THE WOODLANDS, TX, August 24, 2012 – Porto Energy Corp., (“Porto” or the “Company”) (TSXV:PEC), a company focused on oil and gas exploration, appraisal and development in Portugal, today announced the engagement of Black Spruce Merchant Capital Corporation (“BSMC”) to provide financial advisory services with respect to project and corporate, business combinations as well as equity and debt financings as part of the ongoing development on Porto’s seven concessions in Portugal’s Lusitanian Basin.
Porto is currently actively advancing two of its projects in Portugal. First, on June 29, 2012 Porto through its wholly owned subsidiary, announced a definitive farmout with Petróleos de Portugal – Petrogal (“Galp”) whereby Galp will pay the Company approximately US$7.8 million to earn 50% of the Company’s rights in the Aljuabarrota-3 concession, comprising approximately 300,000 acres, onshore Portugal. Under the terms of the agreement, the Company intends to drill a Presalt well with a target depth of approximately 3,000 meters. Drilling is expected to commence in late August, 2012 and take approximately 45-55 days to complete. This well has a NI51-101 estimate of 588 BCF P50 gross unrisked resources (294 BCF net P50 unrisked resources). Second, on March 1, 2012, Porto announced a definitive agreement with Sorgenia International B.V., Netherlands (“Sorgenia”), and Rohöl-Aufsuchungs Aktiengesellschaft, Austria (“RAG”), (together the (“Farm-in Partners”), to jointly evaluate the unconventional resource potential of the Lower Jurassic (Lias) stratigraphic interval within Porto’s concessions in Portugal. Porto retains operatorship of the Company’s concessions and the joint venture. With the additions of the two new concessions in May 2012, Zambujal and Peniche, the area to be jointly evaluated is approximately 690,000 acres. The Lias stratigraphic interval is being pursued as an unconventional resource throughout Europe. Second phase activities, for which Porto will be carried for until phase 3, include the drilling of two deep wells and additional geochemical and geophysical analysis. The costs associated with the two wells will be shared equally between the Farm-in Partners capped at a gross cost of US$10.0 million, net of mobilization and demobilization costs. Phase 1 of this joint venture is currently underway with the drilling of 19 wells (9 core wells) of which 11 wells have been drilled and logged to date both inside and outside the AMI to determine the outer extent of the Lias interval over the Lusitanian Basin. The focus of the first phase, which must be completed by December 31, 2012, is on developing a comprehensive geophysical and geochemical analysis of the Lias interval.
Porto continues to pursue interests in its other concessions, most notably its offshore acreage for which the Company has shot and interpreted approximately 1,100 km2 of seismic data. Using this data, the Company has mapped approximately 3 – 4 prospective opportunities.
Upon the engagement of BSMC, the Company issued to BSMC 1,000,000 options exercisable at a price of $0.11 per common share for three years to vest one third every six months from the date of the engagement. In addition, BSMC will be paid a monthly work fee during the term of the engagement, milestone fees in certain circumstances and a financing success fee on the closing of any debt or equity financing provided to Porto.
About Porto Energy Corp.
Porto Energy Corp. is an international oil and gas company engaged in the exploration of crude oil and natural gas in Portugal, including the appraisal of a gas discovery. Through its wholly owned subsidiary, Mohave Oil And Gas Corporation (a Texas corporation with branch offices in Portugal), the Company holds working interests in seven concessions in Portugal’s Lusitanian Basin totaling approximately 1.9 million net acres. Through its exploration efforts to date, the Company has identified seven major exploration trends over its concessions including unconventional oil and gas resource plays as well as conventional oil and gas targets. Porto Energy’s shares trade on the TSX Venture Exchange under the ticker symbol “PEC”. For more information on Porto Energy visit: www.portoenergy.com.
About Black Spruce Merchant Capital
Black Spruce is a private independent merchant banking company focused on providing executive level and unbiased financial advisory services to the global oil and gas industry. Black Spruce’s award winning principals have a history of achieving success for clients based high-level industry focus, strong industry relationships and innovative transaction skills. Offering advice in project, corporate and debt capital markets; equity-linked financings; mergers and acquisitions; and strategic business development.
No proved, probable or possible reserves have been assigned by the Company at this time. Undiscovered resources are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered. Estimates of resources always involve uncertainty, and the degree of uncertainty can vary widely between accumulations/projects and over the life of a project. There is no certainty that it will be commercially viable to produce any portion of the resources.
Estimates with respect to resources that may be developed and produced in the future are often based upon volumetric calculations, probabilistic methods and upon analogy to similar types of resources, rather than upon actual production history. Estimates based on these methods generally are less reliable than those based on actual production history. Subsequent evaluation of the same resources based upon production history will result in variations, which may be material, in the estimated resources. Resource estimates may require revision based on actual production experience.
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.
Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. Using probabilistic methods, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
This press release contains certain forward-looking statements. These statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, “predict” and “potential” and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements that are contained in this press release, except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information:
Porto Energy Corp.
Heath Cleaver – Chief Financial Officer
Black Spruce Merchant Capital Corp.
Sonny Mottahed – CEO
SOURCE: Porto Energy Corp.