Porto Energy and Galp to Test Pre-Salt in Aljuabarrota-3 Concession in Portugal

Porto Energy, an international oil and gas company, has signed a farmout agreement with Petróleos de Portugal - Petrogal (Galp) to analyze the pre-salt in the Aljuabarrota-3 concession located in Portugal.

Under the terms of the contract, Galp will pay about US$7.8 million to Porto Energy to acquire 50% of the ownership in the Aljuabarrota-3 concession. The collaboration will test an aspect that was assigned about 100 million barrels of oil equivalent non-risky potential resources in Porto Energy’s March 31, 2012 resource update obtained from Netherland, Sewell & Associates.

Based on the agreement, Porto Energy plans to drill the Alcobaça #1, a pre-salt well, in the concession which is likely to have a depth of about 3,000 m. The overall cost of the well is anticipated to be approximately US$7 million and the drilling work is expected to begin in the end of August, 2012. The work will take nearly 45-55 days for completion.

Porto Energy will remain as the operator of the Alcobaça #1 via drilling and later Galp will have the preference to operate the concession. Once the drilling and testing of the well is completed, Galp has the choice to purchase a 25% interest in other concessions of Porto Energy in exchange for payments that totals up to 25% of Porto Energy’s sunk costs in every concession.

Porto Energy has also ended negotiations with KCA Deutag to purchase the rig currently found at its facilities. The company has started construction at the well site and intends to assemble the rig to the site after signing a drilling rig agreement.

Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.