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Alvopetro Energy Ltd

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Alvopetro Provides Unitization and Operational Update
Alvopetro Provides Unitization and Operational Update

Canada NewsWire

CALGARY, Jan. 15, 2018 /CNW/ - Alvopetro Energy Ltd. (TSX-V:ALV) is pleased to announce initial results from the ANP Arbitration in connection with the unitization of our Caburé natural gas field (the 197(2) and 198(A1) wells) with the adjacent resource owners.

Unitization Process

The National Agency of Petroleum, Natural Gas and Biofuels of Brazil ("ANP") was engaged to arbitrate the terms of the unitization of our Caburé natural gas field (the 197(2) and 198(A1) wells) with the adjacent resource owners. The ANP has completed its review of all technical data provided by the parties and has determined the initial working interest share for each resource owner as follows:



Gas in Place


%

mmboe (Bcf)1

Alvopetro

49.1%

10.40 (62.4)

Imetame Energia Ltda.

36.1%

7.65 (45.9)

Orteng Óleo & Gas S.A. 

14.8%

3.13 (18.8)



21.18 (127.1)

 

1 Gas in place estimated by the ANP following the review of all technical information submitted by Alvopetro and Imetame. These resource estimates have not been reviewed by Alvopetro's external reserve evaluators and do not reflect recoverable reserves.

It is anticipated that these initial working interest determinations may be adjusted in the future, on a retroactive basis, as more production history and geological information is obtained.

The ANP has requested that the parties work together to finalize all remaining matters required to complete the Unitization process within the next 60 days.  Most significantly these items include; the joint development plan, the determination of Unit Operator and related Agreements.  If the Parties are unable to reach an agreement on these matters by March 13, 2018, the ANP will make the final determination on these matters.

Natural Gas Commercialization

We are also working to finalize a gas sales agreement for our share of the natural gas of the unitized field and are targeting the execution of an agreement concurrent with the conclusion of the unitization process.  At the same time, we are completing all required engineering and permitting work for this natural gas commercial solution, including a natural gas processing facility and a 15-kilometre pipeline.

Operational Update

Alvopetro has received the required regulatory and environmental approvals to test our 183(1) well (100% working interest).  We plan to begin rig mobilization this week, with results from the first of two zones expected later in January.  These tests are being designed to demonstrate the gas resource potential on Block 183 and the adjacent Block 197 (which includes our 197(1) well).  We originally drilled the 183(1) well in 2014 to a total depth of 3,550 metres and, based on open-hole logs, encountered 189 metres of potential net hydrocarbon pay over several separate intervals. Since that time, we have significantly reduced completion and testing costs, now estimated to be $0.8 million.  Now that we are also close to finalizing a natural gas commercialization solution, we plan to test the resource potential on this block which, if successful, can underpin a much larger scale gas development in the area.


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 mandatory unitization process and securing a gas sales contract for our Caburé natural gas field.

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.

Abbreviations:



Bcf

=

billion cubic feet

mmboe

=

million barrels of oil equivalent

 

BOE Disclosure.  The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

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", "expect", "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 anticipated outcomes of regulatory determinations, future results from operations, projected financial results and financing requirements, future capital and operating costs, future production rates, proposed exploration and development activities, sources and availability of capital, and capital spending levels. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to regulatory requirements including the completion of the unitization of certain fields, securing gas sales agreements, the timing of regulatory licenses and approvals, the success of future drilling, completion, recompletion and development activities, the outlook for commodity markets and ability to access capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather and access to drilling locations, the availability and cost of labour and services, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the regulatory and legal environment and other risks associated with oil and gas operations. 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.

www.alvopetro.com
TSX-V: ALV

SOURCE Alvopetro Energy Ltd.

View original content: http://www.newswire.ca/en/releases/archive/January2018/15/c2197.html

Corey C. Ruttan, President, Chief Executive Officer and Director, or Alison Howard, Chief Financial Officer, Phone: 587.794.4224, Email: info@alvopetro.comCopyright CNW Group 2018

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