Baker Hughes To Assist With New Stratus Drilling In Ecuador

New Stratus Energy has executed a letter of intent with energy technology giant Baker Hughes Services International for work in Ecuador.

As previously disclosed on November 19, 2021, New Stratus, through Petrolia Ecuador S.A. – former Repsol Ecuador, as the operator, intends to invest approximately $200 million in 2022 and 2023 to drill and recomplete development wells on Blocks 16 and 67 in Ecuador following the completion of negotiations with the Government of Ecuador to extend rights to the Blocks through a production sharing contract.

The LOI will formalize New Stratus' and Baker Hughes' ongoing negotiations of one or more agreements governing the proposed strategic relationship concerning the drilling program and the development of the Blocks 16 and 67 and other potential projects in the Eastern Basin of Ecuador.

Under the terms of the LOI, New Stratus and Baker Hughes will potentially enter into a preferred supplier agreement and a technical services agreement.

The terms of the potential Preferred Supplier Agreement may include the provision of services not limited to drilling, completion, intervention, abandonment of wells, and artificial lift systems from Baker Hughes to New Stratus.

The terms of the Technical Services Agreement may include the technical evaluation of the reservoir, technical services, and engineering support for the drilling and workover development campaign to New Stratus.

The completion of the transactions and matters contemplated in the LOI remains subject to New Stratus and Baker Hughes entering into definitive agreements and signatures of the Preferred Supplier Agreement and/or Technical Services Agreement.

New Stratus Energy did add the approval of all internal and potentially external regulatory authorities that may apply.

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