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

Executive Summary

• New Stratus Energy Inc. signed a definitive farm‑out agreement with Vultur Oil to acquire up to a 32.5 % working interest in two on‑shore oil and gas concession contracts (REC‑T‑108 and REC‑T‑107) in Bahia, Brazil.
• The transaction includes an initial US$5 M cash investment at closing (to fund a horizontal re‑entry well) and a further US$5 M second‑stage investment within 180 days of first‑stage completion for additional lateral drilling.
• Reserve estimates for New Stratus’ 15 % interest at closing are 1.42 MMBOE proved (NPV10 ≈ US$15.2 M) and 2.30 MMBOE proved + probable (NPV10 ≈ US$24.0 M); after the second‑stage investment, a 32.5 % interest would represent 3.07 MMBOE proved (NPV10 ≈ US$32.8 M) and 4.98 MMBOE proved + probable (NPV10 ≈ US$52.0 M).

Key Details

• Concession Contracts:
• REC‑T‑108 (Block 108, ANP No. 48610.010812/2015‑04) and REC‑T‑107 (Block 107, ANP No. 48610.005425/2013‑86). Both are on‑shore in the Reconcavo Basin, adjacent to Petrobras’ Araças field.
• Working Interest Transfer:
• Up to 32.5 % working interest to be transferred to New Stratus.
• Initial transfer of 15 % at closing; remaining 17.5 % upon completion of the Second Stage Investment.
• Closing Timeline & Conditions:
• Closing expected by end‑2025, subject to ANP assignment approval.
• Financial Commitments (First & Second Stage Investments):
• First Stage: US$5 M cash at closing for development of a horizontal re‑entry well in the existing GOP well and/or step‑out from the GREN discovery well; completion targeted within 180 days post‑closing.
• Second Stage: Additional US$5 M to be funded within 180 days after first‑stage activities, earmarked for drilling new lateral wells from GREN or GOP.
• Reserve Estimates (effective Aug 1 2025):
• At Closing – 15 % Interest:
  • Proved: 1.42 MMBOE; NPV10 ≈ US$15.2 M.
  • Proved + Probable: 2.30 MMBOE; NPV10 ≈ US$24.0 M.
• Post‑Second Stage – 32.5 % Interest:
  • Proved: 3.07 MMBOE; NPV10 ≈ US$32.8 M.
  • Proved + Probable: 4.98 MMBOE; NPV10 ≈ US$52.0 M.
• Historical Operations (context):
• April 2025 – Vultur re‑entered and hydraulically stimulated the GREN well, producing >100,000 bbl of 36° API light oil; peak pre‑stimulation rate ~1,000 bbl/d.
• GOP exploration well (drilled 2017) reached 3,300 m vertical depth, confirming hydrocarbons in Agua Grande and Sergi formations; demonstrated commercial production 2018‑2019.
• Unitization & Legal Considerations:
• Ongoing unitization claim with Petrobras for production from the adjacent Araças field; any net proceeds after legal costs will be distributed per working interests.
• Currency Assumption: US$1.00 = CAD$1.40 (used in all dollar figures).

Notable Quotes

• “The farm‑out agreement and associated investments position New Stratus to participate in a high‑potential on‑shore basin adjacent to Petrobras’ prolific Araças field, delivering significant upside through proven and probable reserves.” – Jose Francisco Arata, Chairman & CEO.