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Alvopetro Energy

Investor Insight

Brazil’s expanding natural gas market, supported by an attractive and stable regulatory framework and fiscal regime offers a unique opportunity for Alvopetro Energy to leverage its high-potential assets and growth opportunities as an innovative natural gas company in the state of Bahia.


Alvopetro Energy (TSXV:ALV;OTCQX:ALVOF) is a pioneering independent natural gas producer in Brazil, and was the first company to deliver sales-specified natural gas onshore into the local distribution network, which was previously dominated by the state oil company. This milestone, achieved on July 5, 2020, marked the beginning of a new era in Brazil’s gas market. As an independent upstream and midstream operator, Alvopetro engages in the acquisition, exploration, development and production of natural gas and oil. The company holds interests in the Caburé and Murucututu natural gas assets, Block 182 and 183 exploration assets, and Bom Lugar and Mãe-da-lua oil fields, which cover an area of over 22,000 acres in the Recôncavo basin onshore Brazil. Alvopetro Energy was incorporated in 2013 and is headquartered in Calgary, Canada.

Alvopetro adheres to a balanced capital allocation model, reinvesting half of its funds flow from operations in organic growth opportunities while returning the remaining 50 percent back to stakeholders (through dividends, debt and interest payments and capital lease payments). Since production came online in July of 2020, funds flow from operations has reached ~$140 million with 43 percent being reinvested into capital expenditure initiatives, 48 percent being returned to stakeholders, and 9 percent going back to strengthening the company’s balance sheet.

Alvopetro continues to focus on minimizing its environmental impact, responsibly supplying energy, and having a positive influence on the communities where it operates. Alvopetro currently invests in various voluntary social programs that have been well received by the community. The company’s focus has been on the sustainable development of its rural communities, entrepreneurship, education, cultural and sporting activities, as well as biodiversity preservation.

Company Highlights

  • Alvopetro is a leading independent upstream and midstream gas operator in the state of Bahia, Brazil.
  • The company’s strategy is focused on unlocking Brazil’s on-shore natural gas potential, building off the development of its Caburé and Murucututu natural gas fields strategic midstream infrastructure.
  • Over 95 percent of Alvopetro’s production is from natural gas and the company has a 2P reserve base of 9.6 MMboe.
  • The company boasts high operating netbacks and profitability per unit of production, setting it apart from its Latin American and North American peers. The state of Bahia boasts a favorable fiscal regime with low royalties and a 15 percent income tax rate.

Key Projects


The company’s flagship Caburé asset (56 percent Alvopetro) delivers the majority of Alvopetro’s current production. The project is a joint development (the unit) of a conventional natural gas discovery across four blocks, two of which are held by Alvopetro and two of which are held by its partner, with Alvopetro’s working interest being 56.2 percent following the first redetermination. The unit currently includes eight existing wells, with all production facilities already in place. The resource is well defined with 3D seismic surveys, particularly on the eastern side of a main bounding fault that runs roughly north-south through the Caruaçu formation. The company plans to drill an additional five wells in late 2024 and early 2025 to further improve the productive capacity of the field.

Midstream – Infrastructure and marketing (100 percent Alvopetro)

All of Alvopetro’s natural gas produced from Caburé and Murucututu are shipped via 100 percent owned and operated natural gas pipelines to Alvopetro’s natural gas processing facility (UPGN). At the UPGN, the natural gas goes through a mechanical refrigeration process, with condensate and water removed during the process, and condensate then gets trucked out and sold at a premium to Brent. The natural gas gets delivered to a receiving station (city gate) that was built by the company’s offtaker, Bahiagás, the distribution company for the State of Bahia. The gas then gets shipped via a newly built 15 km distribution pipeline to the Camacari industrial complex (~17.5 km away), where the vast majority of the natural gas in the state of Bahia gets consumed.

Natural gas is sold to Bahiagas under a long-term gas sales agreement, with pricing set semi-annually based on a blend of three international benchmark prices (Henry Hub, UK NBP and Brent oil equivalent) averaged over a period of time. The contract includes both a floor and a ceiling price, with adjustments for inflation.

Organic Growth Opportunities

Maximizing the Gas Plant

In the near-to-mid term, Alvopetro has a goal to maximize its gas plant capacity to 18 million cubic feet per day (or 3,000 barrels of oil equivalent per day), with a plan to double its capacity in the coming years through both ongoing development at the Caburé Unit and a multi-year development of the Murucututu field.

