Block CI-202, Côte d Ivoire:

Transcription

1 Block CI202, Côte d Ivoire: Gazelle P3 Appraisal/Development well commenced on 12 March First well of a three well programme which includes the highimpact Chouette exploration well (84mmbo gross mean prospective resource). Successful capital raising and share purchase plan completed. Along with finalisation of investment by the International Finance Corporation, a member of the World Bank Group, sees Rialto fully funded for its current drilling programme. Processing and interpretation of fullfold 3D seismic acquired during 1 st Quarter 2012 is providing a more complete understanding of existing discoveries in CI202 and revealing several high quality exploration prospects and leads for future drilling. Rialto successfully listed on the London AIM market in April WA399P, Western Australia: Processing and interpretation of 3D seismic data acquired during 2011 by the Operator, Apache Energy, continues in order to high grade drilling targets.

2 It gives me great pleasure as Managing Director of Rialto Energy Limited (Rialto or the Company) to provide an update on the Company s activities. The 1 st Quarter of 2012 has been exciting for Rialto with the following key milestones achieved: The Company raised AUS$86.4 million to fully fund a three well drilling programme in Block CI202. This funding was achieved through: An oversubscribed Private Share Placement Funding agreement reached with the International Finance Corporation An oversubscribed Shareholder Share Purchase Plan The CI202 drilling programme commenced with the Gazelle P3 development/appraisal well in the Gazelle Field on 12 March This well will be followed by the Gazelle P4 development/appraisal well and finally the high impact Chouette exploration well. A fast track cube of the Blockwide 3D seismic acquisition, which was acquired over CI202 in December, was received and is being mapped to impact the current drilling programme and also mature existing and newly identified prospects. Final processing work will complete in 3 rd Quarter Continued successful work with our Joint Venture partner, Petroci, on subsurface technical work to finalise the Gazelle P3 well location and testing objectives. Petroci continue to demonstrate high calibre technical capability and input. Full mobilisation of drilling staff and equipment to Abidjan, Côte d Ivoire for the commencement of drilling. Issued tenders for the FEED Engineering work for the Gazelle Development. In WA399P, Western Australia, the Operator, Apache Energy Limited, is evaluating a newly processed 3D seismic survey over the permit and we look forward to working with the joint venture participants to identify a suitable location for an exploration well to be drilled

3 The approval of the Field Development Plan (FDP) at the Gazelle Field during the 4 th Quarter 2011 paved the way for the drilling of two appraisal /development wells in this field. The first of these, the Gazelle P3 well, was spudded on 12 March 2012 and drilled to 1070m before mechanical problems with the rig led to the drill string becoming stuck. The mechanical problems were rectified and the well was sidetracked. The Gazelle P3 well is now drilling ahead to TD as planned. Once the Gazelle P3 well is drilled, logged and flow tested, a template will be installed and the rig will skid to another slot to drill, log and flow test the Gazelle P4 well. These two wells are key to reaching our goal of project sanction and final investment decision (FID) for Gazelle during The template will allow Rialto to use these two wells as future production wells. The new 3D is being used to finalize the location and objectives of the third well which, pending final approvals, will test the exciting Chouette prospect (84mmbo and 42 bcf gross mean prospective resource). Rialto s prospective oil and gas resources (gross mean resources of 511 mmbbls and 1.8 Tcf as certified by the September 2011 Competent Person s Report) show that CI202 has the ability to add significant contingent resources through exploration drilling. The Company is currently working to finalize plans for further high impact exploration and appraisal drilling for 1 st Quarter 2013, with the recently acquired fullfold 3D seismic already beginning to yield several exciting prospects and leads, as well as providing a deeper understanding of those already identified. The Company s goal is first production from CI202 by the end 2013/early production milestone will be pursued by meeting the following 2 nd Quarter 2012 targets: The first Completion of the drilling, logging and flow testing of the Gazelle P3 well and Gazelle P4 appraisal/development wells Receipt of all approvals and permits required for the Gazelle P4 well and Chouette exploration well, both to be drilled as part of the current programme Award of the FEED Contract and commencement of the engineering work for the Gazelle Development Blockwide mapping of the new 3D seismic fast track processed data to mature exploration portfolio and provide input for the Gazelle full field earth model

4 The Company continues to develop a 5 year plan for future growth in oil and gas production in CI202 through incremental development of additional reserves that will come from further appraisal and exploration drilling. The Company s commitment to its goal of long term reserve growth in CI202 is evidenced by our recently acquired blockwide 3D seismic survey. The 2 nd and 3 rd Quarters of 2012 will be a busy and challenging time for Rialto as we continue our drilling operations in CI202 and prepare to meet our goal of FID for the Gazelle Development. We will continue to work with Petroci and the DGH to ensure our exploration and development operations provide a commercial and strategic fit that benefits both the people of Côte d Ivoire and also the shareholders of our Company. Jeff Schrull

