Sorgenia International BV, Milan, and Rohol-Aufsuchungs AG, Vienna, will join Porto Energy Corp., The Woodlands, Tex., in joint evaluation of the tight oil potential of the Lower Jurassic (Lias) shale on Porto’s concessions in the Lusitanian basin onshore Portugal.
Porto Energy will remain operator of the 450,000-acre area to be jointly evaluated (OGJ Online, Nov. 21, 2011).
Sorgenia and RAG initially will each secure a 32.33% working interest specifically in the Lias interval in exchange for their participation in the first phase of a three-phased work program. Porto will not be required to fund the joint venture until the third phase unless phase one and two encounter cost overruns.
The first phase, which must be completed by Dec. 31, 2012, is focused on developing a comprehensive geophysical and geochemical analysis of the Lias interval. Sorgenia and RAG will each fund 50% of the overall costs of the first phase work program with total program costs not to exceed $1 million.
The second phase will begin immediately following the first and must be completed by Aug. 1, 2014, but is subject to extension. Upon entry into the second phase, Sorgenia and RAG will each be deemed to have earned a 32.33% interest in the Lias interval. Second phase activities include the drilling of two deep wells and more geochemical and geophysical analysis.
Sorgenia and RAG will equally share the costs of the two wells capped at a gross $10 million, net of mobilization and demobilization costs. Other costs associated with the phase two work program will be shared according to the working interest held by each.
Phase three activity includes submission of a 5-year general development and production plan with further development and production initiatives to follow as necessary. Costs are to be borne by all parties according to their working interest in the Lias interval.