Mr. Corey Ruttan reports

ALVOPETRO ANNOUNCES AUGUST SALES VOLUMES AND AN OPERATIONAL UPDATE

Alvopetro Energy Ltd. has had August sales volumes of 3,124 barrels of oil equivalent per day (based on field estimates). In Brazil, August sales averaged 2,989 boe/d, including natural gas sales of 16.8 million cubic feet per day and associated natural gas liquids sales from condensate of 187 barrels of oil per day. In Canada, oil sales averaged 135 bopd.

Operational update

The company completed the 183-D1 well in three intervals. The well went through an initial eight-day cleanup period, flowing an average rate of 29,000 cubic metres per day (1.0 MMcfpd, 171 boe/d) at a 2,282,000-pascal (331 pounds per square inch) flowing wellhead pressure, recovering 1,674 barrels of completion fluid and 143 barrels of natural gas liquids. After this initial cleanup period, the well was aligned to the company's production system, where the company flowed the well to testing equipment for 11 days at a constant 44-64ths-of-an-inch choke at an average rate of 31.7 thousand cubic metres per day (1.12 MMcfpd, 186 boe/d) with a 3,585,000-pascal (520 psi) flowing wellhead pressure. During this period, the company also recovered a total of 247 barrels of completion fluid and 456 barrels of natural gas liquids. Average natural gas liquids (condensate) production during the flow period was 41 boe/d. To date, it has only recovered 16 per cent of completion fluid with 10,258 barrels of 12,214 barrels left to recover. The company will continue to observe well behaviour as it recovers additional completion fluid.

The 183-H2 well was drilled to a total measured depth of 3,176.5 metres. Based on open-hole logs, the well encountered potential net natural gas pay in the Caruacu member of the Maracangalha formation, totalling 44.4-metre total vertical depth of potential natural gas pay, with average porosity of 9.6 per cent and average water saturation of 32.8 per cent, using a 6-per-cent porosity cut-off, 50-per-cent Vshale cut-off and 50-per-cent water saturation cut-off. The company has completed the drilling program and is in the process of moving the drilling rig and then will begin completion operations for the identified zones. The company expects to start completion operations in October.

Its next well in the program is the 183-G2 well, which will be the first Caruacu development well drilled from its newly constructed 183-G well pad. The company expects to initiate drilling later in September.

Alvopetro is deploying a balanced capital allocation model where it seeks to reinvest roughly half its cash flows into organic growth opportunities and return the other half to stakeholders. Alvopetro's organic growth strategy is to focus on the best combinations of geologic prospectivity and fiscal regime. Alvopetro is balancing capital investment opportunities in Canada and Brazil, where it is building off the strength of its Cabure and Murucututu natural gas fields and the related strategic mid-stream infrastructure.

We seek Safe Harbor.