New Stratus Energy Inc. ("New Stratus", "NSE" or the "Corporation") is pleased to announce the consolidated financial and operating results for the three and nine months ended September 30, 2024 that have been filed on SEDAR+ (www.sedarplus.ca).
Q3 September 30, 2024 Highlights:
• Adjusted Working Capital(1)(4): $7,276,143 ($0.05 per basic common share)
• Net Income (Loss) (Basic & Fully Diluted)(2): ($1,802,602) (($0.02) per common share)
• Income from Investment in Joint Venture: $1,310,727
• Adjusted EBITDA(3)(4): $5,516,665
Third Quarter Summary:
NSE reports our third quarter of operations from GoldPillar as well as our second quarter of operations at Soledad, with NSE's economic interest having begun there on May 1, 2024. The Corporation's net production as at September 30, 2024 was 1,131 boepd (1,029 boepd from Soledad and 102 boepd from GoldPillar).
Investment in Soledad
As of September 30, 2024, NSE has recorded an investment of $64.4 million in the operating company Operaciones Petroleras Soledad ("OPS") as follows:
$20.2 million advanced to fund initial operational and capital expenditures
$2.7 million in initial consideration for 49% equity in OPS
$40.5 million for operational and capital expenditures for 2025 and 2026
NSE is entitled to 80% of all cashflows until total operational and capital expenditures have been recovered
NSE's 49% equity pickup in OPS as at September 30, 2024 is $972,925
The business opportunity for Soledad remains intact with the initial capital program scheduled to begin March 2025. The conversion from a Service Contract to a Production Sharing Agreement with Pemex has had some expected and unexpected delays, however we remain excited about the prospectivity of the asset and look forward to increasing our working interest to 90% by the end of 2025.
Investment In GoldPillar
As of September 30, 2024 NSE has recorded an investment of $21,346,823 in the operating company Desarrolladora de Oriente "DDO" as follows:
$0.5 million in required capital costs
$3.4 million in consideration paid to the beneficial owner of DDO
$7.4 million in finders fees payable starting in May 2024
$5.4 million required capital costs
NSE's share of the equity pickup as at September 30,2024 is $4,639,305
Unfortunately the business opportunity for GoldPillar has not performed in accordance with management's expectations. Despite the huge development opportunity and historical production of over 60,000 boepd, the economic and social conditions have deteriorated so significantly that the stated business case in its current form is unattainable. NSE is working on various solutions to maximize value at GoldPillar despite the extremely challenge conditions. A resolution of this matter is expected within the next month.
Finally, as stated in the Q2 news release, NSE continues to work with the Government of Ecuador to find a resolution to its dispute and appropriate remedies as is outlined in the notice of arbitration filed in 2022. A positive resolution is expected within the next month.
