Alvopetro Announces Operational Update, Year-End 2016 Financial Results and Filing of Annual Information Form
Alvopetro Energy Ltd. (TSX-V:ALV) is pleased to announce an operational update, fourth quarter 2016 and year-end 2016 financial results and filing of our annual information form.
In January 2017, our 198(A1) well, located on Block 198 in the Recôncavo basin in the State of Bahia, Brazil, was drilled to a total measured depth of 1,480 metres. Based on open-hole logs, the well encountered 31 metres of potential net natural gas pay in the Main Caruaçu Member, with an average 46% water saturation, and an average porosity of 11.4%, using an 8% porosity cut-off. The well also encountered 26 metres of potential net hydrocarbon pay in a series of thinner up-hole Pojuca sands, with an average 51% water saturation, and an average porosity of 14.3%, using an 8% porosity cut-off. Earlier this month two zones in the well were completed and production tested.
During the 48-hour test of the first zone, the well followed natural gas, on an unstimulated basis, at an average rate of 15,000 m3/d (534 Mcfpd or 89 boepd). During the 72-hour test of the second zone, the well followed natural gas, on an unstimulated basis, at an average rate of 76,000 m3/d (2.7 MMcfpd or 447 boepd). The pressure transient analysis from the first zone forecasts potential post-stimulation rates with near well bore damage removed (expected to be achieved using a near well bore acid wash) indicating deliverability of 835 Mcfpd (139 boepd) after three months of continuous production and 693 Mcfpd (116 boepd) after one year of continuous production. The first zone tested natural gas below the previously interpreted gas water contact but is in communication with the water contact. As such, we would likely put the well on production initially from just the second (upper) zone. We are awaiting results of the pressure transient analysis from the second zone.
The 198(A1) well was drilled as a step-out well to our 197(2) natural gas discovery on our Caburé field and satisfies our work commitment on the block, subject to the approval by the National Agency of Petroleum, Natural Gas and Biofuels of Brazil ("ANP"). The testing results from this well to date along with the testing results from the 197(2) well solidify the significant resource in place on this field. We are actively working towards finalizing the unitization agreement with the adjacent resource owner and have made significant advancements in negotiations to secure a natural gas sales contract. Alvopetro has completed conceptual engineering and has commenced environmental licensing work. Upon execution of the unitization agreement and a gas sales agreement, Alvopetro plans to commence development of the Caburé field.
Our $5.0 million 2017 capital plan is expected to funded with existing cash balances on hand and includes:
Financial and Operating Highlights - Fourth Quarter 2016
Financial and Operating Highlights – Year-End 2016
Updated Corporate Presentation
Alvopetro's updated corporate presentation is available at: http://www.alvopetro.com/corporate-presentation.
Annual Information Form
Alvopetro has filed its annual information form (AIF) with the Canadian securities regulators on SEDAR. The AIF includes the disclosure and reports relating to oil and gas reserves data and other oil and gas information required pursuant to National Instrument 51-101 of the Canadian Securities Administrators. The AIF may be accessed electronically from at www.sedar.com.
Alvopetro Energy Ltd.'s vision is to be the premier independent exploration and production company in Brazil, maximizing shareholder value by applying innovation to underexploited opportunities. Our strategy is to focus on three core opportunities including lower risk development drilling on our mature fields, shallow conventional exploration, and the development of the significant hydrocarbon potential present in our deep Gomo tight-gas resource play. Our efforts in the near-term are concentrated on building a natural gas business by finalizing a unitization agreement and securing a gas sales contract.
SOURCE: Alvopetro Energy Ltd.
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