Mr. Leonard Van Betuw reports

AVILA ENERGY CORPORATION IS PLEASED TO ANNOUNCE A PRIVATE PLACEMENT OFFERING OF UP TO $3,000,000 AND CORPORATE UPDATES

Avila Energy Corp. has arranged a private placement offering of up to $3-million and provided corporate updates.

Private placement offering

The company intends to complete a non-brokered private placement consisting of the issuance of up to 60 million units at a price of five cents per unit for gross proceeds of up to $3-million.

Each unit comprises one common share in the share capital of the company and one-half common share purchase warrant. Each full warrant entitles its holder to purchase one additional common share at a price of 12 cents for a period of 24 months following the closing. The company expects that such closing will occur on or before Sept. 28, 2023. The company may proceed to close in multiple tranches.

The corporation may pay finders' fees on a portion of the private placement, subject to compliance with the policies of the Canadian Securities Exchange and applicable securities legislation.

Certain insiders of the corporation may acquire units in the private placement. Any participation by insiders in the private placement would constitute a related party transaction as defined under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. However, the corporation expects such participation would be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the units subscribed for by the insiders, nor the consideration for the units paid by such insiders, would exceed 25 per cent of the corporation's market capitalization.

The proceeds of the private placement will be used for general working capital purposes. All securities issued pursuant to the private placement will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities law.

Marketing services agreement

The company has entered into an arm's-length marketing services agreement with Outside the Box Capital Inc., effective Sept. 18, 2023, complementary to its existing marketing efforts, and in advance of the launching of presales for the sale and installation of the company's vertically integrated energy business. As consideration for the services to be provided, the issuer has agreed to pay a fee of $60,000 plus taxes, for an initial term of six months. The services will include, but are not limited to, initial planning and strategy call, advice, and other strategic matters of the campaign, assisting in social media and other community-driving mediums, distributing company-approved messaging, news releases and other approved company materials across social channels, spreading company insights and announcements to new communities, and featuring the company in different influencer-based videos, occasional Q&A (question-and-answer) periods or highlight videos surrounding recent company news. Consideration offered to Outside the Box Capital does not include any securities of the company.

Amendment of warrant terms

The company is also pleased to announce that it intends to extend by one year 7,472,130 outstanding warrants with exercise prices of 35 cents, 15 cents, 20 cents and 75 cents, and with expiration dates ranging from Sept. 9, 2023, to Dec. 9, 2024. The company obtained a waiver from the Canadian Securities Exchange policies in order to extend all of the warrants that expired in September of 2023.

Amendment of convertible debenture terms

The company also intends to amend the terms of its unsecured convertible debentures that closed on July 5, 2022, by way of issuance of convertible debenture units of a principal amount of $5,000,230, bearing interest at 4 per cent per annum, which is convertible and unsecured and is due on April 1, 2025. Each debenture unit includes the right of full conversion of the entire principal amount and accrued interest into common shares at a price of 50 cents, as well as one additional common share purchase warrant entitling the holder to purchase one additional common share at a price of 75 cents for a period of two years following the conversion.

The company contemplated extending the maturity date of the convertible debentures by an additional year, as well as repricing the underlying common shares and warrants to a price of 25 cents per common share and warrant upon conversion. Such amendments will benefit the existing debentureholders who are prepared to commit an additional 20 per cent on the face value of the current private placement above of the company on a tag-along basis.

About Outside the Box Capital Inc.

Outside the Box Capital offers small and medium-sized public companies with the help and management of upkeeping their digital front and keeping shareholders informed and excited through digital means.

About Avila Energy Corp.

The company is an emerging CSE-listed corporation trading under the symbol VIK, and, in combination with an expanding portfolio of 100-per-cent-owned-and-operated oil and natural gas production, pipelines and facilities, is a licensed producer, explorer and developer of energy in Canada. The company's long-term vision is to achieve, through the implementation of a closed system of carbon capture and sequestration, an established path toward the material reduction of Tier 1, Tier 2 and Tier 3 emissions, and the company continues to work toward becoming a vertically integrated carbon-neutral energy producer. The company's goals are to be achieved by focusing on the application of proven geological, geophysical, engineering and production techniques in combination with the delivery of direct-to-consumer energy sales to both residential and commercial consumers.

We seek Safe Harbor.