Alvopetro Energy Ltd. announces preliminary results from our post-stimulated Gomo 183(1) well test, and an operational update.

Gomo Tight Gas Resource (100% Alvopetro) - 183(1) Well Test

The company's 183(1) well, located on Block 183 (100% working interest) in the Recôncavo basin in the State of Bahia, Brazil was originally drilled in 2014 to a total depth of 3,550 metres. Alvopetro recently completed the stimulation of an 18 metre zone in the Gomo Member of the Candeias Formation. The company commenced an initial flowback and clean-up flow process on December 16, 2019 to recover completion and stimulation fluids. Over this flowback period the well has produced a total of 5.82 million cubic feet ("mmcf") of natural gas, 647 barrels ("bbl") of completion fluid and 249 barrels of 56 degree API condensate, or approximately 43 bbls of condensate per mmcf of natural gas. Based on hours on production, the well has produced at average rates of 0.734 million cubic feet per day ("mmcf/d") of natural gas, 82 bbl/d of completion fluid and 31 bbl/d of condensate. As a result of limited equipment availability, Alvopetro's ability to accelerate the clean-up flow period has been limited. The company are currently cycling the well to recover the remaining completion fluid. Over the last three cycles (10-hour shut-in period, followed by 6-hour production period) the well has produced at average rates (based on production hours) of 0.919 mmcf/d of natural gas, 31 bbl/d of completion fluid and 27 bbl/d of condensate with a final flowing wellhead pressure of 175 psi on a 32/64" choke. Although the well is exhibiting increasing initial production rates on each cycle, average production rates are still being limited by liquid loading as the remaining completion fluid re-enters the wellbore. Once the clean-up process has been completed, Alvopetro will commence their 72-hour production test.  

Operational Update

Caburé Unit Development (49.1% Alvopetro)
The Caburé Unit development plan includes construction of high-pressure gas production facilities, tie-in of all wells, and drilling up to four new wells. The third development well (7-CBE-1D-BA) in the plan was recently drilled to a depth of 1,759 metres measured depth ("MD"). Based on open-hole logs, the well encountered 72 metres of potential net pay in the Caruacu Member of the Maracangalha Formation, with average porosity of 13.1% and average water saturation of 37%, consistent with expectations. Remaining field development, consisting of inter-well flowlines, the high-pressure facilities expansion, including connection to Alvopetro's Midstream Project, is expected to be completed this month. A fourth development well may be drilled on the west side of the main fault depending on future production results from the existing offsetting well.  

Caburé Midstream Project (100% Alvopetro)
Alvopetro's Caburé Midstream Project includes construction of an 11-kilometre Transfer Pipeline and a Gas Treatment Facility ("Facility"). Construction of the Transfer Pipeline has now been completed. Hydrostatic testing and final tie-in to the Caburé Unit facilities is expected to be completed this month. The Facility is being constructed by Enerflex Ltd. ("Enerflex") and they will own and operate the Facility on Alvopetro's behalf. The mechanical assembly of the Facility is planned to be completed later in January and the Facility is expected to be commissioned in February and March.

The company's natural gas will be sold under our long-term gas sales agreement with Bahiagás, the local distribution company for the state of Bahia. As part of this agreement, Bahiagás agreed to extend their distribution network by 15 kilometres and construct a new gas receiving station (City Gate) at the Facility site. Bahiagás has commenced construction along the pipeline right of way and has also started construction at the City Gate. Bahiagas expects to complete their projects in April, at which time Alvopetro plans to start natural gas deliveries from the Caburé field.

Link to Alvopetro Brazil country profile