Porto Energy Signs a Non-Binding Term Sheet for a US$15 Million Convertible Promissory Note Financing and Provides Operational Update
THE WOODLANDS, TX, March 13, 2014 /CNW/ - Porto Energy Corp., ("Porto") (TSXV:PEC), today announced that Porto and its wholly-owned subsidiary Mohave Oil and Gas Corporation ("Mohave" or the "Company") have entered into a non-binding term sheet (the "Agreement") with Integrity Growth Capital LLC (the "Lead Investor Representative") on behalf of accredited investors, for a private placement of senior unsecured convertible promissory notes (the "Notes") in the principal minimum amount of US$10 million and up to US$15 million (the "Financing"). The proceeds from the Financing will be used to drill, test and complete one Lias unconventional resource well and for other corporate purposes as determined by a Committee of the holders of Notes.
The Notes will be convertible into Mohave common stock. The applicable conversion rate of each Note shall be determined in a manner such that the holders of the Notes, in the aggregate, will own ninety percent (90%) of the outstanding voting capital stock of Mohave at the time of the conversion. The remaining 10% of the Company at the time of the conversion will be owned by Porto.
The closing of the Financing is expected to occur on or before May 31, 2014 and, if successful, is subject the negotiation and execution of definitive agreements, board approval, the approval of Porto shareholders and regulatory approval including the satisfaction of customary conditions of the TSXV. Porto is no longer pursuing the non-brokered private placement announced in its press release dated November 12, 2013.
In connection with the Company's seismic data sales agreement with TGS-NOPEC Geophysical Company ASA as disclosed in its press release dated January 29, 2014, approval from the Portuguese government has yet to be received. Management anticipates receiving this approval soon.
Porto's common shares trade on the TSX Venture Exchange under the symbol PEC. Porto currently has 198,954,653 common shares outstanding. The Company currently has $500,000 in cash.
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), Porto holds working interests in seven concessions in Portugal's Lusitanian Basin totaling 1.6 million net acres. Through its exploration efforts to date, Porto 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.
This press release contains certain forward-looking statements. These statements relate to future events or Porto'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 Porto 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.For further information:
Heath Cleaver - Chief Financial Officer