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Monday, November 11, 2013
Rialto Energy completed the previously announced transaction with Vitol E&P and signed a new PSC with the government of Cote d’Ivoire and state-run Petroci replacing the previous PSC for CI-202. The new PSC for the block amended the terms under the previous PSC.
The new PSC will have three consecutive exploration periods over a total of seven years from signature. It also states that substantially all petroleum costs incurred to-date by Rialto on Block CI-202 will be carried over for recovery in the new PSC, and all remaining liabilities under the previous PSC have been deemed satisfied upon award of the new agreement.
Rialto said that once the Field Development Plan for the development of Gazelle was approved by the ministry, a new Exclusive Exploitation Authorization will be issued to replace the existing one. Negotiations have recommenced with CI-Energies, the state owned electricity company, regarding a future gas sales agreement from the field.
The signature of the new PSC fulfils the major condition precedent to the completion of the transaction with Vitol announced earlier this year. 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 $50 million of loan capital to be invested in a to be agreed upon Block CI-202 work program.
The Vitol loan will fund the first $50 million of the Gazelle Field development work program (but excluding any exploration commitments which will be funded pro-rata by Rialto and Vitol). The transaction formalizes the partnership with Vitol.
Under the terms of the transaction, Vitol has acquired 65% of the shares in Rialto CdI (which held an 85% interest in the Block CI-202 PSC and a 74% interest in the Gazelle EEA which was granted in April 2012). Following completion of the transaction, Rialto CdI now holds an 87% participating interest in the new Block CI-202 PSC and will hold a 71% participating interest in the new Gazelle EEA, once granted, on the assumption that Petroci exercises its back-in rights. Rialto CdI remains the operator of the Block.
Rob Shepherd, MD of Rialto Energy, commented: “The signing of this PSC is a significant milestone for the Company and is testament to the joint efforts of Rialto and Vitol as well as the pragmatic and professional approach of the Director General of Hydrocarbons from the Ministry.
“Both the completion of the Vitol Transaction and the signing of the new PSC remove the uncertainty, time constraints and financial obligations that were putting Rialto under significant pressure under the terms of the previous PSC and will enable us, along with our partners Vitol and Petroci, to fully focus on the exciting development and exploration potential within the CI-202 block and beyond.
“We are pleased to have completed the transaction with Vitol, with whom we have already established a highly productive working relationship, and both companies look forward to playing a key role in Cote d’Ivoire’s growing energy story.”
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