Alvopetro Energy Ltd.
TSX VENTURE : ALV

Alvopetro Energy Ltd.

April 10, 2015 18:12 ET

Alvopetro Announces Relinquishment of Blocks 131, 132, 144, and 157

CALGARY, ALBERTA--(Marketwired - April 10, 2015) - Alvopetro Energy Ltd. (TSX VENTURE:ALV) announces that we have informed Brazil's National Agency of Petroleum, Natural Gas and Biofuels ("ANP") of our intention to relinquish Blocks 131, 132, 144, and 157 (collectively, the "Blocks"), in accordance with the associated concession contracts for these Blocks.

Alvopetro acquired the Blocks in Brazil's 9th Bid Round and has since completed 199 km2 of 3D seismic and 355 km of 2D seismic on the Blocks. Prior to the relinquishment, the Blocks represent 20,830 acres of Alvopetro's 148,500 acreage asset base. Our extensive seismic and geotechnical work indicated limited prospectivity on these Blocks and we have decided to relinquish the Blocks to the ANP and terminate the associated concession contracts. This relieves us of our commitment to drill four exploration wells on these Blocks. Upon relinquishment, Alvopetro will pay to the ANP the aggregate amount of approximately US$3.96 million, representing the performance guarantee fees required to be paid to the ANP in connection with the relinquishment of the Blocks, based on the current exchange rate.

We have continued our focus on the interpretation of our extensive 3D seismic database covering all of our exploration blocks in Brazil. As a result of this work, we have increased our initial 9-well inventory to an 18-well inventory of conventional exploration opportunities, none of which are located on the Blocks being relinquished. Of our 18-well inventory of exploration prospects, three of the prospects are analogous to our recent significant natural gas discovery at our 197(2) well.

We retain a large asset base in Brazil following this relinquishment, with 127,670 acres (gross) comprised of 12 exploration blocks and three mature fields. The relinquishment of these less prospective Blocks and elimination of our four well commitment will allow us to focus capital on our higher impact and more prospective locations. In addition, of our remaining 12 exploration blocks, seven of these blocks were acquired in the 11th and 12th Brazil Bid Rounds, providing us with a timeframe for completion of commitments on these blocks extending to August 2016 and May 2017, respectively.

Corporate Presentation

Alvopetro's updated corporate presentation is available on our website at: http://www.alvopetro.com/corporate-presentation

Alvopetro Energy Ltd.'s vision is to be the premier independent exploration and production company in Brazil, maximizing shareholder value by being the lowest cost operator and applying innovation to underexploited opportunities. Alvopetro aims to implement a large-scale, repeatable, low-risk, multi-well development program, utilizing advanced technology and completion techniques. Alvopetro's strong financial position, along with our experienced team of professionals, local operating capabilities and highly prospective land base, will enable us to efficiently develop our resource play opportunities.

Forward-Looking Statements and Cautionary Language. This news release contains "forward-looking information" within the meaning of applicable securities laws. The use of any of the words "will", "intend" and other similar words or expressions are intended to identify forward-looking information. More particularly and without limitation, this news release contains forward-looking information concerning potential concession contract commitment timings, regulatory approvals, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro's activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including expectations and assumptions concerning testing results, the timing of regulatory licenses and approvals, availability of capital, the success of future drilling and development activities, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Alvopetro are included in Alvopetro's annual information form which may be accessed through the SEDAR website at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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