Q2 2025 Alvopetro Energy Ltd Earnings Call
And Adrian the debt, our vice president of asset management.
Good morning, everyone. Thanks for joining us today, just a few administrative points before we begin we are recording today's call and we will have a replay available on our website. Later on this afternoon I'm all attendees have been placed in listen only mode for the duration of the webcast, but we will have.
Session at the end of our presentation. So if you have any questions you can start sending those and now you've seen this in Q&A button that you should see on your screen if you've dialed in by phone you can send us any questions to social media at almost Petro dotcom.
Lastly, we do go through various non-GAAP measures and we make forward looking statements throughout this presentation. So we do encourage you to review all the cautionary statements and additional disclosures on our corporate presentation and on our most recent management discussion and analysis of.
That was just released yesterday for Q2.
Alright, Thank you Alton.
So as we previously announced we did upgrade our gas sales agreement.
US late last year.
As part of that we did increase our for oil and gas sales volumes by 33%.
That combined with some considerable operational successes.
It has resulted in a very strong start to 2025 for us.
As per last quarter.
<unk> was up 41% quarter over quarter in Q1, and we had a similar.
Okay.
Pretty consistent with Q1 and up 50% from from the previous quarter second quarter of last year.
We did have some facility maintenance and inspections in Brazil.
That did impact the quarter.
And that was offset by the addition of our new production in Western Canada averaged a 138 barrels of oil per day.
As you can see here our July production did continue at pretty consistent levels.
Bridging almost 2300 barrels of oil equivalent per day in Brazil.
<unk> 34 barrels of oil per day in Canada.
And.
Adrian I'll walk through this later, but our strategy here through the rest of this year is to add additional 100% working interest productive capacity in Brazil, with a target of getting to 3000 barrels of oil equivalent per day.
And be in a position again to increase our firm sales volumes for 2026.
And then in Canada, Youll see we have drilled an additional couple of wells that will be brought on production. Here later this month and we expect to drill a couple more as we exit this year.
So just jumping in from our key highlights from our results released yesterday and this first slide here that will go through with our operating Netback again, a reminder, that is a non-GAAP measure.
One of our operating profitability, we express it in per barrel of oil equivalent and that's the green bars that you see on the chart.
So we're taking care of that we start with our realized price at the very top of the chart, we deduct off royalties in the Orange bar.
The Gray bar, we've aggregated both our production expenses and transportation expenses and then the net result is our operating netback. So looking at Q2.
Q2, 2025, we saw marginal decrease 47 per Boe.
Realized price.
Overall average realized price of company wide. So we did actually have an increase in our realized natural gas price in Brazil up 2% to 60.
<unk> 62 per Mcf that was bringing on our Canadian operations. Our overall companywide realized price did decrease just marginally.
On the royalties that Orange bar, our royalties were down 463.
From last quarter, if you recall our last earnings call. We did have some historical adjustments in Sudan recognize relating to a dispute on our gross overriding royalties on natural gas.
So without those historical amounts in that we did see a decrease in our overall royalties this quarter on an effective royalty rate as a percentage of sales it was four 7%.
Which was four 2% in Brazil, and then in Canada.
<unk>, 3% in Canada.
I think for our crown royalty charges.
And gross overriding royalties applicable and then on freehold lands, our freedom with royalty rate as well as Saskatchewan region, our surcharge.
Moving on to production expenses and transportation expenses, we've aggregated out in that Green bar there.
551, this quarter, including production expenses up to 537, which is relatively consistent with last quarter and then we do have transportation expenses in Canada Africa. Meanwhile, trucking.
That works out to 14 14 cents per Boe.
So overall, we generated a netback of $54 72 that was up close to $4 from last quarter.
And that includes Brazil operating net back of 56, eight which was up over $5 from last quarter and then in Canada.
30 to $32 seven.
Operating netback, so overall really strong net backs.
In place here to look at our operating margin, which is that line at the top that's our operating netback expressed as a percentage of our realized price.
