THE WOODLANDS, TX, May 26, 2014 /CNW/ - Porto Energy Corp., ("Porto" or the "Company") (TSXV:PEC), a company focused on oil and gas exploration, appraisal
and development in Portugal, today announced it will wind-down the
operations of its subsidiary, Mohave Oil and Gas Corporation, ("Mohave"). As a result, Mohave will be surrendering its concession acreage in
In addition, the board of directors of Porto intends to resign as of the
close of business on Friday, May 30, 2014, at which time it is
anticipated that trading in the common shares of Porto will be
suspended by the TSXV, with the eventual delisting of the Company from
the TSXV in due course.
The Company has been unable to attract investment interest in its
concession assets in Portugal. The Company believes this is largely
due to the lack of oil or gas production in Portugal. As a result of
its inability to procure the associated funding, there has been extreme
working capital pressure over the past eighteen months. During the
past six months, the Company has been in negotiations with two
investment candidates: one interested in farming-in and the other
interested in purchasing a significant interest in the subsidiary of
the Company, Mohave. The Company and the potential farm-in candidate
were unable to reach agreeable terms and discussions were terminated at
the beginning of May. Discussions with the other party interested in
purchasing a significant interest in Mohave were not successful as that
party was not able to secure the necessary funding. Those discussions
could not be continued given the Company's current working capital
As a result, the board of directors and management of the Company have
agreed that efforts cannot be reasonably continued given Porto's
working capital position and as a result, the board of directors of the
Company has determined to wind-down the Mohave's operations effective
May 30, 2014, at which time each of the directors of the Company intend
to resign as a director of the Company and Mohave, as applicable.
Over the past several months, the management and board of directors of
Porto have diligently pursued numerous and varied financing and
transactional opportunities for the Company. However, the difficult
financial markets and other factors have not led to a successful
completion of these initiatives.
The Company engaged financial advisors to provide financial advisory
services with respect to projects and potential business combinations
as well as equity and debt financings. The Company, along with its
advisors contacted over 250 prospective joint venture candidates.
Through its efforts, management was able to present its asset database
to approximately 30 candidates. Unfortunately, none of these
candidates were willing to commit an investment in the Company or its
In addition, the Company has made efforts over the last several months,
through TGS, to license and market four sets of seismic survey data,
including one 3D offshore survey spanning 1,099 square kilometers, two
3D onshore surveys totaling 358 square kilometers (excluding 160 square
kilometers of Aljubarrota 3D seismic data as it is jointly owned by the
Company and its joint venture partner, Galp, and one 24,000 square
kilometer aeromagnetic survey. Approval of the agreement was not
guaranteed to bring in immediate funding. However, in obtaining
government approval, TGS was then able to begin to market the Company's
seismic data to interested parties. Any sale would have brought
funding into the company within 30 days of the sales agreement.
Unfortunately, no sales were consummated.
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.
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
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.
SOURCE: Porto Energy Corp.