Q3 2021 Alvopetro Energy Ltd Earnings Call
Speaker 1: and answer session following the presentation so I encourage you to log your questions into the Zoom platform using the Q&A button or alternatively you can email your questions to socialmedia at albopetro.com
Question and answer session. Following the presentation. So I encourage you to log your questions into the zoom platform using the Q&A button or Alternatively, you can E mail your questions to social media alcohol Petro Dot com.
I'll, let you read our cautionary statements at your leisure.
Speaker 1: let you read our cautionary statements at your leisure. The third quarter was another great quarter for us. It was a record quarter both operationally and financially. Our results are really underpinned by our strong production performance to date.
So the third quarter was another great quarter for us it was a record quarter, both operationally and financially.
Our results are really underpinned by our strong production performance to date.
Speaker 1: Third quarter we averaged 2,459 barrels of oil equivalent per day. That's up 39% year over year and up 4% quarter over quarter.
Third quarter, we averaged 20 459 barrels of oil equivalent per day, that's up 39% year over year.
And up 4% quarter over quarter, we had just a slight decrease in October that you can see just shy of 2400 BOE a day.
Speaker 1: We had just a slight decrease in October that you can see just shy of 2,400 BoEs a day. But again, excellent production performance. That'll turn it over to Allison.
But again.
Excellent production performance with that I'll turn it over to Allison.
Speaker 2: Thanks and good morning everyone. I'll jump right into some financial highlights starting with our operating netback.
Thanks, and good morning, everyone I'll jump right into some financial highlights starting with our operating netback.
Speaker 2: Our operating netback is our overall profitability per barrel of oil equivalent.
Our operating netback is our overall profitability per barrel of oil equivalent.
Speaker 2: and that's reflected in the green bars and you can see a steady increase kind of similar to production a steady increase in our operating net box since we commenced operations last July . At the top of the bar is our realized sales price so you can see Q3 was our record.
That's reflected in the green bars, and you can see a steady increase kind of similar to production of steady increase in our operating netback. Since we commenced operations last July.
At the top of the bar is our realized sales price. So you can see Q3 was a record realized sales price per Boe as well.
Speaker 2: real life sales price per BOE as well at $44, just over $44 per BOE. So that was up close to $6 from last quarter.
$44 just over $43 per Boe, so that was up close to $6 from last quarter.
Speaker 2: and that explains the main increase in our operating net back this quarter as well. Our gas sales increased just over a dollar per NCS which was about 17% compared to Q2 and that was as a result of our natural gas sales price redetermination on August 1st.
And that explains the mean increase in our operating net back this quarter as well.
Our GAAP sales increased just over a dollar per Mcf, which was about <unk>.
17% compared to Q2 and that was as a result of our natural gas sales price Redetermination on August 1st.
Speaker 2: and condensate was up as well. Our production expenses are reflected in the yellow bars there and that was fairly consistent and overall has been under four dollars per BoE since we started production. And royalties were up marginally this quarter just because our royalties for natural gas are tied to Henry Hub and with increasing Henry Hub prices our royalties as a percentage of sales has gone up.
And condensate was up as well our production expenses are reflected in that.
Hello bars, there that was fairly consistent.
And overall, it's been under $4 per Boe.
Since we started production and our royalties were up marginally this quarter, just because our royalties for natural gas are tied to Henry hub and with increasing Henry hub prices are real our royalties as a percentage of sales has gone up.
Moving on to funds flow from operations, which is the green bar here our funds flow from operations is our cash flow from operating activities before adjusting for working capital and similar to our operating that box, we've seen a large a steady increase in that as well.
Speaker 2: Moving on to funds flow from operations, which is the green bar here, our funds flow from operations is.
Speaker 2: our cash flow from operating activities before adjusting for working capital. And similar to our operating netbacks, we've seen a large steady increase in that as well. This quarter is up two and a half million dollars. I'll walk through the details of that on the next slide, but just touching briefly on capital expenditures, which we've just shown here, just to show the percentage of our capital expenditures, our percentage of our funds both spent on capital.
This quarter is that she was $5 million of walk through the details of that on the next slide but just.
Touching briefly on capital expenditures, which we've just shown here.
Just to show the percentage of our capital expenditures.
Our percentage of our funds both spent on capital.