5 Block CI202, offshore Côte d Ivoire comprises an area of 675km 2 and contains four significant under appraised oil and gas discoveries; Gazelle, Hippo 1, Bubale, and Addax, all located in water depths of 50 to 100 metres. These discoveries are assessed to have gross mean contingent resources totalling 50 mmbbls of liquids and 396 Bcf of gas. Rialto is moving to develop and commercialise the Gazelle field later this year. In addition to the development opportunities which exist within CI202, the Company has identified an exciting inventory of exploration prospects and leads which will be the subject of future drilling. This inventory currently contains an independently verified gross mean prospective resource of 511mmbbls of liquids and 1.8Tcf of gas. The Gazelle Field is located in shallow water depths which lie in close proximity to existing onshore production infrastructure where production will be processed and transported to shore via bundled pipelines. The drilling of two development wells marked the commencement of the development activities at Gazelle. Phase 1 production from the Gazelle Field is planned for the 4 th Quarter 2013/ 1 st Quarter 2014 at 8,000 bpd of liquids and 100 mmcfd for gas.

6 To facilitate commercialisation of Gazelle s gas resources, the Company executed, in December 2011, a Gas Sales MOU with the Government of the Republic of Côte d Ivoire. The Gas Sales MOU contains the essential terms for a final, binding gas sales agreement for deliveries of gas of up to 100 mmcfd. A final gas sales agreement is expected to be executed ahead of FID for the Gazelle Field in the 2 nd Quarter of During the Quarter, approval for a Front End Engineering Design (FEED) bid list was given by Petroci and tenders were submitted. Several bids were received and Rialto is evaluating these with the award of the contract expected shortly. Completion of the FEED work is expected at the end of July. The formal decree for the award of the 25 year Exploitation Area over Gazelle is expected in May The first of the Gazelle Development wells, Gazelle P3 was spudded on 12 March Mechanical issues with mud pumps and other rig equipment resulted in the drilling pipe being stuck on 26 th March. The rig issues were rectified and the well sidetracked. Drilling continues with TD expected in the first weeks of June Rialto is planning a second phase of drilling in CI202 for 1 st Quarter The Company is in discussions regarding a rig that is currently under contract with another operator incountry for this programme. A blockwide, 891km 2 3D seismic acquisition was completed by Polarcus in midjanuary. Processing and interpretation of the newly acquired data have commenced. Initial fast track volumes are very encouraging. This data will initially assist in placing the Chouette exploration well; the third well of the current drilling campaign. Further, this data will provide greater understanding of existing discoveries in CI202 and help firm up potential high impact exploration targets which will be the subject of drilling in both the near and longterm.

7 The Company submitted formal notification to the DGH of its intention to enter into the next exploration period in CI202. Given the timing of the expiry of the first period on 10 May 2012, the Ministry has granted approval to drill two exploration wells in the second exploration period. The Chouette well, which is planned directly after the Gazelle development wells, will be the first of these commitment wells. The second commitment well should be drilled by November Additionally given the recent 3D acquisition, the Ministry have given Rialto leave to delay the 25% relinquishment required at the end of the first exploration period. This will be done by the end of October 2012, once the 3D data has been interpreted. During February 2012, and ahead of commencement of drilling operations, Rialto undertook public consultation with relevant local stakeholders. The objective of this process was to introduce the company and provide the communities with information on its proposed project activities in CI202. Rialto engaged with the village chiefs at Adiake and Tiapoum to obtain blessings of the ancestors prior to commencement of our drilling activities. These activities were well received in the local communities and established important relationships between Rialto and local stakeholders. Rialto s goal is to complete all operations it undertakes with a total recordable injury frequency rate of zero. As of March 31, 2012, the operation to date was 36 LTI free days.

8 Pursuant to its agreements with CMI, the Company has the right to acquire an 18% equity interest in the Offshore Accra Contract Area (Accra Block). This acquisition is subject to obtaining the approval of GNPC, the Ministry of Energy of the Republic of Ghana and the joint venture participants in the Accra Block. Joint venture participant approval has been granted and Rialto is currently working with CMI to obtain the requisite Government approvals necessary for entry. This process has taken considerably longer than anticipated. It should be noted that there is no certainty of approvals being granted and the assignment occurring, and the Government is under no obligation to grant such approvals. The Accra Block covers an area of 2,000km 2 and is located to the southeast of Accra, the capital of the Republic of Ghana, in water depths ranging from less than 50 metres to greater than 2,500 metres. The Operator of the block, Tap Oil Limited, has identified several structures on the existing 3D seismic data in shallow to moderate water depths, each of which speculatively could have potential to contain in excess of 100 million barrels of prospective resource. Deepwater leads similar to the recent Jubilee discovery will be the subject of the interpretation of the recently acquired 3D seismic survey to confirm and mature them into prospects for drilling. The WA399P exploration permit is situated offshore Western Australia within the Carnarvon Basin. The block is adjacent to the Pyrenees Oil Development, a joint venture between BHP Billiton and Apache PVG Pty Ltd, which commenced oil production in February Nearby, there are several producing oil fields including Enfield and Vincent/Van Gogh, as well as the Macedon gas field, currently under development, and a number of other gas and oil discoveries. During the Quarter, Apache Northwest Pty Ltd delivered a fasttrack seismic volume which has been reviewed by Rialto. A prospect has been defined that is similar in style to the neighbouring Macedon Field, but further prospectivity will depend on mapping and amplitude supported interpretation that can only be performed on the fully processed data. This is due to be delivered midapril On September 7, 2011, the permit commenced with the Secondary Work Programme and is currently in Year 4. The Year 4 committed work programme requires geotechnical studies only. The joint venture comprises Apache Northwest Pty Ltd 60% (Operator), Rialto Energy 12%, Jacka Resources 15%, and Carnarvon Petroleum 13%.

