Welcome!

News Feed Item

Alvopetro Announces First Quarter Financial and Operating Results

CALGARY, ALBERTA -- (Marketwired) -- 05/22/14 -- Alvopetro Energy Ltd. (TSX VENTURE: ALV) is pleased to announce our first quarter 2014 financial and operating results.

Since creating Alvopetro as a standalone company in the fourth quarter of 2013, we have made considerable progress, including assembling a complete team of highly qualified professionals, successfully drilling our first well on Block 197 and reprocessing 3D seismic over our land base. Through the drilling of our 1ALV5BA well, we obtained geological and reservoir information, optimized our operational practices and began technical work to define our reservoir access solution.

Our activities to date and our plans for the remainder of 2014 are focused on targeting our mature fields, pursuing shallow conventional exploration, and proving the commercial viability of the Gomo tight oil play in the Reconcavo Basin. We expect to drill our next well on Block 183 starting in the second quarter of 2014 and plan to drill up to three additional wells in 2014. Our financial resources, combined with our experienced team, position us to achieve our goal of applying developed basin innovation to underexploited opportunities.

Financial and Operating Highlights


--  During the first quarter of 2014, we drilled our 1ALV5BA well on Block
    197. The well reached a total depth of 3,275 meters and has been cased
    and cemented. Based on the results of mud-logging and open-hole logs, we
    have filed a Notice of Discovery with the National Agency of Petroleum,
    Natural Gas and Biofuels (the "ANP").
--  Based on open-hole logs, the 1ALV5BA well encountered 43 meters of
    potential net hydrocarbon pay over several separate intervals, with an
    average porosity of 9.5 percent, using an 8 percent porosity cut-off.
    Additional technical work and testing is required to determine the
    extent, if any, of potential commercial hydrocarbons associated with the
    1ALV5BA well. We plan to commence a multi-zone testing program in the
    second quarter of 2014, subject to customary ANP approvals.
--  During the drilling of the 1ALV5BA well, Alvopetro completed three core
    runs (100% core recovery), recovering over 78 meters of core. We are
    currently undertaking extensive Special Core Analysis.
--  Alvopetro entered into a credit support facility for up to CAD $30.0
    million and issued letters of credit in support of financial guarantees
    required for Alvopetro's work commitments under the terms of its
    concession contracts.
--  On May 15, 2014, the Company signed concession contracts for each of the
    four blocks awarded in Brazil's 12th Bid Round and paid $0.6 million in
    associated signature bonuses.
--  Our cash and working capital resources remain strong, at $87.4 million
    as at March 31, 2014.
--  On Block 183, Alvopetro has commenced civil works on the site of our
    upcoming well. We expect to begin drilling this well in the second
    quarter of 2014.

Summary of Q1 2014

Alvopetro was established effective November 28, 2013 as a result of an agreement among Petrominerales Ltd. ("Petrominerales"), Pacific Rubiales Energy Corp. ("Pacific Rubiales") and Alvopetro Energy Ltd. (formerly 1774501 Alberta Ltd.) whereby the parties agreed to complete an arrangement (the "Arrangement") under section 193 of the Business Corporations Act (Alberta). The following table provides a summary of Alvopetro's financial and operating results for the three months ended March 31, 2014 and March 31, 2013. The consolidated interim 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 SEDAR website at www.sedar.com.

SUMMARY OF Q1 2014 RESULTS


----------------------------------------------------------------------------
                                               Three months ended March 31,
                                                   2014                2013
----------------------------------------------------------------------------
Financial
($000s, except where noted)
Oil sales                                           314                 298
Funds flow from operations (1)                   (3,016)               (734)
  Per share - basic and diluted ($)(2)            (0.04)              (0.01)
Net loss                                         (4,021)               (921)
Net loss attributable to common
 shareholders                                    (4,021)               (730)
  Per share - basic and diluted ($)(2)            (0.05)              (0.01)
Capital expenditures                              7,371                 253
Total assets                                    155,936              50,211
Debt                                                  -                   -
Net working capital surplus (1)(3)               65,716                 420
Common shares outstanding, end of year
 (000s)
  Basic (2)                                      85,167              85,167
  Diluted (4)                                    88,162              85,167
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operations
Operating netback ($/bbl) (1)
  Brent benchmark price                          107.90              112.49
  Sales price                                     99.94               94.72
  Transportation expenses                         (3.50)               0.62
----------------------------------------------------------------------------
  Realized sales price                            96.44               95.34
  Royalties and production taxes                 (10.82)              (4.64)
  Production expenses                           (103.12)             (72.99)
----------------------------------------------------------------------------
  Operating netback                              (17.50)              17.71
Average daily crude oil production
 (bopd)                                              35                  35
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:


