File: Attachment 20260112 - Press release - Rights Offering Extension - V.F..pdf

NEWS RELEASE

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

CALGARY, AB January 12, 2026 Avila Energy Corporation (CSE: VIK, OTCM: PTRVF and FRA:6HG0) ("Avila" or the "Company") announces that it has extended the expiry date (the "Expiry Date" of its previously announced rights offering (the "Rights Offering").

The expiry date of the Rights Offering has been extended from January 14, 2026 at 4:00 p.m. (Mountain Time) to February 2, 2026 at 4:00 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 December 10, 2025 (the "Circular") and the rights offering notice dated December 10, 2025 (the "Rights Offering Notice"), each as supplemented by a supplement to the Circular and a supplement to the Offering Notice dated January 12, 2026 (collectively, the "Supplements"). 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+ at www.sedarplus.ca 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) (the "Amended Proposal") with FTI Consulting Canada Inc., in its capacity as proposal trustee, originally scheduled for January 22, 2026, has been rescheduled. The hearing will take place on March 2, 2026.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities within the United States, and such securities may not be offered or sold in the United States, or to or for the account or benefit of any person in the United States or any "U.S. person" (as defined in Regulation S under the U.S. Securities Act of 1933, as amended), unless registered under the U.S. Securities Act and applicable state securities laws, or pursuant to an exemption from such registration requirements.

About the Company

2750 3rd Ave NE Calgary, Alberta T2A 2L5, Canada 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, Alberta and the East Central Alberta assets located 90 kilometres east of Red Deer, Alberta. The Company exists under the laws of the Province of Alberta, with its principal place of business located at 201-2750 3rd Ave NE Calgary, Alberta T2A 2L5, Canada. Avila's Common Shares trade on the CSE under the trading symbol "VIK", the Frankfurt Stock Exchange under the symbol "6HGO" and OTC Markets Group under the symbol "PTRVF".

ON BEHALF OF THE BOARD

Donald Benson Director, President & CEO

Further information regarding the Company can be found on SEDAR at www.sedarplus.ca, or by contacting the Company directly at (403) 451-2786 or by e-mail at infor@avilaenergy.com. Neither the CSE nor its Regulation Services Provider (as that term is defined in policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution Regarding Forward-Looking Information

This news release contains statements that constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information involves known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information. All statements herein, other than statements of historical fact, are forward-looking information.

Forward-looking information in this news release includes, but is not limited to, statements regarding: the completion of the Rights Offering and the timing thereof; receipt of all necessary regulatory approvals, including final acceptance of the CSE for the Rights Offering; the intended use of proceeds; court approval of the Amended Proposal and the expected timing of seeking such approval; completion of the Shares-for-Debt Transaction and CSE approval thereof; the issuance of Common Shares to affected creditors and the deemed price and dilutive effect of the Shares-for-Debt Transaction; and Avila's ability to continue as a going concern and execute its current business objectives.

Forward-looking information is based on a number of assumptions and estimates, including, without limitation, assumptions regarding the general stability of the economic and political environment in which Avila operates; the Company's ability to obtain all required approvals and consents, including court approval of the Amended Proposal and CSE approval of the Shares- for-Debt Transaction; investor interest and participation in the Rights Offering; Avila's ability to access capital on acceptable terms; the Company's future growth potential and operating performance; the final reconciliation of affected creditor claims; and that general business and economic conditions will not change materially adversely. Although the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties, including, but not limited to: the potential that the Rights Offering will not be

2750 3rd Ave NE Calgary, Alberta T2A 2L5, Canada completed on the terms described herein or at all; the risk that the Amended Proposal may not receive court approval or may not be approved on the terms described herein; the risk that the Shares-for-Debt Transaction may not be completed or may not receive CSE approval; the Company's inability to obtain other required regulatory approvals; fluctuations in general market conditions and the trading price of the Common Shares; dilution resulting from the Rights Offering, the Shares-for-Debt Transaction, or other future financings; the Company's ability to continue as a going concern; the availability of financing; the final amount of affected creditor claims and corresponding number of Common Shares to be issued; the Company's ongoing financial difficulties and insolvency proceedings; operating and financial risks inherent in the oil and gas industry; the condition and operability of the Company's natural gas processing equipment; political and regulatory risks; changes in laws or regulations; and other factors beyond the control of Avila. Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information identifying risks and uncertainties that could affect the Corporation's operations and financial results can be found in Avila's filings with Canadian securities regulators, available under the Corporation's profile on SEDAR+ at www.sedarplus.ca. The forward-looking information contained in this news release is made as of the date hereof, and Avila disclaims any obligation to update or revise such information, whether as a result of new information, future events, or otherwise, except as required by applicable law.

2750 3rd Ave NE Calgary, Alberta T2A 2L5, Canada