Mr. Heath Cleaver reports
PORTO ENERGY CORP. ANNOUNCES UPDATED RESOURCE ESTIMATES
Porto Energy Corp. has received an
updated independent resource evaluation from
Netherland, Sewell & Associates Inc. based in Dallas, Tex.
This report was completed on each of the seven concessions in which the
company maintains an interest. The updated report is dated Jan. 10,
2013, with an effective date of Dec. 31, 2012.
"We are pleased to announce that we have significantly increased our
prospective resources in the Lower Jurassic Lias unconventional
resource play as a result of the ongoing technical evaluation program
with our joint venture partners," said Joseph Ash, president and chief executive officer of
Porto Energy. "Despite reducing the prospective resources
associated with the number of conventional Jurassic reef exploration
targets, the reduction was more than offset by the increased geologic chance of success of finding hydrocarbon-bearing reservoirs in
the Silves, which was confirmed by the ALC-1 well. Our ongoing joint
venture initiatives will benefit from the updated report that augments
the extensive technical analysis our team has performed to continually
high-grade our exploration portfolio and narrow our focus to the Lias
unconventional resource and Presalt conventional plays. In turn, this
narrowed focus will help concentrate our farm-out efforts."
Comparing the updated report with the original NSAI report dated Aug.
31, 2012, prospective resources for the Lias increased from 95.4 million barrels of oil equivalent
(best estimate) to 366.8 million boe (best estimate), an increase of 271.4
million boe or 284 per cent. Similarly, the low case increased from 2.2 million boe to
22.6 million boe, and the high case increased from 572.6 million boe to 1,399.4
million boe, or 927 per cent and 144 per cent, respectively.
Phase 1 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 updated report
by NSAI and points to a very prospective unconventional resource play
that merits additional technical evaluation.
The Alcobaca No. 1 Presalt exploration well in the Aljubarrota-3 concession, onshore
Portugal (as announced Nov. 1, 2012), helped to confirm gas-bearing
reservoirs, despite being a subcommercial gas discovery. In turn,
this well has significantly derisked other Presalt prospects due to a
confirmation of source rock, reservoir-bearing sands and trapping
mechanism in the Silves interval.
Comparing the updated report with the original NSAI report dated Aug.
31, 2012, P50-risked recoverable contingent resources remained
relatively unchanged. Resources associated with the company's Jurassic
reef and other exploration prospects, P50-risked resources, decreased by
approximately 97.3 million boe; however, this was offset by an increase in
the Lias potential of approximately 271.4 million boe and the Presalt Silves
reservoir potential of approximately 23.9 million boe of P50-risked
prospective resources.
Compared with the original NSAI report, P50-net-risked recoverable
prospective resources increased 198 million boe, or 45 per cent, from 439 million boe to
637 million boe. In total, the updated report has a combined (contingent
plus prospective) resource base composed of 47 per cent oil and 53 per cent natural
gas.
The updated report provides the data in the attached total contingent and prospective resources table with respect to risked
contingent and prospective resources.
TOTAL CONTINGENT AND PROSPECTIVE RESOURCES
(company's net interest -- mmboe) (1) (2)
Updated estimates Original estimates
Low Best High Low Best High
estimate estimate estimate estimate estimate estimate
Contingent 15.6 43.8 76.5 15.6 43.8 77.0
Prospective 91.0 636.9 2,285.9 142.4 439.3 1,541.8
(1) The company's primary operating activities are carried out through
Mohave, which has the principal working interest in the Aljubarrota-3
(42 per cent), Torres Vedras-3 (100 per cent), Sao Pedro de Muel-2 (94
per cent), Cabo Mondego-2 (70 per cent), Rio Maior-2 (100 per cent),
Zambujal (72 per cent) and Peniche (50 per cent) oil and gas
concessions in Portugal. All of the company's concessions are located
in the Lusitanian basin of Portugal.
(2) Barrels of oil equivalent include oil, solution gas, associated
gas and condensate. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6,000 cubic feet to one barrel
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.
