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Press release from CNW Group

Porto Energy to Raise Up to $1.5 Million in a Non-Brokered Private Placement of Units

Tuesday, November 12, 2013

Porto Energy to Raise Up to $1.5 Million in a Non-Brokered Private Placement of Units

07:00 EST Tuesday, November 12, 2013

THE WOODLANDS, TX, Nov. 12, 2013 /CNW/ - Porto Energy Corp., ("Porto" or the "Company") (TSXV:PEC), today announced that further to the Company's October 7, 2013 press release, it has launched a non-brokered private placement of up to 150 Units of the Company (the "Units") at a price of CDN$10,000 per Unit (the "Offering Price") to raise gross proceeds of up to CDN$1,500,000 on a reasonable commercial best efforts basis (the "Offering").  Each Unit issued under the Offering will consist of one senior secured convertible debenture with a par value of CDN$10,000 (the "Debenture") and one common share purchase warrant (the "Warrant").  Each Warrant will entitle the holder to acquire up to 200,000 common shares of the Company ("Common Shares") at a price of CDN$0.05 per Common Share for a period of up to 36 months from the closing date of the Offering.

The Debentures will be direct and senior obligations of the Company secured by the common shares of Company's wholly-owned subsidiary Mohave Oil and Gas Corporation, which holds the Company's interest in seven oil and gas concessions in Portugal and, effective May 31, 2013, USD$130 million in tax pools.  The Debentures will bear interest at a rate of 8.00% per annum, payable quarterly in arrears, and will mature on November 30, 2016 (the "Maturity Date").

The Company, at its sole discretion, can elect to satisfy its interest commitments through payment in cash or, subject to regulatory approval, the issuance of Common Shares.  Subject to regulatory approval, Common Shares issued as payment for interest commitments will be issued at a price equal to the greater of CDN$0.05 per Common Share or a 10% discount to the market price of the Common Shares on the TSX Venture Exchange ("TSXV").

The Debentures will be convertible at the holder's option into Common Shares at any time prior to the close of business on the earlier of: (i) the business day immediately preceding the Maturity Date or (ii) if called for redemption, on the business day immediately preceding the date fixed for redemption, or (iii) if called for repurchase pursuant to a change of control, on the business day immediately preceding the payment date, at a conversion price of $0.05 per Common Share (the "Conversion Price") during the first year of their term (subject to adjustment in certain circumstances) and, thereafter, at the greater of $0.10 per Common Share or the market price of the Common Shares on the TSXV. The Debentures will not be redeemable before November 30, 2014. On or after November 30, 2014 but prior to the Maturity Date, the Debentures will be redeemable at the Company's option at par plus accrued and unpaid interest, provided that the volume weighted average trading price of the Common Shares on the TSXV during the 20 consecutive trading days, ending on the fifth trading day preceding the date on which notice of redemption is given, is not less than 200% of the Conversion Price.

Closing of the Offering is expected to occur on or about November 30, 2013, and may occur in one or more tranches. The Company has agreed to pay finders' fees of up to 6% cash to qualified persons in accordance with TSXV policies and the requirements of applicable securities laws.  The Company will use the proceeds from the Offering for working capital and general corporate purposes.  The financing is subject to regulatory approval including the satisfaction of customary conditions of the TSXV.

Strategic Alternative Review Process

In addition to the Offering, and as detailed in the Company's October 7, 2013 press release, the Company continues to fully evaluate a range of strategic alternatives available to it in order to preserve and maximize shareholder value. Porto will provide further updates on this process when the Board of Directors has approved a definitive transaction or strategic option, or as otherwise required by Porto's continuous disclosure requirements. The Corporation cautions that there are no certainties that the strategic review process will result in any transaction or, if a transaction is undertaken, as to its terms or timing.

Porto's common shares trade on the TSX Venture Exchange under the symbol PEC. Porto currently has 198,954,653 common shares outstanding.

About Porto Energy Corp.

Porto Energy Corp. is an international oil and gas company engaged in the exploration of crude oil and natural gas in Portugal, including the appraisal of a gas discovery.  Through its wholly owned subsidiary, Mohave Oil And Gas Corporation (a Texas corporation with branch offices in Portugal), the Company holds working interests in seven concessions in Portugal's Lusitanian Basin totaling 1.6 million net acres. Through its exploration efforts to date, the Company has identified seven major exploration trends over its concessions and generated more than 45 prospects and leads. Porto Energy's shares trade on the TSX Venture Exchange under the ticker symbol "PEC". For more information on Porto Energy visit www.portoenergy.com.

About Black Spruce Merchant Capital Corp.

Black Spruce is a private merchant banking firm focused on providing specialized financing and advisory services to the global energy industry. Our award-winning principals have a history of achieving success for clients based on high-level industry focus, strong industry relationships and innovative transaction skills. Offering advice in project, corporate and credit syndication; equity-linked financings; mergers and acquisitions; and strategic business development. For more information on Black Spruce visit: www.bsmc.ca

Cautionary Statements

This press release contains certain forward-looking statements. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements that are contained in this press release, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Porto Energy Corp.

For further information:

Heath Cleaver - Chief Financial Officer

Phone: 1-713-975-1725

Black Spruce Merchant Capital Corp.

Sonny Mottahed - CEO and Managing Partner

Phone:  1.403.351.1779

Email:  info@bsmc.ca

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