THE WOODLANDS, TX, Oct. 7, 2013 /CNW/ - Porto Energy Corp.,
("Porto" or the
"Company") (TSXV:PEC), today announced that that in light of
its ongoing capital requirements necessary to advance its oil and
gas exploration program in Portugal, it has formed a Special Committee of
independent directors and initiated a strategic review process to
identify, examine and consider a range of strategic alternatives
available to Porto, with a view to
preserving and maximizing shareholder value. This process could
result in a sale of the Corporation, a private placement or public
financing through the issuance of debt, equity or a combination of
both, a sale of a material portion of the Corporation's assets, a
merger, business combination or a corporate reorganization, among
other alternatives. The Special Committee has retained Black Spruce
Merchant Capital Corp. as its financial advisor to assist in the
strategic review process.
Corporate Highlights
Porto currently
has a working capital balance of approximately $1.3 million and a Portuguese income tax pool of
approximately $130.0 million at
May 31, 2013. Included in these
tax pools are non-capital losses available to carry forward to
future years of approximately $37.3
million.
The Company's independent resource evaluation
(the "Report") performed by Dallas,
Texas-based Netherland, Sewell & Associates, Inc.
("NSAI") effective December 31, 2012
and dated January 10, 2013, assigned
a P50 risked recoverable Contingent Resources associated with the
Company's Jurassic reef and other exploration prospects of
approximately 44 mmboe and a P50 risked recoverable Prospective
Resource mainly attributable to the Company's Lias Resource and
Presalt Conventional prospects of approximately 637 mmboe (535
mmboe on a net working interest basis).
As stated in the Company's January 31, 2013 press release, work to
characterize the Jurassic Lias resource play included finalized
aeromagnetic data over the blocks, the drilling and analysis of 23
shallow wells and the development of a Lias deposition model that
greatly increased the Company's understanding of the Lias marls in
the central and northern blocks. This work underpinned the
Report by NSAI and points to a very prospective unconventional
resource play that merits additional technical evaluation.
Review Process
Porto does not
intend to disclose developments with respect to the strategic
review process unless and until the Board of Directors has approved
a definitive transaction or strategic option, or unless otherwise
required by law or disclosure of which is deemed appropriate. The
Corporation cautions that there are no guarantees that the
strategic review will result in a transaction or if a transaction
is undertaken, as to its terms or timing.
Porto's common
shares trade on the TSX Venture Exchange under the symbol PEC.
Porto currently has 198,954,653
common shares outstanding.
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 1.6
million net acres. Through its exploration efforts to date, the
Company has identified seven major exploration trends over its
concessions and generated more than 45 prospects and leads. 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
Corp.
Black Spruce is a private merchant banking firm
focused on providing specialized financing and advisory services to
the global energy industry. Our award-winning principals have a
history of achieving success for clients based on high-level
industry focus, strong industry relationships and innovative
transaction skills. Offering advice in project, corporate and
credit syndication; equity-linked financings; mergers and
acquisitions; and strategic business development. For more
information on Black Spruce visit: www.bsmc.ca
Cautionary Statements
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.
Contingent resources are those quantities of
petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology
or technology under development, but which are not currently
considered to be commercially recoverable because of one or more
contingencies. The contingent resources shown are contingent upon
demonstration of the economic viability of the projects. Commercial
flow rate testing and documentation of development plans will
provide further evidence of economic viability of these projects.
If these contingencies are resolved, some portion of the contingent
resources estimated may be reclassified as reserves. There is no
certainty that it will be commercially viable to produce any
portion of the contingent resources.
Low Estimate is considered to be a conservative
estimate of the quantity that will actually be recovered. It is
likely that the actual remaining quantities recovered will exceed
the low estimate. Using probabilistic methods, there should be at
least a 90 percent probability (P90) that the quantities actually
recovered will equal or exceed the low estimate.
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.
High Estimate is considered to be an optimistic
estimate of the quantity that will actually be recovered. It is
unlikely that the actual remaining quantities recovered will exceed
the high estimate. Using probabilistic methods, there should be at
least a 10 percent probability (P10) that the quantities actually
recovered will equal or exceed the high estimate.
Barrels of oil equivalent (BOEs) include oil,
solution gas, associated gas and condensate. BOEs may be
misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf: 1 bbl has been used and is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
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.
SOURCE Porto Energy Corp.