Mr. Corey Ruttan reports

ALVOPETRO ANNOUNCES FILING OF MATERIAL CHANGE REPORT AND RECEIPT OF DISPUTE NOTIFICATION FROM THIRD-PARTY PARTNER

Alvopetro Energy Ltd. has filed a material change report on SEDAR+ which details the anticipated impact to Alvopetro following the decision of the independent expert in the redetermination process which increased Alvopetro's working interest in the unitized area which includes Alvopetro's Cabure natural gas field. In addition, Alvopetro announces that it has received a notice of dispute from its third party partner with respect to the findings of the expert.

Material change report

On April 5, 2024, Alvopetro announced the results of the unit redetermination process wherein the expert found in favour of Alvopetro's proposal, increasing Alvopetro's working interest in the unit to 56.2 per cent. Alvopetro has filed a material change report on SEDAR+ which summarizes the anticipated impact to Alvopetro of the increased working interest. The material change report highlights the following:

• Alvopetro's working interest in the unit increases from 46.2 per cent to 56.2 per cent, with such increase expected to become effective on June 1, 2024.
• As of the effective date, Alvopetro's entitlement to natural gas production from the unit will increase to 13.9 MMcfpd (million cubic feet per day) (before additional natural gas liquids volumes), compared with average 2023 natural gas production from the unit of 11.7 MMcfpd per day. Any increase to natural gas sales will be subject to demand.
• On the effective date, Alvopetro has the right to assume operatorship of the unit.
• Alvopetro's total company proved plus probable reserves (2P) (effective Dec. 31, 2023) increases to 9.6 MMboe (million barrels of oil equivalent) from 8.7 MMboe, a 10.8-per-cent increase, based on an independent reserves assessment and evaluation as of Dec. 31, 2023 (the pro forma Dec. 31, 2023, reserves) prepared by GLJ Ltd., incorporating the redetermined working interest of 56.2 per cent, compared with GLJ's original reserves assessment and evaluation as announced by Alvopetro on Feb. 26, 2024, which was based on Alvopetro's initial working interest in the unit of 49.1 per cent. The GLJ reserves and resources report, and the GLJ pro forma report have been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the COGE Handbook) that are consistent with the standards of National Instrument 51-101. GLJ is a qualified reserves evaluator as defined in NI 51-101.
• Alvopetro's before-tax net present value of 2P reserves discounted at 10 per cent increases 10.6 per cent, from $309.7-million to $342.4-million in the GLJ pro forma report.

Dispute notification

On April 11, 2024, Alvopetro received a notice of dispute from the third party partner with respect to the redetermination decision of the expert. Pursuant to the provisions of the UOA (unit operating agreement) and all related agreements, where an expert is engaged to evaluate a redetermination, the decision of the expert is binding and Alvopetro strongly disagrees with the third party partner's position.

About Alvopetro Energy Ltd.

The company'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 the company's Cabure natural gas field and its strategic mid-stream infrastructure.

All amounts contained in this news release are in United States dollars, unless otherwise stated.

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