Portugal: Galp to take Lusitanian onshore farmout

Portugal’s Petrogal (Galp) has taken a farmout from a unit of Porto Energy Corp., The Woodlands, Tex., to earn a 50% interest in the Aljubarrota concession in Portugal’s Lusitanian basin for $7.8 million.

Under terms of the definitive agreement, Galp will drill the Alcobaca-1 presalt well on a feature assigned an unrisked prospective resource of 100 million bbl of oil equivalent. Target depth is 3,000 m. The well is to spud in late August 2012.

Galp will acquire a 50% participating interest in exchange for payment of 50% of Porto’s sunk costs in the concession totaling $4.3 million and payment of Galp’s participating interest share (50%) of costs from and after the effective date of the agreement.

After drilling and testing Alcobaca-1, Galp has the option to acquire a 25% working interest in each of the company’s other concessions in exchange for payments totaling no more than 25% of Porto’s sunk costs in each concession (OGJ, Dec. 8, 1997, p. 67). Porto will remain the operator through the drilling of Alcobaca-1, after which Galp will have the option to become concession operator.