New Stratus Energy Inc. announces that during the period of negotiations between Petrolia S.A. ("Petrolia"), a wholly-owned subsidiary of New Stratus, and the Government of Ecuador, specifically the Ministry of Energy and Mines ("MEM"), because of the Notice of Controversy submitted by Petrolia in November 2022 in accordance with Clause 33 of the Petroleum Contracts for Blocks 16 and 67, the Consortium Block 16 (the "Consortium") has been notified of a final and definitive ruling by the Tax Court of Ecuador regarding a previous year tax claim, which granted the Consortium the right to obtain a tax credit for approximately $20 million Canadian dollars.
Petrolia has notified each member of the Consortium and in compliance with the provisions of this ruling has made these tax credit notes available effective immediately.
Due to the allocation mechanism among the partners in the Consortium, Petrolia is the sole beneficiary of the tax credit refund. The refund will not have an income statement impact on Petrolia's financial statements; however, it will have a positive impact on the Corporation's working capital figures in the amount of approximately $20 Million Canadian dollars. This working capital increase is in addition to the adjusted working capital value disclosed in the Corporation's First Quarter press release on May 30, 2023. Further information will be provided in the release of the Corporation's Second Quarter 2023 Financial Statements, due not later than August 29, 2023.
Although the Corporation continues to pursue its legal demand against the Government of Ecuador under International Arbitration, it has a strong commitment to reach, in the shortest time possible, a direct amicable solution to the existing controversies. At the same time, on July 11, 2023, the MEM announced the official tender process for Blocks 16 and 67 in Ecuador, formerly operated by Petrolia. The Corporation intends to review the data package when available and make a decision to participate within the context of the ongoing arbitration.
