Mr. Danny Wray reports

PETRO-VICTORY ENERGY CORP. AND AZEVEDO & TRAVASSOS ENERGIA S.A. SIGN BINDING MEMORANDUM OF UNDERSTANDING

Petro-Victory Energy Corp. and Azevedo & Travassos Energia SA (ATE) signed a binding memorandum of understanding on July 2, 2025, pursuant to which Petro-Victory and ATE intend to complete an arm's-length business combination by the acquisition by ATE of all of the issued and outstanding common shares of the company. The transaction is intended to combine the businesses and assets of ATE and the company and result in the company becoming a wholly owned subsidiary of ATE. Under the transaction, the current shareholders of the company will become shareholders of ATE. The combination of the company and ATE is expected to increase shareholder value through the development of ATE's growth strategy with the supplementation of the company's diversified portfolio of production and exploration assets.

Transaction summary

Pursuant to the transaction, ATE will complete a capital increase by way of a private placement of 205,479,453 units of ATE at an issue price of 0.73 Brazilian real (18 cents) per unit, for aggregate gross proceeds of 150,000,000.69 Brazilian reais (or $27,683,955.13 (U.S.) and $37,533,870.17 based on today's conversion rate).

Following the completion of the capital increase and all other conditions precedent, certain shareholders of the company will convert certain claims held by them against the company and its affiliates into new common shares in the capital of the company (PV shares).

Thereafter, ATE will purchase 100 per cent of the issued and outstanding PV shares and will issue, in favour of the company's shareholders, 266 million ATE shares, all of which are registered and without par value based on a price per ATE share equal to 0.73 Brazilian real (18 cents). The share consideration shall be provided proportionately to the holders of PV shares in their respective interests.

As part of the transaction, the company's shareholders of record at closing will be entitled to a gross overriding royalty (GORR) in the percentage of 10 per cent on the gross revenue from all new production arising from fields that already exist in the concessions owned by the company prior to the MOU or that will be created after the date of the MOU in the concessions owned by the company (PV fields), except with respect to the production of the reservoirs of the Sao Joao field, which are the subject of the partnership between Petro-Victory Energy and Eneva SA. The GORR will apply, for each PV field, for a period of 15 years from the start of its commercial production or, for existing fields that are already in production, from the closing date.

The company's shareholders of record at closing will also be entitled to receive certain contingent payments in connection with certain existing partnerships between the company and its affiliates with third parties.

In addition, ATE will assume all outstanding debt of the company, with the estimated enterprise value of the transaction being approximately $39.5-million (U.S.) ($53.6-million), including net debt and before considering any valuation for contingent payments. The transaction, transaction value and price of the share consideration will be subject the policies, rules and approvals of the TSX Venture Exchange or such other recognized stock exchange upon which the share consideration is listed for trading. The share consideration represents a premium of approximately $2.15 to the company's shareholders based on the closing price of the company as of the market close on July 2, 2025, and based on the target price of 0.73 Brazilian real (18 cents) per share for the share consideration.

The transaction is subject to a number of conditions precedent, including the completion of the capital increase on or before July 12, 2025, subject to a 30-day extension in the sole discretion of ATE. Additionally, the transaction is subject to a number of terms and conditions following the completion of the capital increase within 120 days of such completion, including, but not limited to, the parties entering into a definitive agreement with respect to the transaction (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the obtaining by both the company and ATE of all corporate and governmental approvals applicable to their respective jurisdictions, the obtaining by both the company and ATE of any consents from third parties of financial institutions, as applicable, and the completion of an audit by both the company and ATE of any and all information relevant to the performance of financial, legal, operational, environmental, accounting and regulatory audits.

Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Trading in the securities of the company and ATE should be considered highly speculative.

There will be no finders' fees associated with the transaction.

As of the date of this news release, the conversion rate between the Brazilian real and the Canadian dollar is 1:0.25 and the conversion rate between the Canadian dollar and the U.S. dollar is 1:0.74. As such, the conversion rate between the Brazilian real and the U.S. dollar is 1:0.18.

Due diligence

In order to advance the transaction to the point where a definitive agreement can be negotiated, each of the parties will conduct customary due diligence on the other party, and, following completion of satisfactory due diligence reviews, the parties expect to negotiate and execute a definitive agreement on or before the date that is 120 days from the date of the completion of the capital increase.

Shareholder and TSX-V approval

The transaction, if completed as contemplated, will be a reviewable disposition, as defined in TSX-V Policy 5.3, by the company, and as such will be subject to the requirements of TSX-V Policy 5.3. If the transaction is completed, the company will be making an application to voluntarily delist from the TSX-V under TSX-V Policy 2.9 as the acquisition by ATE of all of the issued and outstanding shares of the company will cause the company to no longer meet the listing requirements of the TSX-V. The completion of the transaction and the subsequent delisting are subject to the approval of both the shareholders of the company and the TSX-V, in accordance with TSX-V requirements. The company will seek the approvals of the TSX-V and the company's shareholders once the capital increase is complete and the company and ATE enter into a definitive agreement.

About Petro-Victory Energy Corp.

Petro-Victory Energy is an oil and gas company engaged in the acquisition, development and production of crude oil and natural gas in Brazil. The total portfolio under management as of the date of this filing includes 49 concession contracts with 276,755 acres net to Petro-Victory plus an additional six concessions and 19,074 acres owned jointly with BlueOak in Capixaba Energia. Through disciplined investments in high-impact, low-risk assets, Petro-Victory is focused on delivering sustainable shareholder value. The company's common shares trade on the TSX-V under the ticker symbol VRY.

About Azevedo & Travassos Energia SA

ATE is a publicly traded Brazilian energy company focused on the acquisition, development and production of onshore oil and gas assets in Brazil. Headquartered in Sao Paulo and founded in 2023, ATE holds concession contracts and strategic partnerships in the Potiguar basin, with operations concentrated around Mossoro/RN. Through its wholly owned subsidiaries, Azevedo & Travassos Petroleo (ATP) and Phoenix Oleo e Gas, ATE is committed to sustainable growth and long-term value creation in the Brazilian energy sector.

We seek Safe Harbor.