We're at 87% this quarter and overall for the last six quarters, well above 80% and that's really best in class snapback margins compared to companies operating in Canada and in South America and you layer in the fact that we have a very.
Very low effective rate in Brazil were eligible for tax incentives.
15% and the fact that in Canada.
Significant tax pools to offset our current earnings in Canada. So we're not expecting taxes in Canada. This year.
Overall that allows us to generate really strong funds flow from operations.
So going into the funds flow here.
Mind, you that cash flow from operating activities for changes in working capital. So this chart just highlights the change from Q1 of $9 2 million in this quarter, we're at $1 1 million to $10 4 million of funds flow.
All of that is due to that royalty change.
<unk> royalty amounts that I talked about in the operating netback discussion.
Similarly on net income overall operating netback higher with those lower royalties.
Depletion and depreciation expense also.
The decrease compared to last quarter, and then those were offset by lower foreign exchange gains. This period, and then higher current and deferred tax. So overall net income went up about 800000 to $6 8 million this quarter.
On the balance sheet side. These green bars that you see go through our working capital, including cash balances we've shown that since we started.
Natural gas sales back in July 2020, so over five years now.
This quarter, our operating working capital was $6 8 million. So we did see a bit of a decrease from Q1 and Q Q4, 2024, just we have had higher capital spending in the last two quarters as you've seen so that has resulted in a decrease in working capital that seller.
Very strong working capital position and our cash balance to sell 15 million as of.
June 30th.
We are debt free as well.
Alright, so just on our dividend history.
All the way through last year, we paid the dividend back to U S nine cents per share quarterly.
With the new.
<unk> gas sales agreement and the higher sales volumes that I walked through earlier, we did increase the dividend starting in the first and second quarters of this year 10 cents per share quarterly and since inception, when we started the dividend in the third quarter of 2021.
<unk> now paid $58 million U S or $1 60 U S per share back to shareholders over that time.
Bob.
Just walking through our more I would say disciplined capital allocation model that we've introduced quite a while ago again, our model is to reinvest about half of our cash flows and growth and returning the other half to stakeholders.
If you look at the chart on the left hand side, the green lines with the black dots are all a cash inflows each quarter most.
Most recently as Alison walked through $10 4 million of funds flow from operations. This quarter and then all of a different stocking bar show the cash outflows in each quarter. So the yellow is the the.
The reinvestment in the various shades of green shows the returned to stakeholders.
Alison noted we did have higher capital expenditures.
Clearly in the last two quarters here as we have simultaneous.
Investment programs happening, both in Canada, and in Brazil, but we would expect that at the end of the fourth quarter.
Reverse and slower slowdown a little bit.
If you look at the pie on the right hand side.
You can see since starting up production.
Natural gas in Brazil, we've.
We've had cash flow from operations, our funds flow from operations of over $183 million now.
49% of Thats been reinvested, 48% of its been returned to stakeholders in the remaining 3% represents the portion of what we felt that cash and working capital position.
And walked through.
Yeah.
So we've established a strong gas infrastructure platform and now our focus is firmly set on our next growth objectives.
Near term target is to be at 18 billion standard cubic feet, a day or 3000 barrels of oil equivalent which will roughly it fill our current gas plant capacity for.
Longer term vision is to double this <unk>.
So reaching these objectives is planned to come from a combination of our assets are first is our core base of operations just cabaret. The cavalry unit has been performing very well and we're looking to further expand this unit capacity with our development well program. This program is currently underway with three of the five wells drilled in our Portland.
Finishing drilling these funds.
However, our biggest growth opportunity is the <unk> project, which is 100% working interest from Petronas is just north of Calgary.
We had a very successful completion late last year on our 180, 383, well, which saw production now.
That focus.
The 183 deep for well it was thrilled earlier this year.
For this asset DLT is assigned to combination of tube reserves contingent and prospective resources to this opportunity.
We're working to migrate.
Production cash flow and support over the longer term growth objectives.
