaled $4.7 million , including costs to recomplete both the 183-A3 and the 183(1) wells on our Murucututu field and costs associated with the facilities upgrade at our Caburé field.
• Our working capital surplus was $15.8 million as of September 30, 2024 , increasing $2.7 million from December 31, 2023 and $1.2 million from June 30, 2024 .

The following table provides a summary of Alvopetro’s…