Mr. Corey Ruttan reports

ALVOPETRO ANNOUNCES DECEMBER 2023 SALES VOLUMES AND INITIAL 183-A3 WELL TEST RESULTS

Alvopetro Energy Ltd. has released December, 2023, sales volumes and initial well test results from its 183-A3 well.

December and Q4 2023 sales volumes

December sales volumes averaged 2,331 barrels of oil equivalent per day, including natural gas sales of 13.3 million cubic feet per day, associated natural gas liquids sales from condensate of 105 barrels of oil per day and oil sales of seven barrels of oil per day, based on field estimates, bringing the company's average sales volumes to 2,143 barrels of oil equivalent per day in the fourth quarter of 2023.

Initial well test 183-A3

The company completed drilling the 183-A3 well on its 100-per-cent-owned Murucututu natural gas field in October. The well was drilled to a total measured depth of 3,540 metres, and, based on open-hole logs, the well encountered potential net natural gas pay in both the Caruacu member of the Maracangalha formation and the Gomo member of the Candeias formation, with an aggregate 127.7-metre total vertical depth of potential natural gas pay, using a 6-per-cent porosity cut-off, a 50-per-cent Vshale cut-off and a 50-per-cent water saturation cut-off. The potential net pay was spread over five sequences (four in Caruacu and one in Gomo). Alvopetro completed the well using 10 sliding sleeves targeting each of the five sequences. The sliding sleeves were used so that each interval can be selectively isolated and more effectively and selectively stimulated. Each sleeve was successfully opened, and acid was injected sequentially to establish communication with each of the targeted intervals. Three sleeves in sequence 3 of the Caruacu formation were selectively tested to verify fluids and permeability. Results from sequence 3 confirm lower permeability, and, as such, these sleeves were closed to isolate this sequence. Following this, all the remaining seven sleeves were opened, acidized and commingled for production.

During swabbing operations, the company initially recovered completion fluids but continued to see water influx into the wellbore. The majority of the produced fluid represents completion fluids, but the results indicate that at least one interval is producing formation water. The main benefit of the sliding sleeves is that the company can now close sleeves to isolate zones with water production and target those zones that are primarily producing natural gas. However, one limitation of the sliding sleeves is that the ports on each sleeve have very limited contact to the reservoir, on an unstimulated basis, as compared with perforations.

During the final 7.25-hour flow period, the well produced an average rate of 8,500 cubic metres per day (300,000 cubic feet per day) with a final stabilized rate of 4,900 cubic metres per day (175,000 cubic feet per day). The starting flowing wellhead pressure was 1,661 pounds per square inch (11,445 kilopascals) with final flowing wellhead pressure of 114 pounds per square inch (783 kilopascals). During the final flow period, the well produced 2,572 cubic metres of gas and no condensate or water.

After isolating any zones dominated by water, reservoir access and production from the natural-gas-dominated zones can be optimized with additional perforations or stimulations. The well will now be put on production to the company's adjacent production facility while Alvopetro finalizes its operational plan to isolate water zones and then optimize those zones with the highest capability.

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 onshore natural gas potential in the state of Bahia in Brazil, building off the development of the company's Cabure natural gas field and its strategic mid-stream infrastructure.

We seek Safe Harbor.