Unit Development

Alvopetro’s working interest in the Caburé Unit was recently increased from 49.1 percent to 56.2 percent and as a result, Alvopetro is now entitled to higher production entitlements from the Unit. In addition, with the unit development drilling activities planned to commence in 2024, the overall productive capacity of the Unit is targeted to increase.

Murucututu Gas

Alvopetro’s Murucututu asset (100 percent owned) sits immediately north of Caburé. The company is looking to optimize its existing wells, which will help cultivate a broader multi-year development plan. Independent reserve estimators, GLJ, highlight the potential for this field with 2P reserve totaling 4.6 million barrels of oil equivalent, risked best estimate contingent resource of 5.4 million barrels of oil equivalent and risked best estimate prospective resource of 9.6 million barrels of oil equivalent representing a significant addition to the company’s current 2P reserve base.

Management Team

Corey C. Ruttan – Chief Executive Officer

Corey C. Ruttan is the president, chief executive officer and director of Alvopetro. He was the president and CEO of Petrominerales, from May 2010 until it was acquired by Pacific Rubiales Energy in November 2013. Prior to that, he was the vice-president of finance and chief financial officer of Petrominerales. From March 2000 to May 2010, Ruttan was the senior vice-president and chief financial officer of Petrobank Energy and Resources, and held increasingly senior positions with Petrobank since its inception in 2000. He also served as executive vice-president and chief financial officer of Lightstream Resources from October 2009 to May 2010; served as vice-president of Caribou Capital from June 1999 to March 2000; and manager financial reporting of Pacalta Resources from May 1997 to June 1999. He began his career at KPMG where he worked from September 1994 to May 1997. Ruttan obtained his Bachelor of Commerce degree majoring in accounting from the University of Calgary in 1994 and his chartered accountant designation in 1997.

Alison Howard – Chief Financial Officer

Alison Howard is a chartered accountant with over 20 years of experience in Canadian and international taxation, accounting and finance. Howard joined Petrominerales in July 2011 as a tax manager and was subsequently promoted to tax director. From May 2008 to July 2011, Howard was the tax manager at Petrobank Energy and Resources. Prior to that, Howard spent a number of years at Deloitte LLP in Calgary. She obtained her Bachelor of Commerce degree from the University of Saskatchewan in 1999.

Adrian Audet – VP, Asset Management

Adrian Audet joined Petrominerales in 2013 and has held increasingly senior roles with Alvopetro since its inception. Audet has spent extensive time in Bahia overseeing the operations, realizing extensive cost savings and improvements in efficiency. Previously, Audet held engineering roles with increasing responsibility in the oil and gas industry. Audet began his career in 2006 and completed his masters and undergraduate degrees in mechanical engineering at the University of Alberta. Audet is a professional engineer registered with APEGA and is a CFA charterholder.

Nanna Eliuk – Exploration Manager

Nanna Eliuk is a professional geophysicist (M.Sc.) with over 23 years of diversified petroleum exploration and development experience. She has expertise in conventional and unconventional plays in both carbonate and clastic reservoirs in different depositional and structural settings (including pre-salt) in various basins around the world. Prior to joining Alvopetro, Eliuk was the senior explorationist of Condor Petroleum (Kazakhstan) for two years, and prior thereto, she was the vice-president of geophysics and land for Waldron Energy. Eliuk started her career in 1997, holding progressively senior roles at Husky Energy for five years, and at Compton Petroleum for over six years. Her extensive experience includes geophysical evaluation and analysis for business development opportunities and new ventures in various international basins, along with regional mapping, play fairway analysis, petroleum system evaluation, prospect definition, and seismic attribute analysis. Eliuk holds a masters degree in geology and geophysics, and a BSc. in geology.

Frederico Oliveira – Country Manager

Frederico Oliveira has held increasingly senior roles since 2008 and has expertise in regulations, contracts, partnerships, management and cost efficiency. He has held management roles in large private companies in Brazil, performing strategic planning, project implementation, process restructuring, efficiency and productivity improvements, and cost control. Oliveira obtained an MBA from the Federal University of Minas Gerais in 2004 and a Bachelor of Science degree in Mechanical Engineering from the Pontificia Universidade Catolica de Minas Gerais.

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