- New Stratus Energy (NSE) is providing an update on its Ecuador assets and announcing its intention to pursue international arbitration
- A meeting was held in Quito, Ecuador, with the President of Ecuador and the Minister of Energy
- Ecuador does not intend to fulfill its legal and contractual obligation to appoint the required Negotiations Committee for the extension and migration of the contracts
- New Stratus Energy (NSE) is a Canadian resource company involved in the acquisition, exploration, and development of oil& gas properties
- New Stratus Energy (NSE) is trading at C$0.18 as of 12:52 pm ET
New Stratus Energy (NSE) provided an update on its Ecuador assets and announced its intention to pursue international arbitration.
A meeting was held in Quito, Ecuador, with government officials and the corporation. Among those present were members of the corporation and the President of Ecuador, Guillermo Lasso, along with his Minister of Energy, Fernando Santos.
The government of Ecuador informed the corporation and its advisors that it does not intend to fulfill its legal and contractual obligation to appoint the required Negotiations Committee for the extension and migration of the contracts for Blocks 16 & 67. Therefore, the contracts for Blocks 16 & 67 will expire on December 31, 2022.
As a direct result of the legal, political and other measures taken by the government, the corporation will be pursuing its legal and contractual rights through formal international arbitration. Having acted in good faith throughout 18 months of discussions with the government, the corporation is ‘shocked’ by this sudden change of posture of the President, who in several previous meetings had welcomed and encouraged the corporation’s plans to pursue the contractual extensions.
The President and Minister clearly indicated to the corporation that this decision is politically motivated. As such, the decision could discourage foreign direct investment in Ecuador given the government’s lawless interpretation of the contracts, a ‘clear and blatant infringement of the rule of law.’
The corporation expects to finish the calendar year with approximately C$0.30 per share in cash and short-term receivables. The corporation’s working interest partners are being notified of this legal non-compliance by the government. The corporation will file a legal demand against the government under International Arbitration. The corporation commits to pursuing its legal and contractual rights with minimal cash dilution to shareholders.
The corporation commits to stewarding its remaining capital as it pursues new opportunities. The corporation maintains a strategic alliance with Baker Hughes, which, in the short term, will result in new business opportunities outside of Ecuador.
Jose Francisco Arata, CEO of New Stratus Energy, says:
“We are deeply saddened to share this news with our trusted shareholders. The development of the remaining reserves of Blocks 16 and 67 required both additional investment and technical expertise, which the corporation is well-positioned to provide. The corporation’s proposed development plan would have produced significant benefits for Ecuador and the Waorani Nationality by way of revenues, employment and social benefits.”
New Stratus Energy (NSE) is a Canadian resource company involved in the acquisition, exploration, and development of oil & gas properties.
New Stratus Energy (NSE) is trading at C$0.18 as of 12:52 pm ET.