ALV announced the company's January sales volumes and semi-annual natural gas price update on February, and the markets have acted negatively since. January sales volumes averaged 1,699 boepd which were negatively impacted by reduced nominations from offtaker, Bahiagás. Natural gas price under the long-term gas sales agreement with Bahiagás has been adjusted to BRL1.94/m3 or $12.36/Mcf. With the appreciation of the BRL relative to the USD in the second half of 2023 compared to the first half of 2023, the BRL contracted price decreased from BRL1.99/m3 as of August 1, 2023 to BRL1.94/m3 as of February 1, 2024. The new contracted price will apply to all natural gas sales from February 1 to July 31. Weak January sales volume and price declines appear to be the drivers of the decline. Investors are clearly worried about the sustainability of the dividend, though the company does currently have a strong balance sheet.
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