Re: June 29 Press Release? Below is the June 29 Press release, can someone explain the highlighted reference in the 2nd paragraph in regards to the 100 million barrels and how that # is determined and does the term "oil equivalent" refer to gas? Also, does anyone know how accurate this type of "unrisked potential resources" has been? Is this where the 30% chance occurs or does the 30% refer to the drill being able to hit this target?
THE WOODLANDS, TX, June 29, 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 that it has entered into a definitive farmout agreement (the "Agreement"), through its wholly-owned subsidiary Mohave Oil and Gas Corporation, with Petróleos de Portugal – Petrogal ("Galp"). 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. Closing of the agreement is subject to customary conditions including the receipt of all regulatory and government approvals.
"We are excited about our new partnership with Galp to test the pre-salt in the Aljubarrota concession," said Joseph P. Ash, President and CEO of Porto Energy Corp. "We continue to advance our joint venturing strategy thanks to our large working interest in each of our concessions, and the highly attractive prospects uncovered by our 3D seismic campaign. This venture will test a feature that was assigned approximately 100 million barrels of oil equivalent unrisked prospective resources in our March 31, 2012 resource update from Netherland, Sewell & Associates, Inc."
Under the terms of the Agreement the Company intends to drill a pre-salt well, the Alcobaça #1, in the Alubarrota-3 concession with total expected well costs of approximately US$7.0 million. The well has a target depth of approximately 3,000 meters, with drilling expected to commence in late August and take approximately 45-55 days to complete. Under the terms of the Agreement, Galp will acquire a 50% participating interest in exchange for payment of 50% of Porto’s sunk costs in the Aljubarrota-3 concession totaling approximately US$4.3 million and payment of their participating interest share (50%) of costs from and after the effective date of the Agreement.
Following the drilling and testing of the Alcobaça #1, Galp has the option to acquire a 25% working interest in each of the Company’s other concessions in exchange for payments totaling no more than 25% of Porto’s sunk costs in each concession. The Company will remain the operator through the drilling of the Alcobaça #1 well, after which Galp will have the option to become the concession operator.
The Company has finalized negotiations with KCA Deutag to secure the rig currently stacked at Porto’s facilities following the expiration of the initial drilling contract between the parties. Under the negotiated terms, Porto is securing the rig on a single well basis at this time with an option on subsequent wells. The Company anticipates signing the final agreement next week. Porto has begun well site construction and plans to mobilize the rig to the well site following signature of a drilling rig contract.
"This agreement allows us to move forward with our plan to test the pre-salt potential in our Aljubarrota concession and we are targeting a late August 2012 spud for the well," said Mr. Ash. "This second partnership indicates the high degree of interest we are generating in our prospective plays and we continue to build momentum with these types of initiatives, especially in the pre-salt which remains a primary and compelling target for us. It also underlines our commitment to bringing in industry partners to increase working capital, while mitigating the dilution to our shareholders, with an emphasis on long-term commitments with well-known groups in the region."
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 vis