Petro-Victory to Contribute Selected Brazilian Assets in Exchange for 10.25% Ownership Stake in Azevedo & Travassos Energia

Executive Summary

• Petro‑Victory Energy Corp. entered into a definitive association agreement to contribute selected Brazilian oil and gas assets to Azevedo & Travassos Energia (ATE) in exchange for a 10.25 % ownership stake in ATE.
• The consideration, including assumed liabilities, is estimated at approximately US$5.6 million; the equity component alone is valued at roughly US$2.0 million based on ATE’s market price as of March 26 2026.
• Transaction is structured in phases with initial share issuance at closing and asset transfers to follow pending regulatory approvals, targeted for completion in Q2 2026.

Key Details

• Consideration: 10.25 % of ATE’s basic issued & outstanding share capital (free‑floating shares) plus assumption of certain liabilities (total implied value ≈ US$5.6 M).
• Assets Contributed by Petro‑Victory:
• Andorinha field concession.
• Six exploration concessions in the Potiguar Basin (POT‑T‑566, POT‑T‑304, POT‑T‑327, POT‑T‑352, POT‑T‑436, POT‑T‑474).
• 50 % option on assets under a separate acquisition process with Brava Energia S.A. (“Brava Option”).
• Transaction Structure:
• Phase 1 – Initial closing: Petro‑Victory receives newly issued ATE shares representing the 10.25 % stake.
• Subsequent phases – Transfer of contributed assets to a newly formed subsidiary that will be merged into ATE, subject to regulatory approvals (ANP, TSX Venture Exchange, B3).
• Timing: Targeted for Q2 2026, contingent on receipt of all required corporate and regulatory consents.
• Valuation Estimates:
• Equity portion (10.25 % of ATE) ≈ US$2.0 M (based on VWAP of ATE shares on March 26 2026).
• Combined with assumed liabilities, total implied consideration ≈ US$5.6 M.
• Accounting Impact (preliminary):
• Book value of contributed assets ≈ US$5.6 M.
• Expected reduction of accrued contingent liabilities: ~US$2.2 M (Andorinha concession).
• Expected reduction of contractual obligations for the six exploration blocks: ~US$1.4 M.
• Post‑Transaction Portfolio Retention: Petro‑Victory will continue to hold:
• 100 % interest in São João field (Eneva partnership).
• Partnership in Capixaba Energia with BlueOak Investments.
• Full ownership of Alto Alegre and Trapiá production concessions.
• 100 % ownership of 28 additional exploration blocks in the Potiguar Basin.

Notable Quotes

• “This strategic contribution aligns with Petro‑Victory’s objective to focus on high‑impact, low‑risk assets while unlocking value through a partnership with ATE,” – Richard F. Gonzalez, CEO, Petro‑Victory Energy Corp.

The above summary excludes boilerplate corporate disclosures and forward‑looking statement cautions.