And just some more detail on this main growth opportunity and work to do so.
Like I mentioned is about 100% working interest off of petrol and it's just north of Calgary pipeline connected to our sales infrastructure. So earlier. This year, we finished drilling the <unk> four well.
And we're following which followed up on the <unk> hundred success of last year.
Larger shown on the right hand side of this fiber can be identified 61 meters of net pay over three true ups to secrets is six two to $6 four misses the same formation.
Being produced and cabarets just across the fault and it's a bit deeper.
The well was completed.
After we drilled or we completed with sliding sleeves, indicating program over eight.
Eight spots within the covers two formation and we have just finished the <unk>.
Completing seven of these leads and we're in the process of configuring the well for for initial production right now.
Note that in our 183, three well we have production only from the top sequenced subsequent six four which is in the four wells to top three.
<unk> there.
The cursor on the rig.
So for the <unk> four well we've completed.
$6 to $6 three.
Commingling all of that in particular.
<unk>.
Later this quarter.
Alright so.
Just moving on to our Western Canadian entry that we announced on February 5th for this year.
To remind you our initial focus areas on the mend we'll stack.
This is a resource.
Straddles the Alberta, Saskatchewan border were on the Saskatchewan side.
The border.
It's a multi zone area you can see up to eight different horizons that can be targeted our first two wells targeted the general petroleum in the alloy administer formations that you see there.
And so this is a pre.
Exciting plenty I would say.
Stacked multi zone potential and it's really something that's being reinvigorated through the application of <unk>.
Multi lateral drilling technology.
There is a large amount of original oil in place in roughly three to five meters thick sands that were targeting here with excellent reservoir quality.
So the Red Dash line that you see on the map here as our AMIA with our partner the yellow.
As our landscape that you see.
As we announced I think on our last call. We did drilled our first two earning wells to earn into the display.
The 100% towards 50% in those first two wells were drilled.
Neil Burger <unk> and lash for that.
More recently, we just finished drilling the next two wells both at Big Gully C. On the northern part of the map sheet there.
And we want to drill both of those wells with eight open whole legs.
Totaling over 90 kilometers.
Horizontal reservoir access and we would expect both of those wells to be on production later this month so.
I'd say were extremely pleased with this entry into Western Canada.
And part of the reason we did this as we've got exposure to a much lower geological risk I would say.
And competitive service environment, our individual well costs are much lower and we've got the ability to very effectively apply leading edge technology to a proven resource that can generate very strong economics.
Short cycle times, and rapid payouts and I think we've got a lot of opportunity in our base and that really is starved for capital.
And the nice thing is we've got a big inventory of locations that we can get after year end.
To put this all in perspective, I think it is kind of remarkable that we signed this deal on February 5th of this year.
Four wells drilled and we'd expect to have all four on production within seven months.
Starting out here, so we're pretty excited about it.
Uh huh.
Just talk about that with the individual well performance from the first two wells that we brought on production.
The two kind of more of straight lines that you see here that the upper ones.
The Blue line is the type curve that we had established before we did the farm in.
And then the dashed line is just basically 80% of that type curve, so respectively would recover 121000 or <unk> 97000 barrels.
Of oil.
Expected ultimate basis, and you can see the rates of return at a $70 <unk> at that type curve can generate close to 100% rates of return payouts of basically a year.
Extremely strong economics, and then from the individual well performance the more jittery lines, you'll see that the.
The loss per well then re one was the first wells that came on production.
And then Neal Burk Salt well was the blue one so you can see the first one performing within that expectation range, and then Neil Barth well significantly exceeding expectations.
So what we've done here is just created a indicative multiyear development. It shows four wells being drilled this year and then basically 12 wells per year, a total of 52 wells so roughly half of the inventory that we're currently seeing but it just gives you an idea of what this looks like on a on a multi year.
Basis, the Green lines show the.
The colors in the black lines show the production.
The solid and dashed lines match those type curves that you saw on the previous slide.
