Mr. Donald Benson reports

AVILA ENERGY CORPORATION ANNOUNCES EXTENSION OF RIGHTS OFFERING EXPIRY DATE AND RESCHEDULING OF COURT HEARING TO APPROVE AMENDED PROPOSAL

Avila Energy Corp. has extended the expiry date of its previously announced rights offering.

The expiry date of the rights offering has been extended from Jan. 14, 2026, at 4 p.m. Mountain Time to Feb. 2, 2026, at 4 p.m. Mountain Time in order to provide additional time for the completion of subscriptions.

Except for the extension of the expiry date, all other terms of the rights offering remain unchanged.

The completion of the rights offering remains subject to the satisfaction of certain conditions, including, but not limited to: (i) the receipt of all necessary regulatory approvals, including final acceptance of the Canadian Securities Exchange; and (ii) there being no material adverse change in the business, operations, assets or financial condition of the company. The company reserves the right to waive any conditions or to terminate, cancel or modify the rights offering prior to the expiry date, subject to compliance with applicable securities laws.

Further details on the rights offering are set out in the rights offering circular dated Dec. 10, 2025, and the rights offering notice dated Dec. 10, 2025, each as supplemented by a supplement to the circular and a supplement to the offering notice dated Jan. 12, 2026. The supplements have been prepared solely to disclose the extension of the expiry date. The circular, the rights offering notice and the supplements are filed under the company's profile on SEDAR+ and should be read together.

Rescheduling of court hearing

The company advises that the hearing before the Court of King's Bench to approve its amended proposal under the Bankruptcy and Insolvency Act (Canada) with FTI Consulting Canada Inc., in its capacity as proposal trustee, originally scheduled for Jan. 22, 2026, has been rescheduled. The hearing will take place on March 2, 2026.

About Avila Energy Corp.

Avila is a company that is engaged in the business of acquiring, exploring and developing crude oil, natural gas and natural gas liquids in Western Canada. The company's assets consist of the west-central Alberta assets, located 50 kilometres southwest of Edmonton, Alta., and the east-central Alberta assets, located 90 kilometres east of Red Deer, Alta. The company exists under the laws of the Province of Alberta, with its principal place of business located at Suite 201, 2750 3rd Ave. NE, Calgary, Alta., T2A 2L5, Canada. Avila's common shares trade on the Canadian Securities Exchange under the trading symbol VIK, the Frankfurt Stock Exchange under the symbol 6HGO and the OTC Markets Group under the symbol PTRVF.

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