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New Stratus Energy Completes Acquisition of Shares of Repsol Ecuador S.A. from Affiliates of Repsol S.A.

New Stratus Energy Completes Acquisition of Shares of Repsol Ecuador S.A. from Affiliates of Repsol S.A.
Written by publishing team

Calgary, Alberta – (Newsfile Corp. – January 14, 2022) – New Stratus Energy Inc. is pleased. (TSXV: NSE) (“New Stratus” or “Corporation”) announced that in addition to its news release dated October 20, 2020 (link), it closed the previously disclosed deal with Repsol SA’s affiliates (“Vendors”) to transfer Shares (“Shares”) from Repsol Ecuador SA to New Stratus (“Deal”) on terms equal to those previously disclosed. The Company now has an indirect operating interest of 35% in the service contracts (“Service Contracts”) for Buildings 16 and 67 in Ecuador (the “Squares”) and Repsol Ecuador SA, and is now a wholly owned subsidiary of New Stratus, still a block operator. .

Deal Highlights:

  • Total production as of January 5, 2022 in the blocks was 14,306 barrels of oil per day (bpd) (5,007 barrels per day).

  • Total proven plus potential reserves 4.506 million barrels of oil (1.577 million barrels of net oil).[1] According to COGE (Canadian Oil and Gas Assessment), reserves can only be held until the end of the current service contract that expires in December 2022 rather than the remaining economic life of the blocks.

  • There is still significant production potential in the blocks and the corporation previously announced plans to spend approximately $200 million in 2022 and 2023 to drill approximately 30 development wells, after completing negotiations with the Ecuadorean government to extend rights to blocks through production. Share contract. When the rights are extended to the blocks, a new reserve report will be issued that reflects the reserves until the end of the newly negotiated contract.

  • In conjunction with the closing of the transaction, New Stratus is pleased to announce that Ramiro Paez, Director of Repsol’s Ecuadorean Business Unit has agreed to join New Stratus in the same position. Mr. Baez is a mechanical engineer with more than 40 years of international experience in the oil and gas industry in Indonesia, Spain, Libya, Venezuela and most recently with Repsol in Ecuador. Mr. Baez will be a key figure in the ongoing development of New Stratus in Ecuador.

[1] See advice on reserves below.

Block 16 and 67

The company now owns 35% of the working interest in service contracts for the blocks located in the Oriana Department of Ecuador’s prolific Oriente Basin. The blocks have a long production history, with a total of 262 wells drilled and excellent seismic coverage. This has contributed to a great knowledge of the characteristics and characteristics of the area, the distribution of reservoirs, production mechanisms and additional exploration opportunities.

The blocks consist of 9 fields, with a total production on January 5, 2022 of 14,306 barrels per day (5,007 barrels per day) with an average gravity of 15.5 API. The initial production of approximately 373 million barrels of oil was accumulated in the blocks.

Existing infrastructure includes two oil and water treatment centers with a capacity of 75,000 barrels per day and 900,000 barrels of water per day, with all water production re-pumped into 30 wells. Additional infrastructure for the area includes power plants and an upper plant for the production of diesel used in power operations.

Oil produced in the fields is transported by a 16-inch pipeline to Lago Agrio, where it is loaded into the Oleoducto de Crudos Pesados ​​Ecuador SA pipeline and transported to a port on the Pacific Ocean.

Tariffs are subject to service contracts and a portion of these tariffs are indexed according to the US CPI/PPI. While current service contracts expire in December 2022, there is still significant production potential in the blocks, and the company previously announced plans to spend approximately US$200 million in 2022 and 2023 after completing negotiations with the Ecuadorean government to extend rights to the blocks. Through a production sharing contract.

Squares include commitments to reduce the environmental impact of operations, maintain high safety standards, and make long-term investments for the benefit of local communities.

Reserves

The net reserves attributable to the blocks as of November 30, 2021 until the expiry of service contracts in December 2022 are as follows:

  • 1P: 1.556 mm barrel

  • 2P: 1.577 mm barrel

New Stratus is committed to maintaining stability for all Repsol Ecuador SA employees in accordance with contractual obligations. Furthermore, New Stratus is committed to continuing to support the communities in the bloc’s sphere of influence and will continue to comply with all commitments made by Repsol Ecuador SA to neighboring communities, as stipulated by Ecuadorean law and the agreement with the Waorani Nation of Ecuador.