It's interesting the REIT had the green lines match, the right hand axis. So.
You can see for a maximum capital exposure up between seven and say $9 million, we have the opportunity here just at those type curves to build somewhere between the 1100 Fortune 500 barrels of oil per day production platform that after returning all the capital has the potential of <unk>.
Generating free cash flow of up to $8 million. So.
We're off to a good start and we're <unk>.
We're excited about this.
So to conclude.
I think we continue to deliver some pretty strong results, obviously, we've still got very attractive.
Natural gas prices with industry, leading operating net backs and margins.
Our strong Q1 and Q2 results this year.
About $80 million so.
<unk>.
<unk>.
We're off to a good start and we're very excited about this.
<unk> production growth.
We've got a clean balance sheet very good free cash flow generation capacity that helps really underpin that.
So to conclude.
I think we continue to deliver some pretty strong results, obviously, we've still got very attractive.
A more balanced capital allocation model that I reviewed earlier.
We're value investors, we're still trading at less than our one P M Evs and about 45% of our to be Mtvs for yield investors at 10 cents per share.
Natural gas prices with industry, leading operating net backs and margins are strong Q1, and Q2 results this year.
No.
Strong production growth.
Quarterly dividend translates into a yield of over 9% and for growth investors I think we've got a very exciting organically funded capital program.
We've got a clean balance sheet very good free cash flow generation capacity that helps really underpin that more balanced capital allocation model that I reviewed earlier for value investors, we're still trading at less than our one P M atvs and about 45% of our <unk> for <unk>.
That has the potential to unlock an awful lot of value, especially when you consider or consider it relative to our existing enterprise value and I think now with the ability to deploy capital in the highest rate of return opportunities both in Brazil, and Western Canada, I think we're positioned better than ever and I think that's a.
<unk> investors that Tencent U S per share quarterly.
Quarterly dividend translates into a yield of over 9% and for growth and investors I think we've got a very exciting organically funded capital program.
Result of that we've significantly strengthened our capital allocation model.
That has the potential to unlock an awful lot of value, especially when you consider consider it relative to our existing enterprise value and I think now with the ability to deploy capital in the high rate of return opportunities both in Brazil, and Western Canada, I think we're positioned better than ever and I think that's a.
I think Q3 in particular is going to be a very exciting quarter for us we've had a lot of simultaneous activity here and if you think we're going to bring on four wells new wells out of the unit.
We've just completed this the completion of the 183 D for well, which looks extremely exciting expect to have that well on production. Later this month and then the latest two wells that we drilled in Western Canada also coming on online roughly around the end of this month. So it's an exciting time certainly to be novel pets.
Result of that we've significantly strengthened our capital allocation model.
I think Q3 in particular is going to be a very exciting quarter for us we've had a lot of simultaneous activity here and if you think we're going to bring on four wells new wells out of the unit.
Shareholder.
And with that.
We've just completed this the completion of the 183 D four well, which looks extremely exciting expect to have that well on production. Later this month and then the latest two wells that we drilled in Western Canada also coming on online roughly around the end of this month. So it's an exciting time certainly to be in <unk>.
I'll turn it over to the question and answer period.
Okay, a few questions.
How many drill locations already of America.
America Q2, and when do you expect to drill the next well on that property.
So.
Shareholder.
If you look at our broader.
And with that.
Corporate presentation, where you can see is there some actual theirs.
Ill turn it over to the question and answer period.
Some aerial photos of the three well pads that we've got so.
Okay, We've got a few questions.
Our 191, well is producing from one pad, we've got our field production facility.
How many drill locations already at Merck Q2, and when do you expect to drill the next well on that property.
At our 183.
<unk> three well from another AD in the Deepak 183, whereas the money redeployed.
Yeah.
So.
If you look at our broader corporate presentation, where you can see is there some actual theirs.
Okay.
Okay.
We can probably grow at least six additional locations from those pads and we're looking at licensing another pad.
Some aerial photos of the three well pads that we've got so our.