(1)  Non-GAAP measure. See "Non-GAAP Measures" section in this press
     release.
(2)  All Alvopetro common shares currently outstanding were issued in
     connection with the Arrangement and there were no shares of Alvopetro
     Energy Ltd. outstanding at March 31, 2013. However, for comparison
     purposes and for all per share computations, the December 31, 2013
     common share balance is assumed for March 31, 2013.
(3)  Includes current restricted cash of $6.0 million (March 31, 2013 -
     $nil) but excludes non-current restricted cash of $21.7 million.
(4)  Consists of outstanding common shares and stock options of the Company
     as at March 31, 2014.

2014 Annual General Meeting of Shareholders, Letter to Shareholders and updated Corporate Presentation

All shareholders are invited to participate in our annual meeting of shareholders to be held on Monday, May 26, 2014 at 9:00 a.m. (Calgary time) at the Centrium Place Conference Centre, 2nd Floor (+15 level), 332 - 6th Avenue S.W., Calgary, Alberta. Alvopetro's annual letter to shareholders is available on our website at www.alvopetro.com/shareholder-documents and our updated corporate presentation is available at http://www.alvopetro.com/corporate-presentation.

Alvopetro Energy Ltd.'s vision is to be the premier independent exploration and production company in Brazil, maximizing shareholder value by being the lowest cost operator and applying innovation to underexploited opportunities. Alvopetro aims to implement a large-scale, repeatable, low-risk, multi-well development program, utilizing advanced technology and completion techniques. Alvopetro's strong financial position, along with our experienced team of professionals, local operating capabilities and highly prospective land base, will enable us to efficiently develop our resource play opportunities.

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 press release are in United States dollars, unless otherwise noted.

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", "intend" and other similar words or expressions are intended to identify forward-looking information. More particularly and without limitation, this news release contains forward-looking information concerning financial results and operating results, reserves and potential hydrocarbons in our 1ALV5BA well, 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 expectations and assumptions concerning testing results on the 1ALV5BA well, the timing of regulatory licenses and approvals, availability of capital, the success of future drilling and development activities, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. 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 these and other factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed through the SEDAR website 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.

Cautionary statements regarding the filing of a Notice of Discovery. Operators in Brazil are required to inform the ANP, through the filing of a Notice of Discovery, of potential hydrocarbon discoveries. These routine notifications to the ANP are not necessarily indicative of commercial hydrocarbons, potential production, recovery or reserves. Data obtained from the 1ALV5BA well 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 1ALV5BA 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.

Non-GAAP Measures. This press release contains financial terms that are not considered measures under Canadian generally accepted accounting principles ("GAAP"), such as funds flow from operations, funds flow per share, and operating netback. These measures are commonly utilized in the oil and gas industry and are considered informative for management and shareholders. Specifically, funds flow from operations and funds flow per share reflect cash generated from operating activities before changes in non-cash working capital. Management considers funds flow from operations and funds flow per share important as they help evaluate performance and demonstrate the Company's ability to generate sufficient cash to fund future growth opportunities. Operating netback is determined by dividing oil sales less royalties and production taxes, transportation and operating expenses by sales volume of produced oil. Management considers operating netback important as it is a measure of profitability per barrel sold and reflects the economic quality of production. Funds flow from operations, funds flow per share, and operating netbacks may not be comparable to those reported by other companies nor should they be viewed as an alternative to cash flow from operations, net income or other measures of financial performance calculated in accordance with GAAP.

Contacts:
Alvopetro Energy Ltd.
Corey C. Ruttan
President, Chief Executive Officer and Director

Alvopetro Energy Ltd.
E. John Koch
Chief Operating Officer

Alvopetro Energy Ltd.
Alison Howard
Chief Financial Officer
587.794.4224
info@alvopetro.com
www.alvopetro.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often un...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
In the first article of this three-part series on hybrid cloud security, we discussed the Shared Responsibility Model and examined how the most common attack strategies persist, are amplified, or are mitigated as assets move from data centers to the cloud. Today, we’ll look at some of the unique security challenges that are introduced by public cloud environments. While cloud computing delivers many operational, cost-saving and security benefits, it takes place in a public, shared and on-demand ...