New Stratus Energy Announces Significant Farm-in Memorandum of Understanding with Vultur Oil

Core Viewpoint - New Stratus Energy Inc. has signed a significant farm-in Memorandum of Understanding with Vultur Oil to develop oil and gas concession contracts in Bahia, Brazil, enhancing its operational footprint in a region with rich hydrocarbon potential [1][11]. Concession Contracts - The agreement involves two concession contracts for oil and gas exploration, development, and production, specifically the 108 Contract and the 107 Contract, both held 100% by Vultur [2]. - These contracts are located in the Reconcavo Basin, adjacent to Petrobras' Araças field, which has a history of significant oil production [3]. Historical Operations - Vultur has successfully re-entered and stimulated the Candeias Formation in the GREN well, achieving promising initial results with 1P volumes reaching up to 100,000 barrels of light oil [4]. - Previous drilling in the area has confirmed the presence of hydrocarbons, indicating significant potential for increased production through advanced drilling techniques [5]. Reserves - At closing, New Stratus' 15% working interest in the blocks is estimated to have gross proved reserves of 1.42 million barrels of oil equivalent (BOE) with a before-tax net present value (NPV10) of US$15.2 million [8]. - Upon completion of the Second Stage Investment, the reserves attributable to a 32.5% working interest are projected to be 3.07 million BOE with an NPV10 of US$32.83 million [14]. MOU Terms - The MOU outlines the intention to negotiate a definitive farm-out agreement and a joint operating agreement for the development of the concession contracts [11]. - The agreement includes a phased approval process from the Brazilian National Petroleum Agency (ANP) for the transfer of working interests [12]. Financial Aspects - The transaction will not involve debt financing, and New Stratus will be responsible for funding a total of US$10 million for initial development activities [15][16].