197, one well is producing from one pad, we've got our field production facility.
To access some of the more southern locations and Thats in the works right now.
At our 183, a three well from another pad in the Deepak 183, whereas the <unk> four well was just drilled and completed from sort of three different pads, we can probably grow at least six additional locations from those pads and we're looking at licensing another pad.
So I think the second part of that was when will the next wells being drilled.
We're looking at the contracting and procurement and all of that for those those wells practically speaking, we're probably looking at the.
And into the early part of next year, we'll get the results from this.
To access some of the more southern locations and Thats in the works right now.
Kirk.
The four wells that we're bringing on production incorporate that and then look at restarting drilling.
Yeah.
So I think the second part of that was when will the next wells being drilled.
Next year.
Okay.
We're looking at contracting and procurement and all of that for those those wells practically speaking, we're probably looking at the.
Do you have any expectation on production rates from the 183 D farewell.
Yes, we don't really like those that production guidance, but if you look at our 183, a three well it's been.
Into the early part of next year.
We will get the results from this this current.
The four wells that we're bringing on production incorporate that and then look at restarting drilling next year.
Producing about 53 <unk> per day, roughly and Thats just from that upper sequence that Adrian talked about so we don't really want to speculate but we're obviously completing more of it.
Okay.
Do you have any expectation on production rates from the 183 D for awhile.
And we're optimistic about it.
Yes, we don't really put out those that production guidance.
Yeah.
Do you have any joined paths for block, 23% a portion of the block that has not hurt America Q2.
If you look at our 183, a three well it's been.
Producing about.
53, <unk> per day, roughly and Thats just from that upper sequence that Adrian talked about so we don't really want to speculate but we're obviously completing more of it.
Great.
Yes, we actually just recently we have another prospect that we had identified there we've made an application to the A&P to extend the block.
And we're optimistic about it.
And.
Okay.
We're we're working through all the permitting to do that.
Do you have any joined hands for block, 183% a portion of the block that is not part of America Q2.
When the new deadline, but we've got several years to tenants.
Yeah.
Great.
To drill that location. So it's not in the near term, but the answer is yes.
Yes, we actually just recently we have another prospect that we had identified there we've made an application to the A&P to extend the block.
What are you realizing for Canadian.
Oil sales relative to WCS pricing.
And.
We're we're working through all the permitting to do that.
I think in Q2, our average realized price.
When the new deadline is but we've got several years to tenants.
That works out to just under $40 million, probably about a discount of around $9 million to $10 million.
Yeah.
To drill that location. So it's not in the near term plan, but the answer is yes.
Okay.
From WCS in.
What are you realizing for Canadian oil cells, if oil sales relative to WCS pricing.
Part of it.
Roughly what we're expecting going forward.
Staying on the Canadian side.
I think in Q2, our average realized price and has that worked out to just under $47.
Just ask that question Neal Burk, NOL being well above the type curve.
About a discount of around nine to $10 Canadian.
Can you discuss the different than flow rate wells drilled in Canada.
From WCS.
And it seems to me that play.
In the in the partner, which is I think roughly what we're expecting going forward.
I think I got all of that yes.
Staying on the Canadian side.
A lot of this comes together in a part of the part of the variances.
There's a specific question about Neal burk, NOL being well above the type curve.
I think our operator did an amazing job staying in most of the time.
Can you discuss the difference in flow rates between the two wells drilled in Canada, and how homogenous teams being a play.
<unk> is one of the factors that can contribute to.
Different operator operator.
Operators, achieving different results the oil gravity oil viscosity.
Yeah.
And the.
I think I got all that yes, a lot of this comes down to doing our part of the part of their variances I think our operator here did an amazing job staying in zone. Most of the time. So I would say that is one of the factors that can contribute to.
Proxy permeability are also big factors I would say.
There is.
As you move through the play you do.
There are some geological variability.
Considerations certainly incorporate we are shooting some seismic around out.
