Alvopetro Energy (ALVOF) Q2 2026 earnings summary

Executive summary

• Q2 2026 production averaged 3,067 boepd, generating $19.2 million in revenue and $14.1 million in funds flow from operations, with an 86% operating netback margin and realized natural gas price of $10.98/Mcf.

• Achieved robust financial and operational results, exceeding expectations with strong free cash flow generation in both Brazil and Canada.

• Maintained disciplined capital allocation, balancing organic growth and stakeholder returns, with nearly half of cumulative funds flow since 2020 returned to shareholders.

• Multi-year growth potential supported by strategic infrastructure, premium gas pricing, and ongoing drilling and facility expansions in Brazil.

• July 2026 sales volumes increased to 3,134 boepd, with 2,995 boepd from Brazil and 139 bopd from Canada.

Financial highlights

• Q2 2026 revenues reached $19.2 million, with funds flow from operations at $14.1 million, up $1.6 million from Q1 and 36% year-over-year.

• Net income for Q2 was $9.8 million, up 43% from Q2 2025 and 21% sequentially from Q1 2026.

• Operating netback for Q2 2026 was $59.08/boe, with an 86% margin and realized price of $68.72/boe.

• Working capital, net of debt, stood at $6.1 million as of June 30, 2026.

• Paid $0.12/share dividend in Q2 2026 (6.8% yield), up 20% year-over-year.

Outlook and guidance

• Second half 2026 CapEx forecasted at just over $29 million, higher than initial guidance due to accelerated drilling at Murucututu.

• Natural gas price under long-term sales agreement increased to $11.70/Mcf for Q3 2026, 7% above Q2 2026.

• Continued drilling and facility expansion at Murucututu field planned for H2 2026 to support production growth.

• Production expected to remain near H1 levels until facility expansions are completed by year-end, enabling higher sales.

• Growth trajectory expected to continue into 2027 and beyond, supported by ongoing capital program and deep drilling inventory.