Alvopetro June Sales Hit 2,990 boepd; Brazil Drilling in Focus

Alvopetro Energy reported June sales of 2,990 barrels of oil equivalent per day, a figure that tracks the company's recent production rates as it pushes a drilling program in Brazil's Recôncavo Basin. The company also noted higher natural gas prices under its long-term sales agreement.

The June volume compares with 3,135 boepd in May and 2,905 boepd a year earlier. Alvopetro is a small-cap producer focused on natural gas from the Cabiúnas formation in Bahia state. Its output sells under a long-term contract with a local distributor, with prices tied to a formula that has moved higher recently, the company said.

The drilling program targets additional producing wells at the company's Cabiúnas field. One well has been spud, and results are expected in the second half. If successful, new production would begin before peak winter demand in Brazil, when natural gas consumption typically rises.

Brazil's natural gas market has tightened over the past year. Domestic production from mature fields has declined, while LNG imports remain expensive due to global supply constraints. That has supported prices for producers like Alvopetro that sell into the local grid. The company's long-term agreement insulates it from spot volatility but allows for adjustments when market prices rise, the company said.

The sector readthrough is straightforward. Small-cap producers with long-term offtake and low operating costs tend to capture most price upside when local markets tighten. Alvopetro's all-in cash costs are near $15 per boe, leaving wide margins at current gas prices.

Alvopetro will report second-quarter financial results next month. The drilling update and June sales provide a baseline for production expectations. Investors are watching whether the new wells can boost output toward the company's nameplate capacity of roughly 4,000 boepd.

The stock trades on the TSX Venture Exchange under ALV and on the OTC in the U.S. as ALVOF.