Mr. Richard Gonzalez reports

PETRO-VICTORY TO CONTRIBUTE SELECTED BRAZILIAN ASSETS IN EXCHANGE FOR 10.25% OWNERSHIP STAKE IN AZEVEDO & TRAVASSOS ENERGIA

Petro-Victory Energy Corp. has entered into a definitive association agreement on March 26, 2026, with Azevedo & Travassos Energia SA, a Brazilian publicly listed oil and gas company, pursuant to which Petro-Victory will contribute certain Brazilian assets in the Potiguar basin to a newly formed subsidiary that will be incorporated into ATE.

Transaction highlights:

• Consideration: 10.25-per-cent ownership stake in ATE, a publicly traded Brazilian energy company, and ATE assumes certain liabilities and obligations (total implied value of approximately $5.6-million (U.S.), based on current estimates);
• PVE assets contributed: Andorinha field concession, six exploration concessions and 50-per-cent Brava option (defined below);
• Structure: completed in stages -- shares are issued at the initial closing, with asset transfers completed as regulatory approvals are received;
• Approval: standard regulatory, corporate and stock exchange approvals in Brazil and Canada;
• Expected timing: targeted for second quarter 2026, subject to approvals.

Transaction consideration

In consideration for the contribution of the assets (defined below), Petro-Victory will receive newly issued common shares of ATE, representing 10.25 per cent of ATE's basic issued and outstanding share capital following issuance at the initial closing. The ATE shares will be free of any encumbrance and freely tradable at initial closing.

Assets included in the transaction

The transaction includes the contribution of Petro-Victory's interests in:

• The Andorinha field concession;
• A portfolio of six Potiguar basin exploration blocks, including POT-T-566, POT-T-304, POT-T-327, POT-T-352, POT-T-436 and POT-T-474; and
• Petro-Victory's option to acquire a 50-per-cent interest in certain oil and gas assets that are the subject of a separate acquisition process currently being pursued with Brava Energia SA and previously disclosed on Feb. 10, 2025.

Following the completion of the transaction, Petro-Victory will continue to own and operate a diversified portfolio of assets and strategic partnerships, including:

• Sao Joao field (Eneva partnership): Petro-Victory retains its 100-per-cent interest in the Sao Joao field, together with the previously announced partnership with Eneva.
• Capixaba Energia (BlueOak partnership): Petro-Victory remains a partner in Capixaba Energia with BlueOak Investments.
• Production concessions: Petro-Victory continues to hold oil production concessions, including the 100-per-cent-owned Alto Alegre field and 100-per-cent-owned Trapia field.
• Exploration portfolio: Petro-Victory continues to hold 100-per-cent ownership in 28 exploration blocks across the Potiguar basin.

Transaction structure, timing and approvals

The transaction is structured to be completed in phases. At the initial closing, Petro-Victory will contribute the identified assets to a newly formed subsidiary, which will be incorporated into ATE, and Petro-Victory will receive ATE shares representing 10.25 per cent of ATE's issued and outstanding share capital following issuance.

The legal transfer of the underlying concession rights and obligations of the assets is expected to occur on a phased basis, subject to the receipt of applicable corporate and regulatory approvals, including approvals from Brazil's National Agency of Petroleum, Natural Gas and Biofuels. Completion of the transaction remains subject to the satisfaction of customary closing conditions, including the approval of the TSX Venture Exchange (if required), and there can be no assurance that all required approvals will be obtained or that the transaction will be completed on the anticipated timeline.

Valuation and accounting considerations

Implied consideration value

The transaction is a non-cash, equity-for-asset reorganization, representing 10.25 per cent of ATE's basic issued and outstanding share capital following issuance at the initial closing. Based on the volume-weighted average price of ATE's shares (AZTE3) on the B3 as of March 26, 2026, and using the applicable Brazilian real to U.S. dollar exchange rate published by the Central Bank of Brazil on the same date, the implied fair market value of the 10.25-per-cent equity interest in ATE to be received by Petro-Victory is approximately $2.0-million (U.S.). The actual value of the ATE shares at closing will vary based on market prices, foreign exchange rates and other factors at the time of issuance.

When combined with the expected settlement or assumption of certain liabilities and contractual obligations transferred as part of the transaction, the company estimates that the implied consideration anchored to date is approximately $5.6-million (U.S.). These estimates are provided for informational purposes only and do not represent a determination of fair value for accounting purposes.

Expected accounting treatment and balance sheet impacts

The company expects to record the ATE shares received at fair value at the time of issuance in accordance with applicable accounting standards and based on observable market data for ATE shares at closing. The company also expects the settlement or assumption of certain contingent liabilities related to the Andorinha partnership with the ATE concession to reduce Petro-Victory's liabilities by the corresponding amount and the transfer of the exploration portfolio to reduce the company's contractual obligations associated with the required minimum work commitments attached to the exploration blocks.

Based on management's preliminary internal estimates and the company's current carrying values, the book value of the assets included in the transaction is approximately $5.6-million (U.S.), and the company expects the transaction to extinguish approximately $2.2-million of accrued contingent liabilities associated with the Andorinha concession partnership and to reduce contractual obligations related to the six exploration blocks by approximately $1.4-million (U.S.).

About Petro-Victory Energy Corp.

Petro-Victory 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 31 concession contracts with 210,583 acres, net to Petro-Victory, plus an additional four concessions and 11,413 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 Venture Exchange under the ticker symbol VRY.

We seek Safe Harbor.