Peak Discovery Capital Ltd V.PEC

RE: RE: JV with Sorgenia

[Iveybiz79]

Raymond James on farmout agreement:

Farm-out Potential

Porto’s management also provided us with some details on an ongoing farm-out

process. Specifically, the company’s aim is to enter into a joint venture on areas other

than the abovementioned, where a partner could help speed up the activity without

requiring Porto to dedicate material resources to these areas. It is our understanding

that Porto aims to farm out ~50% of its interests in some areas, including the large gas

play area. The company indicated that over 35 candidates are actively evaluating this

process, with the majority interested in both onshore as well as offshore land positions

from Porto’s current portfolio.

While we don’t currently assign any value to the company’s land beyond a 2-year

activity window (given our view of the current markets’ risk aversion), we believe a

farm-out of any of these lands would be viewed as very positive by the markets.