An anonymous director reports

ALVOPETRO ANNOUNCES Q4 2023 DIVIDEND OF US$0.14 PER SHARE AND COMMENCEMENT OF CABURE UNIT REDETERMINATION PROCESS

Alvopetro Energy Ltd. has declared a fourth quarter 2023 dividend and is updating on its Cabure unit redetermination process.

Q4 2023 dividend

The company's board of directors has declared a quarterly dividend of 14 U.S. cents per common share, payable in cash on Jan. 15, 2024, to shareholders of record at the close of business on Dec. 29, 2023. This dividend is designated as an eligible dividend for Canadian income tax purposes.

Dividend payments to non-residents of Canada will be subject to withholding taxes at the Canadian statutory rate of 25 per cent. Shareholders may be entitled to a reduced withholding tax rate under a tax treaty between their country of residence and Canada.

Cabure redetermination process

As previously disclosed, the Cabure natural gas discovery extends across two blocks owned by Alvopetro (blocks 197 and 198) and two adjacent blocks owned by a third party (blocks 211 and 212). Under Brazilian legislation, petroleum accumulations straddling two or more licensed blocks must undergo unitization (pooling) in order to promote efficient and fair exploration and development. In April, 2018, Alvopetro and the adjacent resource owner finalized the terms of the unit operating agreement, the unit development plan and all related agreements, with Alvopetro's initial working interest share of the unitized area being 49.1 per cent and Alvopetro's 50.9-per-cent partner being named initial operator. Under the terms of the UOA, the working interest split is subject to redeterminations. The first redetermination was to occur 18 months after Alvopetro commenced production allocations or on Jan. 5, 2022. The first redetermination was deferred to include data up to Oct. 31, 2023, and has now commenced.

Under the provisions of the UOA, the parties agreed that the redetermination would be evaluated by an independent expert. Pursuant to the provisions of the UOA, where an expert is engaged, the expert's determination shall be made using what is commonly referred to as the pendulum method of dispute resolution. Under this method, the expert is not required or permitted to provide their own interpretation, but is required to select the single final proposal (between the two partner's respective final proposals), which, in the expert's opinion, provides the most technically justified result of the application of the relevant information and data and material provided to the expert consistent with the UOA and all related documents.

The expert has been engaged and the schedule estimates a final decision to be made near the end of the first quarter of 2024. The outcome of the expert's decision and the resulting working interest to Alvopetro following the decision are uncertain. Based on proposals presented by each party, Alvopetro's working interest may be adjusted higher or lower and the resulting impact on Alvopetro's reserves and future cash flows may be material.

About Alvopetro Energy Ltd.

Alvopetro Energy's vision is to become a leading independent upstream and mid-stream operator in Brazil. The company's strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of its Cabure natural gas field and its strategic mid-stream infrastructure.

We seek Safe Harbor.