Petroleos de Portugal-Petrogal SA (Galp) has exercised its option to assume operatorship of the Aljubarrota-3 onshore concession in Portugal’s Lusitanian basin, subject to Portuguese government approval, said Porto Energy Corp., The Woodlands, Tex.
Porto Energy said the decision demonstrates Galp’s “belief in the potential of the asset,” which was the subject of a farmout the two companies signed in June 2012.
Under the terms of the definitive farmout agreement, Galp paid Porto Energy $4.3 million in back costs plus Galp’s share of drilling costs of the ALC-1 well, $6.15 million, to earn 50% of Porto’s Energy’s rights in the 300,000-acre Aljubarrota-3 concession.
The Portuguese government approved the 50% participation, which extends to all stratigraphic intervals, in September 2012. The two companies concluded a joint operating agreement in this year’s first quarter.
Porto Energy, through its Mohave Oil & Gas Corp. subsidiary, holds working interests in seven concessions totaling 1.6 million net acres on which it has identified seven major exploratory trends and generated more than 45 prospects and leads in the basin.