Speaker 2: This quarter was just under $1.3 million. The bulk of that is for our GoMo or Merck is to tie in pipeline that we're building right now.
This quarter was just under $1 $3 million. The bulk of that is for our go mall, where America is to tie in pipeline that we're building right now, but overall as a percentage of funds flow we've been fairly low.
Speaker 2: But overall as a percentage of funds flow, we've been fairly low at roughly 17% year to date and 16% this quarter.
That's roughly 17% year to date and 16% this quarter.
Speaker 2: So moving on to fund flow, we saw, just on that previous chart, we saw an increase of two and a half million dollars in our funds full from operations.
So moving onto fund flow, we saw as you saw on the previous chart. We show an increase of two and a half million dollars in our funds flow from operation.
Speaker 2: That's mainly due to increased revenues of $1.8 million with about 80% of that due to that realized price increase that I spoke about earlier.
That's mainly due to increased revenues of $1 8 million with about 80% of that due to that realized price increase that I spoke about earlier and as I mentioned royalties were marginally higher this quarter.
Speaker 2: As I mentioned, royalties were marginally higher this quarter. Production and GNA were fairly consistent.
Production and G&A were fairly consistent.
We did see a lower current tax expense in Q3.
Speaker 2: We did see a lower current tax expense in Q3. As we noted in our Q3 financials, we did receive approval for the Soudenhi tax incentive, which is a BTSC tax incentive on our natural gas profits. And it reduces our inherent tax from the 34% statutory rate in Brazil to 15.25%. So overall, year-to-date, our current tax.
As we noted in our Q3 financials, we did.
<unk> received approval for the speedy any tax incentive which is I bet. He had state tax incentives on our natural gas profits and it reduces our inherent tax from the 34% statutory rates in Brazil to a 15.25%. So overall year to date our current tax.
It's just under 4 million and is quite low relative to the earnings that we reported which is great.
Speaker 2: is just under four million and is quite low relative to the earnings that we've reported, which is great. The other item impacting funds flow was we did have recognition of
The other the other item impacting funds flow was we did have recognition of.
Speaker 2: just over $900,000 of other income in the quarter. A large portion of that is non-recurring and relates to retroactive income.
Just over 900000 of other income in the quarter, a large portion of that is nonrecurring and relates to a retroactive tax.
Speaker 2: Tax legislation change that it improves some tax credits that we are eligible for. So there was a bit of an increase there compared to a large increase there compared to
Tax legislation change that.
Groups. Some tax credits that were eligible for so there was a bit of an increase there compared to like a large increase their computer too.
Our last quarter.
Just thought I would explain our net income and a bit more detail because despite that improved funds flow.
Speaker 2: Just thought I would explain our net income in a bit more detail because despite that improved fund flow, we did see a decrease in our net income and virtually all of that you can see there is due to foreign exchange.
See a decrease in our in our net income and virtually all of that you can see there is due to foreign exchange. We do have some larger foreign exchange gains and losses that go through our income statement.
Speaker 2: We do have some larger foreign exchange gains and losses that go through our income statement.
Speaker 2: And it's all basically sort of an accounting phenomenon relating to intercompany loans. And if you look at our statement of cash flows, you'll see that the bulk of any foreign exchange loss or gain is generally adjusted out from a cash position. So it just has to do with accounting for intercompany loans.
And it's it's all basically sort of an accounting phenomenon related to intercompany loans and and if you look at our statement of cash flows you'll see that the bulk of any foreign exchange loss or gain it is generally adjusted out from our cash position. So it just has to do with accounting for intercompany loans.
Speaker 2: because our our subsidiary in Brazil owes us US dollar funds. There's an inherent foreign exchange fluctuation on that despite the fact that those eliminate on consolidation and it's non-cash but that's the main reason for kind of the fluctuating net income that you see in our statements.
Because our our subsidiary in Brazil.
Oh, that's U S dollar.
S dollar funds, there's an inherent.
Exchange fluctuation on that despite the fact that those eliminated on consolidation and it's noncash, but that's the main reason for kind of the the fluctuating net income that you see in our statements.
Speaker 2: The other item was our depreciation and depletion did increase a bit this quarter with increased production levels so that explains that there.
The other item with our.
Depreciation and depletion did.
Did increase a bit this quarter with increased production levels. So that explains that there.
