CALGARY, ALBERTA (By NSE, 5.Aug.2025, Words: 1,250) — New Stratus Energy Inc. announced the signing of a significant farm-in Memorandum of Understanding (MOU) with Vultur Oil to develop the Concession Contracts located in the state of Bahia, Brazil. The arms-length MOU was signed on 4 Aug. 2025.
Concession Contracts
he Blocks comprise 2 concession contracts for the exploration, development and production of oil and gas, being: (i) N° 48610.010812/2015-04 issued by the National Agency of Petroleum, Natural Gas and Biofuels of Brazil (ANP) dated 23 Dec. 2015, over a block known as REC-T-108 (the “108 Contract”); and (ii) N° 48610.005425/2013-86 issued by the ANP dated 30 Aug. 2013, over a block known as REC-T-107 (the “107 Contract” and together with the 108 Contract, the “Concession Contracts” or “Blocks”). Vultur holds a 100% working interest in the Concession Contracts.
The Concession Contracts are located in the Reconcavo Basin, onshore, in the State of Bahia in eastern Brazil. The Blocks are adjacent to the Araças field which is owned and operated by Petrobras, the state-owned oil company of Brazil. The three main reservoirs in the basin are the Candeias, the Agua Grande and the Sergi. Since 2012, Petrobras has produced approximately 5.9 million barrels of oil equivalent (boe) (3.6 million barrels of oil and 375 million cubic meters of natural gas) from the Aracas field
Historical Operations
In Apr. 2025, Vultur successfully re-entered and hydraulically stimulated the Candeias Formation in the GREN well (originally drilled in 2019), located in the northern portion of Block REC-T-108. Following the recompletion with electronic submersible pump (ESP) artificial lift, the well is currently under long term testing. Initial results are promising with 1P volumes reaching up to 100,000 barrels of light 36° API oil thus far. The well will remain on long term test through October to establish operating parameters and a stable production base.
Prior to the GREN, the previous owner drilled the GOP exploration well in REC-T-107 in 2017. The well reached a total vertical depth (TVD) of 3300m, confirming the presence of hydrocarbons in both the Agua Grande and Sergi primary target formations. The well was completed and tested in the Sergi, and between February 2018 and September 2019 the well produced light crude demonstrating producibility from these sands. The intricate reservoir architecture highlights significant potential for the area under horizontal drilling and multistage fracking- techniques which are expected to substantially increase rates and ultimate recovery.
In 2021, the previous owner commenced a unitization process with Petrobras SA seeking recognition of certain production from Petrobras’ adjacent Aracas field that was being drained from the areas of the Concession Contracts, including a claim against associated past revenues. Vultur remains involved in the unitization claim and, upon earning the entire 32.5% working interest, net proceeds (if any and after legal costs) from unitization or equalization shall be distributed among the Joint Partners according to their working interests.
In addition to the above, in 1956, Petrobas drilled an exploratory well in the lower portion of the concession at a location called Progresso encountering natural gas. While Petrobras had not prioritized natural gas development at the time, over 42 billion cubic feet of natural gas has been produced from the same Agua Grande and Sergi formations at the offsetting Biriba Concession.
Reserves
At Closing, the reserves estimates(1) attributable to New Stratus’ 15% working interest in the Blocks are as follows(2):
– Gross Proved Reserves are estimated at 1.42 million barrels of oil equivalent (BOE) having a before-tax net present value of future net revenue at a 10% discount rate (NPV10) of $15.2mn.
– Gross Proved plus Probable Reserves are estimated at 2.30 million BOE having a NPV10 of $24.0mn.
Assuming the completion of the Second Stage Investment, the reserves estimates(1) attributable to New Stratus’ 32.5% working interest in the Blocks are as follows(2):
– Gross Proved Reserves are estimated at 3.07 million BOE having a NPV10 of $32.83mn.
– Gross Proved plus Probable Reserves are estimated at 4.98 million BOE having a NPV10 of $52.0mn.
Notes: (1) See “Oil and Gas Advisory”, below. (2)
The working interest of New Stratus in the Blocks will be 15% at Closing and 32.5% upon completion of the Second Stage Investment.
The reserves information attributable to the Blocks is effective as of 1 Aug. 2025 and based on the procedures and standards contained in the Petroleum Resources Management System (“PRMS”) of the Society of Petroleum Engineers. The use of PRMS differs from the reserves estimation requirements under Canadian securities laws.
MOU Terms
In accordance with the terms of the MOU, the Joint Partners intend to negotiate, settle and execute: (i) a definitive farm-out agreement providing for, among other things, the assignment and transfer to NSE of a 32.5% working interest in, the Concession Contracts (the “NSE Working Interest”); and (ii) a joint operating agreement (the “JOA” and together with the “Farm-Out Agreement” the “Definitive Agreements”) for the development of the Concession Contracts.
Upon execution of the Definitive Agreements, Vultur shall submit the assignment approval application to the Brazilian National Petroleum Agency (ANP) to permit the acquisition by NSE. The assignment approval application will be phased and after the obtainment of ANP’s first approval, which is expected within 90 days, the initial fifteen percent (15%) working interest will be transferred to NSE on the date of the closing of the transaction (the ”Closing”). The remaining 17.5% working interest will be subject to a second ANP approval, in accordance with the terms of the Definitive Agreements, and will occur upon the completion of the Second Stage Investment (as defined below). Upon earning its working interest in the Blocks, NSE will participate in proportion to its working interest in any net proceeds from any operations and other income related thereto. Direct capital investments and operational costs are to be borne by the Joint Partners in proportion to their respective working interest in the Concession Contracts.
The forms of the Definitive Agreements will contain customary terms and conditions of transactions of these types and nature and are expected to comply with the model farm out and joint operating agreement 2023 of the Association of International Energy Negotiators. Closing remains subject to ANP approval and the approval requirements of the TSX Venture Exchange.
As exclusive and final consideration for the transactions contemplated by the Definitive Agreements NSE will be responsible for:
1. At Closing, funding of $5mn, which will be used to develop a horizontal re-entry well in the existing GOP well and/or a step-out of the current discovery well at GREN (the “First Stage Investment”). The completion of such well or intervention is estimated within 180 days from Closing (the “First Stage Activities”); and
2. Within 180 days from completion of the First Stage Activities, funding an additional amount of $5mn, which will be used for drilling of new lateral wells out of either the GREN or GOP wells (the “Second Stage Investment”).
No debt is currently being contemplated to fund the Transaction and no finders fees are payable.
Wade Felesky, President and Director of New Stratus, commented: “This is a very exciting opportunity for NSE to partner with Vultur in this world class asset in the heart of Brazil. The Reconcavo Basin has a rich history of hydrocarbon development and production with untapped exploration upside. This deal provides for enhanced shareholders returns as we continue to work on closing Block 60 in Ecuador this fall, further develop Soledad in Mexico and advance other value added projects in Latin America.”
Horizon Partners acted as financial advisor to New Stratus with respect to the Transaction.
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