SELECTED DATA FROM UPDATED RESOURCE
(company's net interest -- mmboe) (1) (2)
Resource category Updated estimates Last estimates as of
Aug. 31, 2012
Concession Low Best High Low Best High
prospect estimate estimate estimate estimate estimate estimate
Contingent
Aljubarrota 15.6 43.8 77.0 15.6 43.7 76.5
Torres Vedras (Lapaducos) -- -- -- -- -- 0.5
Total contingent 15.6 43.8 76.5 15.6 43.8 77.0
Prospective
Aljubarrota concession
Aljubarrota Brenha and Lias -- -- -- 17.1 31.5 49.1
Lias (formerly Basal Brenha) 12.7 110.1 382.0 0.7 12.0 86.3
Alcobaca (Silves) -- -- -- 11.7 34.1 91.7
Cinnabar (Silves and Jurassic) 5.9 25.5 127.3 5.9 25.5 127.3
Citrine (Silves) 0.7 2.7 10.1 0.7 2.7 10.1
Jasper (Jurassic) -- -- -- 1.2 4.6 16.9
Onyx (Jurassic) 2.1 6.0 16.4 2.1 6.0 16.4
Pyrope (Silves and Jurassic) 6.6 19.3 66.4 6.6 19.3 66.4
Sphene (Silves and Jurassic) 6.5 14.2 32.0 6.5 14.2 32.0
Tiger Eye (Silves and Jurassic) 7.2 17.4 44.5 7.2 17.4 44.5
Zircon (Jurassic) 2.7 8.4 30.9 2.7 8.4 30.9
Cabo Mondego concession
Lias (formerly Basal Brenha) 0.2 47.2 201.7 0.1 21.9 116.7
Moreia (Silves and Jurassic) 3.2 16.2 47.1 1.1 2.9 7.0
Pargo Silves 2.5 13.9 43.1 -- -- --
Sapphire (Jurassic) 0.8 3.5 10.8 0.8 3.5 10.8
Sargo Silves (formerly Topaz) 2.8 17.3 55.8 4.7 11.4 26.6
Peniche concession
Lias (formerly Basal Brenha) 2.3 13.5 43.3 -- 4.4 23.7
Rio Maior concession
Lias (formerly Basal Brenha) 2.3 65.5 259.2 0.9 14.8 110.3
Sao Pedro de Muel concession
Lias (formerly Basal Brenha) 1.0 59.6 238.5 0.1 15.9 84.5
Amethyst (Jurassic) 0.4 1.9 6.3 0.4 1.9 6.3
Bacalhau Silves (formerly Emerald) 8.7 52.0 177.7 10.5 31.0 110.4
Besugo Silves (formerly Azurite) 2.6 15.3 48.4 12.6 38.6 127.5
Turquoise (Jurassic) -- -- -- 7.0 14.5 28.9
Torres Vedras concession
Lias (formerly Basal Brenha) 4.0 62.8 240.7 0.3 5.2 38.4
Abadia dome (Jurassic) -- -- -- 1.9 5.5 23.0
Arruda Fan delta (Jurassic clastic) 7.3 14.5 28.7 7.3 14.5 28.7
Cruz da Pedra (Jurassic) -- -- -- 2.4 5.7 17.0
Hematite (Jurassic) -- -- -- -- -- 0.1
Lapaducos (Jurassic) -- -- -- 0.1 1.1 8.4
Limonite (Jurassic) -- -- -- 0.1 0.2 0.9
Moinho do Ceu (Jurassic) -- -- -- 0.1 0.6 3.1
Montalegre (Jurassic) 0.1 0.2 0.5 0.1 0.2 0.5
Olivine (Jurassic) -- -- -- 0.1 0.6 5.8
Eastern 2-D reefs -- -- -- 22.5 32.0 44.2
Western 2-D reefs -- -- -- 2.3 4.0 6.4
3-D reefs -- -- -- 1.2 2.8 5.8
Sao Juliao (Jurassic) -- -- -- 0.4 1.3 3.5
Sphalerite (Jurassic) -- -- -- -- 0.2 1.4
Turbidite -- -- -- 1.4 4.7 12.1
Aldeia (Jurassic) 0.2 1.2 5.6 -- -- --
Folgorosa (Jurassic) 0.1 0.5 2.7 -- -- --
Matacaes Silves 5.5 29.5 94.7 -- -- --
Moinho Velho (Jurassic) 0.1 0.8 3.8 -- -- --
Torres Vedras Silves 1.5 3.0 5.5 1.5 3.0 5.5
Torres Vedras (Jurassic) 0.1 1.2 5.6 -- -- --
Varatojo (Jurassic reef) 0.5 3.5 14.5 -- -- --
Varatojo Norte (Jurassic reef) 0.3 2.0 8.4 -- -- --
Zambujal concession
Lias (formerly Basal Brenha) 0.1 8.1 34.1 0.1 21.2 112.7
Total prospective 91.0 636.9 2,285.9 142.4 439.3 1,541.8
(1) The company's primary operating activities are carried out through
Mohave, which has the principal working interest in the Aljubarrota-3
(42 per cent), Torres Vedras-3 (100 per cent), Sao Pedro de Muel-2 (94
per cent), Cabo Mondego-2 (70 per cent), Rio Maior-2 (100 per cent),
Zambujal (72 per cent) and Peniche (50 per cent) oil and gas
concessions in Portugal. All of the company's concessions are located
in the Lusitanian basin of Portugal.
(2) Barrels of oil equivalent include oil, solution gas, associated
gas and condensate. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6,000 cubic feet to one barrel
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.
The updated report was prepared by NSAI in accordance with the
definitions, standards and procedures contained in the Canadian oil and
gas evaluation handbook and National Instrument
51-101 (standards of disclosure for oil and gas activities). Investors should also refer to the company's most recent NI
51-101 F1 filing dated Dec. 14, 2012, available on SEDAR, for additional information, including the risks and uncertainty
associated with the recovery of resources.
We seek Safe Harbor.
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