And then the other thing is turning to our balance sheet and our overall leverage position. So that's chart here the height of the Orange bars reflects our our net debts and we define net debt as our credit facility balance less any working capital surplus. So you can see.
Speaker 2: And then the other thing is turning to our balance sheet and our overall leverage position. So this chart here, the height of the orange bars reflects our net debt and we define net debt as our credit facility balance.
Speaker 2: any working capital surplus. So you can see, you know, last year as of September 30th, we had net debt of $13.1 million and what's happened.
You know last year as of September 30th we had net debt of $13 1 million and what's happened.
Speaker 2: As of September 30th this year, our working capital surplus of $6.8 million actually exceeded our credit facility balance. So we end up with that.
The September 30 of this year, our working capital surplus of $6 8 million actually exceeded our credit facility balance. So we end up with that.
Speaker 2: know our recovery there of $300,000 you can think of that as net cash.
Our recovery there are 300000, you can think about it net cash.
Overall, our actual cash balance has been increasing we ended the quarter with $8 1 million.
Speaker 2: Overall, our actual cash balance has been increasing. We ended the quarter with $8.1 million. We have
We have.
Speaker 2: $9 million of our credit facility balance and brought that balance outstanding to 6.5 million as of September 30th. And as I mentioned, our working capital at 6.8 million is after some pretty significant adjustments in Q3 for our share repurchase, which we spent 1.1 million on. And then we declared our first given and that was another 2 million. And despite all of that, our working capital surplus.
$9 million of our credit facility balance and brought that stock goes down into $6 5 million as of September 30th and as I mentioned, our working capital at $6 8 million is after some pretty significant adjustments in Q3 for our share repurchase, which we spent $1 1 million.
And then we declared our first dividend that was another $2 million and despite all of that our working capital surplus.
Speaker 2: we're still above that credit facility balance, which is great.
We're still above that credit facility balance, which is which is great.
Excellent. Thank you Allison.
Speaker 1: Excellent. Thank you, Allison. So we had our most recent semi-annual gas price redetermination happen on August 1st of 2021. Our price increased about 24% over US$7 per mcf.
So we had our most recent semiannual price the gas price Redetermination happen on August 1st of 2021, our price increased about 24% over $7 U S per Mcf. So obviously, our third quarter results included two months of that new place in Q4 wall EBITDA all three.
Speaker 1: So obviously our third quarter results included two months of that new price. In Q4 we'll have a full three months.
And then looking forward on February one of next year, So just less than three months away. We expect another much larger price increase.
Speaker 1: And then looking forward on February 1st of next year, so just less than three months away, we expect another much larger price increase of about 46%. So that'll bring us up. We're expecting over $10 US per MCF.
About 46%, so that'll bring us up we're expecting over $10 U S per Mcf.
So February that would be the first time.
Speaker 1: So in February , that will be the first time our price formula uses the benchmark prices from the second half of this year. And obviously we've had pretty significant appreciations in all three of the benchmarks that are used in our price formula being Henry Hub Gas, UK NBP Gas and Brent Oil equivalent. If we use our independent evaluators price forecast as of September 30th.
Our price Formula uses the benchmark prices from the second half of this year and obviously we've had.
Significant appreciations in all three of the benchmarks that are used in a price formula being Henry hub gas UK, MVP gas and Brent oil equivalent.
If we use our independent evaluators the price forecast as of September 30th.
Speaker 1: You can see in the dark black line going forward, we have several periods of pricing at our ceiling and it compares quite favorably to the price in brown that you can see below that, which was the price forecast used in our last reserve of evaluation effective at the end of last year. So we've had certainly a nice uptick there.
Can see in the dark black line going forward.
We have several periods up pricing at our ceiling.
And it compares quite favorably to the price in Brown that you can see below that which was the price forecast used in our loss reserve valuation effect at the end of last year. So we've had certainly a nice uptick there.
Yeah.
Speaker 1: Moving on to our capital program, as Alison outlined, we've had a pretty great first 15 months of production and cash flow. We're now extremely well positioned to execute our organically funded growth plan. To be clear, our next objective is to completely fill our midstream assets and take us up to a new production plateau of 18 million cubic feet per day.
