ALVOPETRO BRAZIL DISCOVERY

Summary

Energy Advisors Group, Canadian office has been retained to market Alvopetro's non-core assets in the Recôncavo Basin, Brazil. This opportunity encompasses three blocks with 7,416 total acres in Brazil known as Bom Lugar, Mãe da Lua, and Block 182. These blocks are situated within an area of multiple oil fields and discoveries including some shallow discoveries offering low-cost drilling and completion and low operating expenses.

Current Production & Immediate Upside---

Alvopetro is offering three PDP wells that have produced 360 MBO and are currently producing 14 BOPD. There are a number of new drilling opportunities including PUD and exploration locations. Alvopetro envisions a new owner acquiring these assets, with plans to complete two new fracs and a third workover which could increase production to 250+ BOPD.

As support, a third-party engineering firm, GLJ's Calgary office, has completed a review of the Alvopetro assets confirming 3P reserves of 675 MBO at Bom Lugar and Mae da Luia. The third block, Block 182 has not been drilled but Alvopetrol does have 3-D Seismic which highlights future development. The GLJ report is as of January 1, 2024.

In addition the Seller adds the following comments about Brazil:

1. This is an Investment into a project with existing cash flow and upside in terms of production and reserves;
2. Infrastructure already in place;
3. Onshore asset w/ lower CAPEX costs compared to offshore opportunities;
4. Low royalties;
5. Brazil investment makes sense considering the strong US dollar; 
6. The Project is located in the prolific but underexplored Reconcavo Basin where the investment provides an entry and base from where a company can continue to grow organically through development, bolt on or larger M&A;
7. The Seller, an established Canadian publicly listed company is willing to provide assistance to a first time Brazillian entrant, if required;

Producing Formations---

The three (3) main sandstone reservoirs: Caruacu, Gomo, and Agua Grande exhibit favorable porosities ranging from 9% to 11% and permeabilities between 1 to 8 millidarcies.

Quick Recap---

• Three (3) blocks in the Recôncavo Basin, Brazil
• Bom Lugar, Mãe da Lua, and Block 182 (more than 7,400 acres total)
• 2-Producing Licenses. 1-Exploration Permit. 10-Wells, 3-Oil Producers.
• 100% Working Interest. 5% & 7.5% Royalties in 2 blocks
• Light Oil (34 degree API). Interpreted 3-D seismic. Recompletion Targets.
• Caruacu, Gomo, and Agua Grande Sandstone.
• Total Proved NPV10 Usd $4,200,000 (Third Party Engineering).
• Experienced team in Latin America and the first Brazilian integrated onshore natural gas producer.
• Favorable lease terms in tandem with Brazil being the largest oil producer in South America and the 9th globally.

In conjunction with the Seller, EA has prepared a 6-page summary which is available without the C.A. here in the public data room and additional technical support content on the back of the C.A. In fact, upon execution of a Confidentiality Agreement, our Canadian office will provide access to confidential evaluation material in the virtual data room. 

Companies interested in Brazil as a first-time entrant might want to review this file: Click Here

Please direct all inquiries to the EA contact listed below:

Steve Henrich

Director

---Email: shenrich@energyadvisors.com

---Phone: 403-294-1906

Calgary Office

650, 727 - 7th Avenue SW

Calgary, AB T2P 0Z3