To Sidetrack or Not to Sidetrack in Cote d’Ivoire

Rialto Energy that the Gazelle-P3 ST well offshore Cote d’Ivoire on CI-202 had encountered all expected reservoirs of the Gazelle Field, as well as a new exploration objective.

The Upper Cenomanian sands were drilled to appraise the extent of potential upside of the Gazelle oil and gas accumulation. Based on preliminary log interpretation, the UC1 reservoir is poorly developed at this location. In addition, the Gazelle-P3 ST well encountered a well-developed UC3 reservoir, which recovered oil and gas at the previous non-Rialto operated IVCO 14well on Block CI-202.

Rialtosaid that it is reviewing operational options, including a possible side-track to relocate the development well at a location where it will be suspended as a producer. A secondary objective of the possible side-track would be to further appraise and, depending on results, potentially test and suspend the UC3 reservoir.

The Lower Cenomanian, one of the primary gas reservoirs in the Gazelle Field, was found to be gas bearing in Gazelle-P3 ST where it was encountered 200 meters deeper than the lowest known gas from the earlier IVCO 21well on Block CI-202. Two high quality PVT samples were taken for use in the Gazelle FEED study. This extension in the proven hydrocarbon column will be incorporated in a revised update of the CPR.

The company also reported that the Condor exploration prospect was encountered with good gas shows; however, preliminary log results indicated a low permeability gas reservoir at this location. The Gazelle-P3 ST well trajectory was planned to intersect a number of targets and as a result only the edge of the potentially large Condor trap was intersected. CMR results combined with a pressure measurement demonstrate this prospect is in a similar high pressure gas regime to existing proven Lower Cenomanian reservoirs. This result considerably de-risks the trap associated with the greater Condor Prospect and it is anticipated that a follow up well to fully evaluate the prospect (750 Bcf Gross Mean Prospective Resource) will likely be drilled as part of Rialto’s next phase drilling program currently being planned for early-mid 2013.

On the new exploration objective encountered, Rialto said that a 75 meter gross reservoir package of high quality sand was encountered at the base of the Gazelle-P3 ST. Drill cuttings exhibited shows and the logs indicated the sands to be water bearing with possible residual oil saturations. This sand represents an exciting new exploration target and the recently acquired 3D data will be used to identify new drillable impact prospects in the Gazelle/Condor Area with a view to future exploration activity.

The company will now decide as to if it will drill a side track to the Gazelle-P3 ST well to further appraise the UC1 and UC3 reservoirs for a more optimal development location. Once the drilling at Gazelle P-3 ST well (or side-track) is complete, a six well template will be set on the seafloor prior to spudding the Gazelle P-4 well. The Chouette exploration wellwill then be drilled following completion of the Gazelle P-4 well.