Moving on to our capital program is also note we've had a pretty great first 15 months of production and cash flow are now extremely well positioned to execute our organically funded growth plan and to be clear. Our next objective is to completely fill our midstream assets and take us up to a new.
Production plateau of 18 million cubic feet per day.
Speaker 1: It's kind of a multi-pronged program. First, we have given notice to increase our gas plant capacity up to 18 million cubic feet a day or half a million cubic meters a day, which is about a 25% increase from the current capacity.
It's kind of a multi pronged program first we have given notice to increase our gas plant.
<unk> to be up to 18 million cubic feet, a day or half a million cubic meters, a day, which is about a 25% increase from the current capacity.
Speaker 1: On the conventional exploratory, besides we're getting close to sputting our first two exploration wells, starting with the 182C1 location, and then followed by the 183B1 location. And as you can see, those sit almost immediately north of our UPGN capray, which is our gas plant, and with success, we would tie that in through a new pipeline connecting directly to the plant.
On the conventional exploration side, we're getting close to spud our first of two exploration wells starting with the 182 C. One location and then followed by the 180 Threep B Y location and as you can see those state almost immediately north of our <unk> and cap rate, which is our gas plant and with success we would.
Tie that in to a new pipeline connecting directly to the plant.
Speaker 1: Next on our Muripic 2-2 development plan, this is our GOMO project.
Next on our Merck at two two.
Development plan. This is our <unk> project.
Speaker 1: The red pipeline that you see on the eastern side of the map connecting from the hub area within the cabaret unit area.
The bread pipeline that you see on the eastern side of the map connecting from the hub area within the cap rate unit area to tie in the 183, well is well underway, we expect that along with the surface production facilities to be in place to allow for that well to be tied in early next year and then we really have.
Speaker 1: to tie in the 183 well is well underway. We expected that along with the surface production facilities to be in place to allow that well to be tied in early next year.
Speaker 1: And then we really have the infrastructure in place to start a broader development plan, starting with the 197, one stimulation and high end through that orange pipeline that you see there. And then following that we have a plan to drill our first fit for purpose GOMO development well with the MERS one location.
The infrastructure in place to start a broader development plan, starting with the 197 one.
Stimulation of the pie and through that Orange pipeline.
Orange pipeline that you see there.
And then following that we have a plan to drill our first fit for purpose go more development well with the Mers one location.
Speaker 1: which the well-pads, it's just at the south of 1831, it's right along the pipeline right away. The well will be drilled in a DVV fashion almost straight south. And the nice thing about this location is we have some pretty interesting uphold conventional exploration potential that we drill through on the way through to the Gomo Cargit. So what the other nice thing is because it's along the right away is we can pide in pretty much a medium.
The well pads sits just to the south of 183, one its right along the pipeline right away.
The well will be drilled in a <unk> fashion almost straight so and the nice thing about dislocation as we have some pretty interesting a poll conventional exploration potential that we drove through on the way through to the to the global targets. So.
This thing is because of this alone the right away as we can tie it in pretty much immediate.
So just in summary.
Speaker 1: So just in summary, obviously we delivered some pretty strong results and coming on production, I think certainly well ahead of expectations. Our funds flow from operations in the first 15 months has been $26 million US. Obviously our third quarter was our best quarter yet with funds flow up from operations of close to $8 million.
Obviously, we've delivered some pretty strong results since coming on production I think certainly well ahead of expectations. Our funds flow from operations in the first 15 months has been $26 million U S. Obviously, our third quarter was our best quarter, yet with funds funds flow from operations of close to $8 million on the <unk>.
Speaker 1: On the debt side, not only did we extend the maturity, we lowered the cost of that facility and we've been really aggressively repaying debt in our first year of operations.
That side not only did we extend the maturity we lowered the cost of that facility and we've been really aggressively repaying are getting their first year of operations as Allison noted as of the end of the quarter, we actually flipped over into effectively a net cash position.
Speaker 1: As Allison noted, as of the end of the quarter, we actually flipped over into effectively a net cash position. So despite having declared a dividend, despite doing our share buyback, we've been able to basically eliminate our debt as of the end of the quarter. So pretty strong methodology. As for the share restructuring, not only was that, I think, an accretive transaction for us.
Despite having declared a dividend despite doing our share buyback.
But basically eliminate our debt as of the end of the quarter, So a pretty strong balance sheet.