Different operates eight operators achieving different results the oil gravity and oil viscosity.
Barry.
To help manage any of those potential risks.
And the.
Proxy permeability are also big factors I would say.
That's why you look.
We're looking at restarting withdrawing probably sometime in December so that we can incorporate all of that three D seismic and follow up on that good result that we are.
Okay.
If there is I'm not.
As you move through the play you do.
There are some geological variability.
At year earlier this year.
Considerations certainly incorporate we are shooting some seismic around Neal burk south area to help manage any of those potential risks and that's why you'd look.
Uh huh.
Alright.
Yes.
Do you have a view on your outlook for exit production in Brazil. This year.
Looking at restarting the drilling probably sometime in December so that we can incorporate all of the three D seismic and follow up on that good well results that we.
Yeah Yeah.
We typically don't provide that type of guidance.
At year earlier this year.
And I think with the capital plans that we have over there.
Short to medium term I think our near term objective of getting to that 3000 barrels of oil equivalent or 18 million cubic feet a day.
Sorry, I'm just going to leave.
Do you have a view on your outlook for exit production in Brazil. This year.
Firmly in our brands.
Okay.
Side of it I think we've put all the pieces in place there that depending on the capital activity.
Yes.
We typically don't provide that type of guidance.
And the pace of that activity you can kind of.
I think with the capital plans that we have over the short to medium term I think our near term objective in Brazil are getting to that 3000 barrels of oil equivalent or 18 million cubic feet a day.
We put all the building blocks with those type curves hopefully we can continue to exceed those but I think if you use the type curve.
The development plan that we put into the areas.
It's firmly in our grasp.
Maybe it's conservative with respect to the pace at which we would ultimately do this but it gives you directionally.
On the Canadian side of it I think we put all the pieces in place there that pedal depending on the capital activity.
A good sense.
Yeah.
And the pace of that activity you can kind of.
Any plans to repeat share repurchases in Q3.
We put all the building blocks with those type curves hopefully we can continue to exceed those but I think if you use the type curve.
Sure.
Uh huh.
Okay.
The development plan that we put in there is.
Okay.
Sure.
And that's something that we're continuing to look at.
Maybe it's conservative with respect to the pace at which we would ultimately do this but it gives you directionally a good a good sense.
In the future.
Okay.
Okay.
Looking at the balance of that.
Yeah.
Any plans to repeat share repurchases in Q3.
Between.
At buybacks.
This year.
The Canadian production rising do you see Canada, becoming an equal size to Brazil in the next three to five years.
Well, we had been to be clear.
There is a modest amount of shares being purchase every day and that's something that the board will continue to look at.
Three to five years.
Yes.
In the future.
I think what you're speaking if you look at the well cost for the wells that we're focused on in the Mercury two area right now.
The portion of the returns that go to stakeholders looking at the balance of that.
Between dividends and buybacks.
Swells that look similar to the 183 D for well.
The Canadian production is rising do you see Canada, becoming an equal size to Brazil in the next three to five years.
They are just they are more catheter deeper.
Completions are more expensive so practically speaking.
They are probably a little bit more.
Three to five years.
<unk> expense.
Expenses, certainly on a per well basis, when you compare it to 50% of our.
Practically speaking if you look at the well cost for the wells that we're focused on in the Mercury two area right now.
I hope it holds multilateral wells those wells on a gross basis our costs.
Swells that look similar to the 183 D for well.
The loss of $8 million.
Thank you.
They are more cat they're deeper.
And our shares 50% or so.
Completions are more expensive so practically speaking.
The other interesting thing what I tried to highlight what that indicative multiyear development plan in Canada, it's pretty quickly because of those rapid payouts pretty quickly you get to <unk>.
Probably a little bit more.
Expenses, certainly on a per well basis.
When you compare it to 50% of.
Self funding state.
That opened a whole multilateral well those wells on a gross basis, our costing about one $8 million Canadian not in U S dollars at our share is 50% or so.
But total investment exposure without a hypothetical.
