THE WOODLANDS, TX, May 22, 2012 /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 that its one year drilling rig contract with KCA Deutag ("Deutag") has expired. As a result, the Company will settle all outstanding payables with Deutag including a final demobilization fee of €350,000. Upon conclusion of these final provisions of the contract, Porto expects to receive its US$2.8 million restricted cash deposit which is currently collateralizing a third party bank guarantee under the terms of the rig contract. KCA Deutag has informed Porto that it intends to leave the rig stacked at the Company's facility for the near-term with Porto providing for fuel and onsite security.
"We are very pleased that Deutag is working with us while we finalize ongoing JV negotiations. We will also continue to push forward with multiple joint venture initiatives with a focus on opportunities to test the pre-salt," said Joseph Ash, President and CEO of Porto Energy Corp. "With the rig remaining stacked at our facility, we anticipate being able to draft a new rig contract similar to our previous agreement and resume key elements of our planned drilling program once our current joint venture discussions have concluded successfully. Meanwhile we will be preparing the pre-salt location in anticipation of finalizing a new rig contract with Deutag and mobilizing the rig within the next 30 to 45 days."
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 five concessions in Portugal's Lusitanian Basin totaling 1,444,152 net acres or 5,844 km2. 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 visit www.portoenergy.com.
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.
For further information:
Heath Cleaver - Chief Financial Officer