Ivory Coast PSC and Conf Call8 Nov 2013 07:24
Rialto Energy Ltd
("Rialto" or the "Company")
Rialto completes transaction with Vitol and signs new PSC for Block CI-202 in Cote d'Ivoire
Rialto (ASX/AIM: RIA) is pleased to announce that its subsidiary Rialto Energy (Cote d'Ivoire) Ltd ("Rialto CdI") has completed the previously announced transaction with Vitol E&P ("Vitol") and also signed a new Production Sharing Contract ("PSC") for Block CI-202, offshore Cote d'Ivoire, replacing the previous PSC.
Signing of new PSC
As announced on 16 September 2013, Rialto already had in place a Memorandum of Understanding ("MoU") with the Cote d'Ivoire Ministry of Petroleum & Energy (the "Ministry"), the state owned oil & gas company PETROCI and Vitol to replace the existing PSC for Block CI-202 with a new PSC on amended terms.
The signing of the new PSC took place in Abidjan on 7 November 2013 and was signed by the Minister of Petroleum and Energy for the Republic of Cote d'Ivoire. As is customary with most PSCs, the details of the contract are largely confidential but the key elements of the new PSC are in line with those disclosed in the MoU and are detailed below:
1) The new PSC will have 3 consecutive exploration periods over a total of 7 years from signature;
2) Substantially all petroleum costs incurred to-date by Rialto on Block CI-202 will be carried over for recovery in the new PSC;
3) All remaining liabilities under the previous PSC have been deemed satisfied upon award of the new agreement;
4) Once the Field Development Plan for the development of Gazelle is approved by the Ministry, a new Exclusive Exploitation Authorisation ("EEA") will be issued to replace the existing one;
5) Negotiations have recommenced with CI-Energies, the state owned electricity company, regarding a future gas sales agreement;
6) The Ministry has ratified the entry of Vitol into partnership with Rialto.
Completion of Vitol Transaction
The signature of a new PSC fulfils the major condition precedent to the completion of the transaction with Vitol announced on 23 April 2013.The Company is pleased to announce that it has subsequently completed the transaction in which Vitol has acquired 65% of the shares in Rialto CdI in exchange for providing US$50 million of loan capital to be invested in a to be agreed Block CI-202 work programme.
The Vitol loan will fund the first US$ 50 million of the Gazelle Field development work programme (but excluding any exploration commitments which will be funded pro-rata by Rialto and Vitol). The transaction formalises the partnership with Vitol, a company with substantial financial and technical capability, with existing assets in Rialto's area of operations in Côte d'Ivoire and Ghana and a proven track record of monetising upstream assets in West Africa.
Under the terms of the transaction, Vitol has acquired 65% of the shares in Rialto Cd
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