Mr. Corey Ruttan reports

ALVOPETRO ANNOUNCES SEPTEMBER 2023 SALES VOLUMES AND AN OPERATIONAL UPDATE

Alvopetro Energy Ltd. has released its September, 2023, sales volumes and an operational update.

September, 2023, sales volumes

September sales volumes averaged 1,203 barrels of oil equivalent per day, including natural gas sales of 6.8 million cubic feet per day and associated natural gas liquids sales from condensate of 69 barrels of oil per day, bringing its average sales volumes to 1,696 boe/d in the third quarter of 2023.

Its offtaker, Bahiagas, reduced offtake in September due to a temporary reduction in end-user consumption. As a result, natural gas nominations and production were below Bahiagas's take-or-pay limits within its contract. Its contract requires that Bahiagas pay Alvopetro for the greater of actual gas delivered in the month or 80 per cent of the firm contracted volumes for the period. Its firm contracted volume is currently 300,000 cubic metres per day (1) or 10.6 MMcf/d (1) before adjusting for heat content of its delivered natural gas. As such, Bahiagas is required to pay Alvopetro for gas not taken up to 8.5 MMcf/d (1). On a heat adjusted basis, this amounted to 1.2 MMcf/d (35 MMcf) in September, which is in addition to the September sales volume noted above of 6.8 MMcf/d. This volume paid but not taken by Bahiagas is to be compensated by Alvopetro in the future through natural gas deliveries in excess of 9.5 MMcf/d (1). Natural gas deliveries during October have been approximately 8.7 MMcf/d to date.

(1) Volume represents contract volume based on contract referenced natural gas heating value. Note that Alvopetro's delivered natural gas sales volumes, as reflected in the attached table, are prior to any adjustments for heating value of Alvopetro natural gas. Alvopetro's natural gas is approximately 7.5 per cent hotter than the contract reference heating value.

Operational update

In July, it spudded its 183-A3 well on its Murucututu natural gas field. It is currently drilling at 3,383 metres, and its plan is to drill the well to a 3,480-metre total depth.

On its Bom Lugar field, it drilled the BL-6 well to a total depth of 3,244 metres. The well was completed in two intervals. The first Caruacu interval from 2,591 to 2,598 metres was perforated, and 28 barrels of fluid were swabbed over a 12-hour period with 17 barrels of 29-degree API oil and 39-per-cent water cut. The second Caruacu interval from 2,486 to 2,598 metres swabbed 101 barrels of fluid over 24 hours with 89 barrels of 33-degree API oil and 12-per-cent water cut. The company completed an organic acid stimulation and is equipping the well with an artificial lift system, and expects to have the well on production next week.

Coming investor conference

Corey C. Ruttan, president and chief executive officer, will present at the Schachter Catch the Energy Conference on Saturday, Oct. 14, 2023, at 11:30 a.m. Mountain Time.

Date:  Oct. 14, 2023

Time:  11:30 a.m. to 12:05 p.m. Mountain Time

Location:  Mount Royal University (4825 Mount Royal Gate Southwest, Calgary, Alta.), Bella concert hall and Ross Glen hall (presentation room 1)

Tickets are available to be purchased.

The conference is hosted by Josef Schachter, CFA, author of the Schachter Energy Report. Alvopetro's presentation will include a moderated question-and-answer session. In addition, company personnel will be available throughout the day at Alvopetro's booth to answer investor questions.

Corporate presentation

Alvopetro's updated corporate presentation is available on its website.

Alvopetro's vision is to become a leading independent upstream and mid-stream operator in Brazil. Its strategy is to unlock the onshore natural gas potential in the state of Bahia in Brazil, building off the development of its Cabure and Murucututu natural gas fields and its strategic mid-stream infrastructure.

We seek Safe Harbor.