Alvopetro Energy Ltd. announced initial results from the ANP Arbitration in connection with the unitization of Caburé natural gas field (the 197(2) and 198(A1) wells) with the adjacent resource owners. Unitization Process: The National Agency of Petroleum, Natural Gas and Biofuels of Brazil ("ANP") was engaged to arbitrate the terms of the unitization of Caburé natural gas field (the 197(2) and 198(A1) wells) with the adjacent resource owners. Gas in place estimated by the ANP following the review of all technical information submitted by Alvopetro and Imetame. These resource estimates have not been reviewed by Alvopetro's external reserve evaluators and do not reflect recoverable reserves. It is anticipated that these initial working interest determinations may be adjusted in the future, on a retroactive basis, as more production history and geological information is obtained. The ANP has requested that the parties work together to finalize all remaining matters required to complete the Unitization process within the next 60 days. Most significantly these items include; the joint development plan, the determination of Unit Operator and related Agreements. If the Parties are unable to reach an agreement on these matters by March 13, 2018, the ANP will make the final determination on these matters. Operational Update: Alvopetro has received the required regulatory and environmental approvals to test 183(1) well (100% working interest). The company plans to begin rig mobilization this week, with results from the first of two zones expected later in January. These tests are being designed to demonstrate the gas resource potential on Block 183 and the adjacent Block 197 (which includes 197(1) well). The company originally drilled the 183(1) well in 2014 to a total depth of 3,550 metres and, based on open-hole logs, encountered 189 metres of potential net hydrocarbon pay over several separate intervals. Since that time, the company has significantly reduced completion and testing costs, now estimated to be $0.8 million. Now that the company is also close to finalizing a natural gas commercialization solution, the company plans to test the resource potential on this block which, if successful, can underpin a much larger scale gas development in the area.