Alvopetro announces 198(A1) well results

CALGARY, Jan. 30, 2017 /CNW/ - Alvopetro Energy Ltd. (TSX-V:ALV) is pleased to announce successful results from our 198(A1) well, located on Block 198 in the Recôncavo basin in the State of Bahia, Brazil.  The 198(A1) well was drilled as both a step out well to our 197(2) natural gas discovery in the Caruaçu Member, and to target uphole exploration potential.  The well also fulfilled our Block 198 exploratory phase commitments, subject to the approval of the National Agency of Petroleum, Natural Gas and Biofuels ("ANP").

The 198(A1) well 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.  We plan to commence production testing, starting with the main Caruaçu Member, in February 2017.

By comparison, our 197(2) well was completed and tested in 2015 from three zones in the Caruaçu totalling 25 metres of net pay. During the 72-hour test completed of each interval our 197(2) well flowed natural gas, on an unstimulated basis, at an average rate of 101,000 m3/d (3.6 MMcfpd or 600 boepd) from the first interval, 53,000 m3/d (1.9 MMcfpd or 310 boepd) from the second interval and 89,500 m3/d (3.2 MMcfpd or 527 boepd) from the third interval. In 2015, Alvopetro had a pressure transient analysis completed to forecast potential post-stimulation rates of our 197(2) well with damage removed (expected to be achieved using a near-wellbore acid wash) on a combined basis indicating total deliverability of 12.5 MMcfpd (2,089 boepd) after three months of continuous production and 6.9 MMcfpd (1,146 boepd) after one year of continuous production.

Our 198(A1) well reached total drilling depth in 10 days, representing a significant improvement over past wells drilled by Alvopetro.  These performance improvements have a positive impact on the attractiveness of our entire drilling inventory and provide improved financial flexibility.

Alvopetro has also received ANP approval for the Declaration of Commerciality of our 197(2) discovery which has now been named the Caburé Field.  Alvopetro is working to complete the unitization of the Caburé Field with the adjacent Block owner, and to conclude long-term gas sales agreements to finalize the field commercialization plan.  

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 potential hydrocarbons and potential production of hydrocarbons in our 197(2) and 198(A1) wells, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro's testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning testing results on our 197(2) well and 198(A1) well, the timing of regulatory licenses and approvals, completion of unitization with an adjacent Block owner, securing gas sales agreements, availability of capital, the success of future drilling and development activities, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. 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.

Cautionary statements regarding the filing of a Notice of Discovery. We have submitted a Notice of Discovery of Hydrocarbons to the ANP with respect to the 198(A1) well. All operators in Brazil are required to inform the ANP, through the filing of a Notice of Discovery, of potential hydrocarbon discoveries. A Notice of Discovery is required to be filed with the ANP based on hydrocarbon indications in cuttings, mud logging or by gas detector, in combination with wire-line logging. Based on the results of mud-logging and open-hole logs, we have filed a Notice of Discovery relating to our 198(A1) well. These routine notifications to the ANP are not necessarily indicative of commercial hydrocarbons, potential production, recovery or reserves.

Testing and Well Results.  Data obtained from the 198(A1) well identified in this press release, including hydrocarbon shows, open-hole logging, net pay and porosities, should be considered to be preliminary until testing, detailed analysis and interpretation has been completed. Hydrocarbon shows can be seen during the drilling of a well in numerous circumstances and do not necessarily indicate a commercial discovery or the presence of commercial hydrocarbons in a well. There is no representation by Alvopetro that the data relating to the 198(A1) well contained in this press release is necessarily indicative of long-term performance or ultimate recovery. The reader is cautioned not to unduly rely on such data as such data may not be indicative of future performance of the well or of expected production or operational results for Alvopetro in the future.

Abbreviations:

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 press release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

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.

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.

SOURCE Alvopetro Energy Ltd.

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