Program.
Seven to nine or even $10 million of Canadian range and that includes the initial two earning wells that we've drilled so that's the other nice thing about the Canadian piece of it can become self funding pretty quickly.
The other interesting thing what I tried to highlight what that indicative multiyear development plan in Canada, it's pretty quickly because of the rapid payouts pretty quickly you get to a self funding state, but the but total investment exposure on that hypothetical 50, well program is in the 7%.
Do you have any geopolitical comments regarding Brazil, as it relates to oil and gas operation everything seems stable.
Everything.
Nine or even $10 million Canadian range and that includes the initial two earning wells that we've drilled so that's the other nice thing about the Canadian piece as it can become self funding for it pretty quickly.
Our newest around tariffs et cetera.
Yes, I think there's a lot of noise in the market sort of certainly around the tariffs and it's not isolated to Brazil I think.
Canada is impacted by it.
Even with a greater extent just given the relative exports from Canada to the U.
Do you have any geopolitical comments regarding Brazil, as it relates to oil and gas operations everything seems stable, but with the recent.
The us versus I think in Brazil, only about 4% of their exports are going to.
States.
News around tariffs et cetera.
Closer to 30% is going to for example, China.
Yes, I think theres a lot of noise in the markets around certainly around the tariffs and it's not isolated to Brazil I think.
Uh huh.
A good barometer I think for what the how the market feels about that has helped with the bridge.
Canada is impacted by.
To even a greater extent just given the relative amount of exports that come from Canada to the U S versus I think in Brazil, only about 12% of their exports are going to the United States.
William currencies performing relative to other currencies relative to the U S dollar, but I think theres been over 12% appreciation of the currency this year and even some of the more recent tariff announcements the currencies actually appreciate it so.
I think closer to 30% is going to for example, China.
Yeah.
That's probably a better scorecards then my personal opinion.
A good barometer I think for what the how the market feels about that has helped us.
But things.
Things are growing quite well in Brazil, I think that the.
Brazilian currencies performing relative to other currencies relative to the U S dollar.
<unk>.
A track record of stability.
I think theres been over 12% appreciation of the currency this year and even since some of the more recent tariff announcements the currencies actually appreciate it so.
Our contracts if anything the government has been very encouraging and implemented.
We can qualify for this enhanced income tax.
A reduced income tax program, just 15% that's sort of a much more favorable than we have.
That's probably a better scorecards in my personal opinion.
But.
In Canada.
Things are going quite well in Brazil, I think that the.
The government is trying to stimulate activity through the reduction of royalties, especially for small and medium sized company. So.
<unk>.
A track record of stability.
Of contracts if anything the government has been very encouraging and implemented the fact that we qualify for this enhanced income tax.
I think I think it's pretty good.
Place to be.
A reduced income tax program of just 15% that's certainly much more favorable than we have.
Yeah.
Since our last webcast.
Webcast.
Net color on somebody is asking how you are doing pretty good.
In Canada.
Governments trying to stimulate activity through the reduction of royalties, especially for small and medium sized companies. So.
Around them pretty well.
<unk> is not that easy so hence the reason I don't have that on but.
I think I think it's a pretty good.
A combination of my neck, and my shoulder bag, what's going well thank you for asking.
Place to be.
Okay and that is it or.
Uh huh.
Hi, Mike Yeah, that's an anomaly since our last webcast karri did have a net color on somebody is asking how you are doing pretty good I can move it around pretty well.
Sure.
Alright, well. Thank you everyone for participating we look forward to doing this again in about three months time, and if you have questions in the interim please give any one of US a call and thank you again for the support.
Tying of times not that easy so hence the reason I don't have that on but.
Thank you.
It's a combination of my neck, and my shoulder, but no what's going well. Thank you for asking.
And that is it or.
Questions.
Alright, well. Thank you everyone for participating we look forward to doing this again in about three months time, and if you have questions in the interim please give any one of US a call and thank you again for the support.
Thanks, everyone.