New Stratus Energy Announces Execution of Definitive Farm-Out Agreement with Vultur Oil

Core Viewpoint - New Stratus Energy Inc. has signed a definitive farm-out agreement with Vultur Oil to develop oil and gas concession contracts in Bahia, Brazil, which is expected to enhance its operational footprint and reserves in the region [1][4]. 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][3]. Location and Production Background - The concession contracts are situated in the Reconcavo Basin, adjacent to Petrobras's Araças field, which has produced over 5.9 million barrels of oil equivalent since 2012 [3]. FOA Terms - Under the FOA, New Stratus will acquire up to a 32.5% working interest in the concession contracts, with an initial transfer of 15% upon closing, and the remaining 17.5% after the Second Stage Investment [4][5]. Investment and Reserves - New Stratus is set to invest a total of US$10 million, with US$5 million allocated for the First Stage Investment and another US$5 million for the Second Stage Investment, aimed at developing new wells [6][7]. - At closing, the estimated gross proved reserves attributable to New Stratus's 15% working interest are 1.42 million barrels of oil equivalent, with a before-tax net present value (NPV10) of US$15.2 million [6][8]. Historical Operations - Vultur has previously re-entered and stimulated the Candeias formation in the GREN well, achieving production of over 100,000 barrels of oil, indicating the potential for commercial viability [9]. - The GOP exploration well confirmed the presence of hydrocarbons, demonstrating the area's potential for future production [10]. Future Projections - The reserves estimates for New Stratus's anticipated 32.5% working interest, assuming completion of the Second Stage Investment, are projected to be 3.07 million barrels of oil equivalent with an NPV10 of US$32.83 million [14].