Mr. Leonard Van Betuw reports

AVILA ENERGY CORPORATION IS PLEASED TO ANNOUNCE AN INCREASE IN ITS 3RD PARTY PROCESSING VOLUMES AND AN OPERATIONAL UPDATE

Avila Energy Corp. expects an increase in its third party processing volumes. It has provided an operational update.

On Nov. 14, 2023, Avila Energy reported that the company, as part of its long-term plans, it would initially be focused until the end of the first quarter of 2024 on one of three goals, the establishment of a resilient mid-stream business from which it would continue to grow. The foundation for this resilient business would become an integral part of a company that can produce, upstream production of low emissions oil, natural gas and liquids in combination with mid-stream processing, power generation, carbon capture and carbon dioxide sequestration. These are the initial two revenue streams of the three revenue streams that Avila has identified as being the core components of its vertically integrated energy business.

Mid-stream third party processing services

Avila recently received notice from its third party customer that Avila should expect additional volumes of up to 4,000 million cubic feet per day before the end of March of 2024. Furthermore, it is expected that by October of 2024, upon the completion of the tie-in of a proposed pipeline to the company's gathering system, the customer is prepared to continue to increase its delivery of natural gas to over 10,000 mcf/d.

This increase in third party revenues, in combination with Avila's production growing to over 1,000 barrels of oil equivalent per day by early third quarter of 2024, solidifies the company's initial two segments of its three revenues streams. These revenue streams are to be established as part of Avila's focus on the development of the corporation's ability to become a carbon neutral vertically integrated energy company, capable of delivering economically sustainable carbon neutral energy products directly to industrial customers and retail consumers.

Upon the stabilization of its mid-stream business, Avila, as previously disclosed, sees this as being an important precursor to the sanctioning and construction of phase I of its CCS plan, a 10 megawatt natural-gas-fired low-emissions power generation facility. This is designed to be tied into a carbon capture and CO2 sequestration facility to be on-site also by Avila Energy. The company's two facilities in west-central Alberta are currently capable of producing 15,000 mcf per day and are expected to be operating at capacity by the end of 2024 prior to construction being completed on the 10 megawatts of power generation.

The agreed rates are expected to increase annualized cash flow by an additional $1.5-million in 2024.

Upstream operations

Avila's upstream operations are being remediated slowly while it focuses on the mid-stream business and is focused on the refinement of its production goals to match up with the financing under way to exceed its first milestone of 650 BOE/d by the second quarter of 2024. This will position Avila to consistently generate cash flow that exceeds the total cost of the company's operational (Opex) and general and administrative (G&A) obligations. Avila continues to see this to be its break-even point for its upstream operations. By the end of the second quarter 2024, upon the closing of the private placement, the break-even point is expected to be exceeded with the completion of the mid-stream project with daily production of 650 BOE/d continuing to grow to 1,000 BOE/d (80 per cent natural gas and liquids and 20 per cent heavy crude oil and condensates). Currently the company assumes it will realize a price of $1.80 to $2.50/mcf for the remainder of 2024 for natural gas and a blended price of $75.00/bbl for heavy crude oil, liquids and condensates with a target for operating expenses to be less than $10/BOE including transportation.

Avila integrated energy solution

Avila is also pleased to report that it continues to make progress toward the full resolution of all outstanding matters, regarding Avila's relationship with MTT, prior to the delivery and installation of Avila's first integrated energy solution (IES) in North America. This is planned for the second quarter of 2024, an integrated off-grid energy solution based on the patented EnerTwin, a microturbine CHP.

Avila Energy continues to advance its plans in North America for the ramp-up of its exclusive licensing, and the planned co-ordinated manufacturing of equipment in the Netherlands to support sales in North American in 2024, prior to the completion of licensed technical transfer for the manufacturing of the EnerTwin in Canada, that positions Avila to commence manufacturing, sales and the servicing of Avila's integrated energy solution, in North America, recently branded by the company as Avila IES.

About Avila Energy Corp.

The company is an emerging Canadian Securities Exchange 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 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.

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