MEPI through its wholly owned U.S. subsidiary Mohave Oil and Gas Corporation was awarded five new Concessions by the Portuguese Ministry of Economy on Friday August 2, 2007. They are the Aljubarrota 3, Torres Vedras 3, Sao Pedro de Muel 2, Cabo Mondego 2, Rio Maior 2 Concessions, all located within the Lusitanian Basin of Portugal. The five Concessions are contiguous and cover an area of approximately 6200 sq km (1.5 million acres). Under the terms of these Concessions, Mohave has been granted an 8 year exploration period that can be extended in one year increments for 2 years, and a 25 year production period that can be extended in 15 year increments up to 45 years.
The five Concessions carry a royalty on oil production on a per field basis. In the onshore there is no royalty for production up to 6125 bpd, a 6% royalty for production between 6125 bbls and 10,200 bpd, and a 9% royalty on production greater than 10,200 bpd. In the offshore there is no royalty for production up to 10,200 bpd and a 10% royalty for production greater than 10,200 bpd. There is no royalty for gas or condensate, but under Benefits to the State for each Concessions, after all investments and operating costs have been deducted from each producing field, the government receives 2% of the net revenues from gas or condensate production up to a total of 5 million barrels oil equivalent, 5% of the net revenues from gas or condensate production of a total between 5 million and 10 million barrels oil equivalent, and 7% of the net revenues from gas or condensate production that exceeds 10 million barrels oil equivalent. The total of investments is expensed annually to the limit of revenues and the corporate tax rate on production is 28.2%.
The Company also announces the appointment of Gregory G. Turnbull to the board of directors. He is the Regional Managing Partner of the Calgary office of McCarthy Tetrault LLP, Barristers and Solicitors. Greg has been a director of a number of public international oil and gas companies including Rally Energy Corp. and Heritage Oil Corp.
Mohave Exploration and Production Inc. is a Canadian-based company focused on oil exploration and production in Portugal and is managed by a team of experienced oil and gas and finance professionals from the U.S.A., Canada and Europe.
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