The company looks forward to continuing dialogue with Ecuador’s Ministry of Energy and Non-Renewable Natural Resources regarding contract conversion, contract extension and the applicable capital expenditure program.

Contact info:

Jose Francisco Arata
Chairman and CEO
jfarata@newstratus.energy

Valley Velisky
President and Director
wfelesky@newstratus.energy

Mario Miranda
Financial Director
mmiranda@newstratus.energy – (416) 363-4900

forward-looking information

Certain information provided in this press release constitute “forward-looking statements” and “forward-looking information” under applicable securities legislation (together, “forward-looking statementsAll statements other than statements of historical facts are forward-looking statements. Forward-looking statements may be identified using conditional or future tenses or by using words such as “will,” “expect,” “intend,” “may,” “should,” “estimates.” ,” “expects,” “believes,” “projects,” “plans,” and similar expressions, including various forms and passive forms. The forward-looking statements in this press release include expectations regarding management’s expectations regarding the transaction and plans with respect to drilling and operations on the blocks, expectations regarding capital investment in the blocks, an extension of the term of the blocks, a commission for a new reserves report, and entering into a production-sharing contract with the Government of Ecuador with respect to the blocks. It is based on the company’s current internal expectations, estimates, expectations, assumptions and beliefs, which may be incorrect. Forward-looking statements are not guarantees of future performance and should not be relied upon unnecessarily. With respect to the forward-looking statements made in this document, the Company has made them based on certain assumptions it believes are reasonable at this time, including assumptions regarding the Company’s ability to receive, in a timely manner, the ability for the Company to negotiate extensions to the term of blocks and to enter into contracts for participation in Production with the government of Ecuador, and the company’s ability to obtain debt financing on satisfactory terms, some or all of them may be incorrect. Accordingly, readers should not place undue reliance on the forward-looking statements contained herein. These forward-looking statements necessarily involve known and unknown risks and uncertainties, which could cause actual performance and financial results in future periods to differ materially from any expectations of future performance or results expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the ability to successfully integrate operations and achieve the expected benefits from the transaction; incorrect assessments of the value of the transaction; changes in commodity prices and currency exchange rates; currency fluctuations and interest rates; The ability to secure adequate debt financing; Management’s ability to anticipate and manage prior factors and risks. There can be no guarantee that forward-looking statements will prove to be accurate, and that actual results and future events may differ materially from those projected in such statements. New Stratus does not undertake to update forward-looking statements if circumstances, estimates or management opinions should change, except as required by applicable securities laws. New Stratus has included the above summary of the assumptions and risks related to the forward-looking statements contained in this press release in order to provide readers with a more complete perspective on the transaction and this information may not be appropriate for other purposes. Actual results, performance or achievement could differ materially from those expressed in or implied by these forward-looking statements, and therefore no guarantee can be made that any of the events foreseen in the forward-looking statements will occur or occur, or if any of them do, what the benefits that can be obtained from them.

Reserve alert

This news release includes reserve information attributable to blocks effective as of November 30, 2021 prepared by Petrotech Engineering Limited, a qualified, independent reserve evaluator. Reserve information has been prepared in accordance with the Canadian Oil and Gas Assessment Manual and National Tool 51-101, Oil and Gas Activities Disclosure Standards.

Statements about reserves and resources are forward-looking statements, because they include the implied assessment, based on certain estimates and assumptions, that the described reserves and resources exist in expected or estimated quantities. The reserve and resource estimates described here are estimates only. Actual reserves and resources may be greater or less than those calculated.

Estimates of net present values ​​of future net income, whether computed with or without a discount rate, do not represent the fair market value of the reserves.

Neither TSX Venture Exchange nor the Regulatory Services Provider (as defined in the TSX Venture Exchange policies) accept responsibility for the adequacy or accuracy of this release.

Not for publication in the United States or for distribution by any United States news distribution service

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/110114

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