As for the share restructuring not only was that I think in an accretive transaction for us it really helped pave the way too.
Speaker 1: It really helped pave the way to a much more cost effective dividend plan. We only bought back about 1.3% of our stock, but it eliminated close to 80% of our shareholder accounts.
Much more cost effective dividend plan.
We only bought back about one 3% of our stock, but it eliminated close to I think 80% of our shareholder accounts all of this together allowed us to start our dividend program.
Speaker 1: All this together allowed us to start our dividend program, both six months ahead of schedule in the third quarter, at six cents U.S. per share, which is a current yield of just over six percent.
Six months ahead of schedule in the third quarter at <unk> <unk> per share, which is a current yield of just over 6%.
We're certainly looking forward to our next price Redetermination and just under three months time.
Speaker 1: We're certainly looking forward to our next price redetermination in just under three months time. Like I said, we're really well positioned to start the second part of our balanced capital allocation model. As Alison noted, we've been significantly under investing in the capital part of our business and doing a lot on returns to stakeholders focused on debt primarily and now with shareholders.
Like I said, we're really well positioned to start the second part of our balanced capital allocation model.
As also noted we've been significantly.
Under investing in the capital part of our business and doing a lot on returns to stakeholders focused on debt primarily in our shareholders, but we really see I think not only have a lot of strong catalysts in the very near term, but we've really created a unique yield plus growth investment opportunity for our shareholders.
Speaker 1: But we really, I think not only have a lot of strong catalysts in the very near term, but we've really created a unique, yield-plus growth investment opportunity for our shareholders. So with that, we're going to turn it over to the question and answer session and just to remind you, click on the Q&A button or alternatively email your questions into social media at alvopextrop.com.
With that we're going to turn it over to the question and answer session. Just to remind you can click on the Q&A button or alternatively email your questions into social media at Alba Petro Dot com.
Okay.
Yeah.
Okay. My first question is relating to the enter flex expansion notice what does that entail and when will it be on the stream.
Speaker 2: Okay, the first question is relating to the interplex expansion notice. What does that entail and when will it be on?
Speaker 1: Yeah, so very simply, it just involves, you know, this is something we had envisioned in our original contract. So it's one extra compressor. There's also an overhead compressor and a dual-tongued Thompson valve that, you know, very simply expands the plant capacity up to half a million cubic meters a day.
Yes, so very simply it. It just involves this is something we had envisioned in our original contract. So it's it's one extra compressor theres also an overhead compressor.
And a dual path Thompson Bell.
You know very simply.
Expand plant capacity up to half a million cubic meters a day.
Speaker 1: The C is an under thirty five thousand dollars US per month under our pre-existing agreement
The fee is another $35000 U S per month under our preexisting agreement and we expect that to be on stream by June 1st of next year.
Speaker 1: And we expect that to be on a stream by June 1st of next.
Yeah.
Can you give an update on the drilling status, the new gone real well.
Speaker 2: Can you give an update on the drilling status of the new Goma Wells?
Yes.
So in order of what I talked about there the 183, well with has already been drilled obviously.
Speaker 1: So in order of what I talked about there, the 183 well is already been drilled obviously. The pipeline is getting very close to completion and then we have some surface production facilities that were installing as well. So that's well on track to be on stream in the first quarter. The 177 well is also a pre-existing well that we've drilled and then once we have that infrastructure in place.
The pipeline is getting very close to completion and then we have some surface production facilities that we're installing as well so that's well on track to be on stream in the first quarter.
The 187, well is also a pre existing wells that we drilled and then once we have that infrastructure in place or then positioned you know we need to get a permit for the additional pipeline which is underway.
Speaker 1: or then positioned, you know, we need to get a permit for the additional pipeline, which is underway.
Speaker 1: And then we would stimulate that well and tie that in. Our target would be to have that happen some time.
And and then we would stimulate that well and tie that in.
Our target would be to have that happen some time.
Speaker 1: probably later in the first half of next year. And at the same time, we have an application into the drill and stimulate the MERS1 location. So it's subject to permitting, but ideally we would be spotting that well sometime mid next year. And then when would...
Later in the first half of next year and at the same time, we were we have an application into drilling stimulate these numbers one location. So it's subject to permitting but ideally we would be spotting that well sometime.
