Beyond Brazil: Alvopetro Deepens Canadian Roots with Strategic Oil Play

CALGARY, AB – September 08, 2026

In a move that signals a confident and calculated expansion of its domestic portfolio, Alvopetro Energy Ltd. today announced a significant farm-in agreement in the Mannville heavy oil fairway of Western Canada. The deal, which brings 14 net sections of high-quality land into its fold, is more than a simple acquisition; it is a masterclass in strategic partnership and disciplined capital allocation, reinforcing the company's dual-hemisphere growth model.

At the heart of the announcement is a C$8.5 million, five-well drilling program slated to begin in late 2026. This initiative will be executed in partnership with Courser Energy, an established operator with deep expertise in the region. For Alvopetro, a company that has built a formidable, high-margin natural gas business in Brazil, this deepened commitment to Canadian heavy oil is a powerful statement about diversification, technological confidence, and long-term value creation.

A Disciplined Diversification Strategy

For years, Alvopetro has championed a 'balanced capital allocation model,' a philosophy that many companies espouse but few execute with such consistency. The firm's track record speaks for itself: from mid-2020 to mid-2026, it allocated 51% of its funds flow to capital expenditures and returned 47% to stakeholders. This new Canadian venture fits squarely within the growth portion of that equation, funded from a position of financial strength buttressed by a strong cash position of US$35.1 million at the end of the first half of 2026.

This move is the essence of strategic diversification. While Alvopetro's Brazilian operations in the Recôncavo Basin provide premium-priced natural gas and stable, high-margin cash flow, the Canadian heavy oil project offers a hedge and a complementary growth engine. It diversifies the company’s commodity exposure, insulating it from price fluctuations in a single market. This isn't a pivot away from the successful Brazilian model but a deliberate construction of a second, robust pillar on a different continent, leveraging a different resource. By balancing its high-return Brazilian gas fields with a technologically advancing Canadian oil play, Alvopetro is building a more resilient and dynamic enterprise.

The Mannville Play and a Strategic Partnership

The choice of the Mannville heavy oil fairway is itself a strategic one. This geological formation, a storied part of the Western Canadian Sedimentary Basin, is experiencing a renaissance. Once considered challenging, advancements in horizontal drilling and recovery techniques have unlocked new economic potential, attracting savvy operators back to the play. Alvopetro is not just buying land; it is buying into a proven resource base with renewed upside.

The partnership with Courser Energy is perhaps the most critical component of this de-risked expansion. In his comments, Alvopetro's President & CEO, Corey C. Ruttan, praised Courser for its “impressive land position from strong technical work.” This highlights a core tenet of effective institutional innovation: recognizing and leveraging external expertise. Rather than venturing alone, Alvopetro is collaborating with a proven specialist, gaining immediate access to an inventory of over 75 potential drilling locations and a wealth of operational knowledge.

Furthermore, the structure of the 'earning agreement' is designed to protect and accelerate capital return. By earning a 75% working interest in the initial wells before payout, Alvopetro significantly reduces its upfront risk. This interest adjusts to 50% post-payout, at which point the company also secures a 50% interest in all surrounding undeveloped land—a clause that provides substantial long-term upside. It’s a shrewd structure that prioritizes capital efficiency, allowing the company to prove out the resource with minimized financial exposure.

Technology and the Future of Heavy Oil

This C$8.5 million program is not just about drilling more wells; it’s about drilling smarter wells. The press release specifies the use of “proven open-hole multilateral well designs along with single-leg horizontal wells using re-circulation strings.” This technical language points to a sophisticated approach aimed at maximizing reservoir contact and recovery efficiency.

Multilateral wells allow an operator to tap into multiple sections of a reservoir from a single primary wellbore, a technique particularly effective in the complex, layered geology of formations like the Mannville. It is a method Alvopetro has already successfully deployed in its existing Canadian assets. Combined with advanced horizontal drilling and re-circulation technologies, which can improve fluid dynamics and enable enhanced oil recovery methods, this approach represents the leading edge of conventional heavy oil extraction.

Operating in Alberta also means navigating one of the world's most stringent regulatory environments. The use of these efficient technologies is not only an economic imperative but also a response to the growing demand for responsible resource development. By maximizing the oil recovered per well, companies can minimize their surface footprint and overall environmental impact, aligning operational success with ESG commitments.

Balancing Global Ambitions

While this Canadian expansion is significant, it does not detract from the company’s ongoing success in Brazil. Recent operational updates show continued progress at its Murucututu and Caburé natural gas fields, which remain the primary engine of the company's impressive 86% operating netback margin. The Canadian platform, which previously accounted for a small fraction of the company's production, is now poised to become a more meaningful contributor to its long-term growth story.

Ultimately, Alvopetro's latest move in the Mannville fairway is a clear illustration of a mature and forward-thinking energy company at work. It demonstrates an ability to simultaneously optimize a high-performing international asset while strategically building a complementary domestic one. By combining financial discipline, strategic partnerships, and technological innovation, Alvopetro is not just expanding its asset base; it is building a durable, diversified foundation for future growth and sustained shareholder returns.