Q2 2026 Alvopetro Energy Ltd. Earnings Call Transcript
Key Points
- Record or near-record production levels in Q2 2026, with July output exceeding 3,100 boe/d, reflecting a 25% increase over the 2025 average.
- Strong operating netback of $59.08 per boe, driven by higher realized prices and an 86% netback margin, highlighting best-in-class profitability.
- Significant funds flow growth, with Q2 2026 funds flow of $14.1 million, up 13% from Q1 and 36% year-over-year, supported by a 74% funds flow margin.
- Continued shareholder returns with a US $0.12 per share dividend, representing a yield of nearly 7%, and cumulative dividends of $75 million since inception.
- Robust growth pipeline in Brazil, including the upcoming completion of the 183-D1 well, expansion of field processing capacity, and drilling at the H2 location, positioning for future production increases.
- Higher second-half 2026 CapEx forecast of over $29 million, exceeding initial guidance due to accelerated drilling activities, which may pressure near-term cash flows.
- Delays in Canadian drilling activity, with operations now expected in winter rather than summer, potentially slowing growth in that region.
- Operational challenges in Brazil led to completing only three of the planned five intervals in the 183-D1 well, reducing initial completion efficiency.
- Production volumes from the Merca 2 field declined in July to 3.6 million cubic feet per day from 4.3 million in Q2, indicating potential facility constraints.
- No stock buybacks in 2026, as the board prioritizes dividends and accelerated capital spending, which may disappoint investors seeking share repurchases.
Good morning. Thank you for joining us today for our Q2 2026 results webcast. I'm Corey Ruttan, President and CEO, and I'm joined by Alison Howard, our Chief Financial Officer, and Adrian Adet, our Vice President, Asset Management.
Hi, everyone. Just a few administrative points before we begin. We will be recording today's webcast and we'll have a replay available on our website later on today. All attendees have been placed in listen in only mode, but we will be hosting a Q&A session that we'll get to at the end of our presentation. You can start logging any questions you have now using the Zoom Q&A feature. You should see a button on your screen there so you can start sending in any questions at any time. If you've filed in by phone, you can send questions to social [email protected].
Lastly, we will be going through various non-GAAP measures, oil and gas metrics, and we will be making some
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