Midnight mid next year.
And then when would you expect the volumes to come on.
Speaker 1: Yeah, so the volumes from 183.1 in the first quarter, ideally we would have the volumes for 197.1 for the second half of the year. And then the volumes for the Merz1 location, again, all this is subject to the permitting timing, but we're hoping to have that on for the fourth quarter.
Yeah. So the volume is from 183, one in the first quarter.
Ideally we would have the volumes for 197, one for the second half of the year and then the volumes for the Mers one location again all of this is subject to the permitting timing.
But we're hoping to have that on for the fourth quarter.
Okay.
What sales price skus teacher, although petro in 2022.
Yes, so right now based on our <unk> and keep in mind, the benchmark pricing the way. It works is we use.
Speaker 1: Yeah, so right now based on our, and keep in mind the benchmark pricing, the way it works is we use a historical blender average. You know, we're almost all the way through, you know, we're...
Our historical Blender average, where almost all the way through.
Speaker 1: Five, four and a half months through the second half of the year here. So we've only got one and a half months left of actual prices that will then dictate our February one price. So that's almost been determined. And as you can see, it's pretty much, it's at the ceiling within our contract.
Five.
What four and a half months through the second half of the year here. So we only got.
One and a half months left of actual prices that will then dictate our February one price. So that's almost been determined and as you can see it's pretty much it.
Is that the ceiling within our contract.
If you use our reserve evaluators price forecast that you saw on that prior slide we would expect to continue at the ceiling price through the entire.
Speaker 1: if you use our reserve evaluators price forecast.
Speaker 1: that you saw in that prior slide, we would expect to continue at the ceiling price through the entire period of 2022.
A period of 2022.
Yeah.
Speaker 1: Sorry, to be clear, that's the price above $10 US per MCS.
Sorry to be clear, that's the price above $10 U S per Mcf right.
Please expand on the volume and pricing both have been gradually increase increasing is the increase in volume due to demands.
Speaker 2: Please expand on the volume and pricing both have been gradually increased. Increasing is the increasing volume due to demand.
Our capacity has numerous let's start with the facts.
Speaker 2: There's this has numerous parts for this. Okay, thank you. Yes, so keep in mind, you know, we originally had a gas sales agreement with, and I'll, I'll, I'll.
Thank you.
So keep in mind, we were.
We only had a gas sales agreement with with.
After <unk> units here, but roughly 5 million cubic feet. A day was our initial firm capacity. So we negotiated that up to basically 11 million cubic feet a day.
Speaker 1: that depict the units here, but roughly 5 million cubic feet a day was our initial firm capacity. So we negotiated that up to basically 11 million cubic feet a day. That's been the firm volume within our gas contract.
That's been the firm volume within our gas contract.
Speaker 1: But we do have a price advantage relative to Petrobras, and there's been...
But we do have a price advantage relative to Petrobras and there has been.
Speaker 1: you know, strong demand on the electricity thermal power generation side as well as overall demand.
Strong demand on the on the electricity thermal power generation side as well as overall demand.
Speaker 1: And all that together has allowed us to deliver not only firm volumes to the heat gas or off-taker, but flexible or interruptable volumes as well. And then in parallel,
And all of that together has allowed us to deliver not only firm volumes to riskier gas our off taker, but flexible or interruptible volumes as well and then in parallel credo, our initial capacity with enter flex under our gas processing facility was actually.
Speaker 1: We know our initial capacity with the inter-flex under our gas processing facility was actually a similar level, so the 11 million cubic feet a day. What we did earlier in the years, we did a higher rate test, and this is partly because of our gas composition and partly because the plant is performing, I think, quite well. We were able to, you know, despite that contractual limit, we were able to pass the facility up to...
Similar levels will be 11 million cubic feet a day, what we did earlier in the year as we did a higher rate test and this is partly because of our gas composition and partly because the plant is.
Performing I think quite well, we were able to despite that contractual limits, we were able to test the facility up to.
To 11, 11, or just over 11 million cubic feet a day of capacity so.
Speaker 1: to 11 or just over 11 million cubic feet a day of capacity. So that's allowed us to increase that. To go further obviously, we need this plant expansion that we're talking about.
That's allowed us to.
Increase that to go further obviously, we need this plant expansion that we're talking about so the limit lately has really been our gas plant capacity, but it's been pretty coincident with I think what works well for our gas sales agreement today as well as from our unit production perspective.
Speaker 1: The limit lately has really been our gas plant capacity, but it's been pretty coincident with, I think, what works well for our gas sales agreement today, as well as from a unit production perspective.
Speaker 1: I would say the unit's actually been, our partners also been dispatched into their thermal power project. So together with our partner, we've actually been able to produce well above the original plan production plateau from the unit. So it's really those three things all together.
I would say the units actually been our partners also been dispatched into their thermal power projects. So together with our partner, we've actually been able to produce well above the original planned production plateau from the unit so.
It's really those three things altogether.
And with the ramp up to 500000 cubic meters a day.
Speaker 2: And with the ramp up to 500,000 cubic meters a day at the EnerFlex facility, will that occur discreetly all at the same time or increasing steps from now until mid-
Enter flex facility will that occurred discretely all at the same time or increase in steps from now until mid 2022, no. It should be all in one big step on on the on June <unk>.
Speaker 1: No, it should be all in one big step on June 1st.
Great. The next question is the total amount of dollar sales from condensate in the quarter and I I'll answer that one.
Speaker 2: Great. The next question is the total amount of dollar sales from condancy in the quarter. And I'll answer that one. So we had just under 10 million of total revenues in the quarter and just under 800,000 of that. So 779,000 came from our condancy.
And so we had just under $10 million of total revenues in the quarter and just under 800000 of that for 779000 mm came from our condensate now.
Speaker 2: The next question is, are you currently selling gas at the floor price due to the changing variables, FX rate, et cetera? Can you provide the current ceiling prices as of October or September month end?
The next question is are you currently selling gas at a floor price due to the changing variables FX rates et cetera can you provide the current ceiling prices as of October or September month.
And I think that you went through that in the slide and we expect to be at the ceiling.
Speaker 2: And I think that you went through that in the slide and we expect to be at the ceiling early next year. Yeah, starting February 1st, you know, based on GLJ's price forecast, the ceiling price actually extends for, you know, past the end of 2022. So I encourage you to look back at that slide and if you have any remaining questions, you know, certainly feel free to reach out to cows and their myself.
Early next year.
Starting February one.
Based on <unk> price forecast ceiling price actually extends for for past. The end of 2022. So encourage you to look back at that slide and if you have any remaining questions certainly feel free to reach hotels or myself.
With your improved balance sheet and strong cash flow do you see any M&A activity as possible in 2022.
Speaker 2: With your improved balance sheet and strong cash flow, do you see any M&A activity as possible in 2020?
Yeah.
Speaker 1: Yeah, I think M&A activity is always possible, but it's something that we don't talk about it until it's done. To be fair, there's been some very large petrobras packages that have been selling at very high prices.
I think M&A activity is always possible, but it's something that we don't talk about it until it's done.
To be fair there has been some very large petrobras packages that have been selling at very high prices. So I would expect certainly in the onshore industry in Brazil is going to be it's changing rapidly. They all of a sudden you're going to have all independent parties.
Speaker 1: So, I would expect, certainly, in the onshore industry in Brazil is going to be, it's changing rapidly. All of a sudden you're gonna have all independent parties, no patch of brass involvement. I, this will be a slow process, but over time, I think you're going to start to see much more activity than you have historically. So something that's hard to comment on.
No Petrobras involvement.
This will be a slow process, but overtime I think youre going to start to see.
More activity than you have historically, so something thats hard to comment on it though.
We did have a question about our button and in Canada. It is Remembrance day Tomorrow November 11th and in November we were poppy and remembering that she served on behalf of our country. So that is my feedback.
Speaker 2: We did have a question about our buttons and in Canada, it is remembered today tomorrow November 11th and in November we wear poppies in remembrance of veterans that serve on behalf of our country. So that is what these are.
Yeah.
Speaker 2: And we actually have no further questions.
And we actually have no further questions.
Speaker 1: Excellent. Well, thank you everyone for attending. Look forward to our next call. And if you think of any questions afterwards, certainly again, reach out to us and our myself. And thanks again for your kind.
Excellent well. Thank you everyone for attending look forward to our next call and if you think of any questions. Afterwards, certainly again reach hotel center myself and thanks again for your attendance.