9 Rialto continues to evaluate international exploration, production and field development opportunities in its key focus area of West Africa, including possible strategic partnerships and alliances which could enhance our ability to expand our portfolio. Rialto listed in the Alternative Investment Market of the London Stock Exchange (AIM) on 12 April No funds were raised as part of this process. The Company has appointed RBC Capital Markets as its Nominated Adviser and Joint Broker and GMP Securities Europe as its Joint Broker. The Company views the AIM listing as an important part of its corporate development and views the AIM market as having large scale potential to broaden Rialto s investor reach and leverage the substantial interest and understanding shown by UK and European investors in companies with similar operations. Following the resignation of Mr. Glenn Whiddon, NonExecutive Director of Rialto, Mr. Neil Hackett, who is a qualified ASX/200 Company Secretary with over 20 years experience in resources, diversified industrials and financial services, has been appointed as a Non Executive Director of Rialto. Neil Hackett s appointment ensures compliance with Australian legal requirements and he will act as NonExecutive Director whilst the Company continues its search for a suitable replacement. Mr. Hackett is presently Joint Company Secretary to Rialto and holds a Bachelor of Economics from the University of Western Australia, is an Affiliate of the Institute of Chartered Secretaries of Australia and a Fellow of the Financial Services Institute of Australia. He is currently Company Secretary of two Australian Stock Exchange listed companies; Ampella Mining Ltd and Modun Resources Ltd, and Non Executive Director of TPL Corporation Ltd. Mr. Hackett is also on the Board of two unlisted companies, Steel Blue Pty Ltd and WestCycle Inc. Mr. Chaim Lebovits resigned as a NonExecutive Director of the Company on 5 April 2012.

10 During the quarter Rialto made the following equity issues: Share placement tranche I: 55,250,000 Ordinary Shares were issued at 30 cents per share raising $16,575,000 and allotted on 2 February Share placement tranche II: 144,750,000 Ordinary Shares were issued at 30 cents per share raising $43, and allotted on 8 March Under a Share Purchase Plan 24,303,960 Ordinary Shares were issued at 30 cents per share raising $7,291,188 and allotted on 22 February ,500,000 Ordinary Shares were issued on conversion of Performance Shares relating to the commencement of the first well in CI202 as approved by shareholders in General Meeting on 27 May The shares were issued on 20 March ,000,000 Ordinary Shares were issued to employees pursuant to the terms of their employment contracts. 500,000 ordinary shares were issued upon the conversion of unlisted options exercisable at 35 cents raising $175,000. 1,000,000 Performance Rights and 750,000 Options were issued to new employees of the Company pursuant to the Rialto Energy Limited Performance Rights Plan and the Rialto Energy Limited Directors, Employees and Consultants Option Plan.

11 Number Shares 618,310,224 Performance Shares 15,000,000 Unlisted Options 40,384,999 Cash on hand at 31 March 2012 was $86.6 million. Number Percentage International Finance Corporation (IFC) 63,707, % JP Morgan Chase & Co and its affiliates 51,930, % Glenn Ross Whiddon 46,842, % BlackRock Investment Management (Australia) Limited and associated entities (Blackrock Group) 42,684, % Med Alpha 30,748, % Colonial First State Global Resources 29,151, % Chaim Lebovits 24,146, % Contact details: Mr. Jeff Schrull Managing Director Tel: (+61 8)

12 Appendix 5B Mining exploration entity quarterly report Appendix 5B Rule 5.3 Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10 Name of entity Rialto Energy Limited ABN Quarter ended ( current quarter ) March 2012 Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors Payments for (a) exploration & evaluation 1.2 (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Current quarter $A 000 (21,145) (1,383) Year to date (9 months) $A 000 (33,444) (4,327) Net Operating Cash Flows (22,395) (37,265) Cash flows related to investing activities Payment for purchases of: (a) prospects 1.8 (b)equity investments (c) other fixed assets (75) (368) Proceeds from sale of: (a) prospects 1.9 (b) equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities Other (provide details if material) 1.12 Payment of final holdback in relation to the 75% acquisition of C+LNR (76) 1.13 Net investing cash flows Total operating and investing cash flows (carried forward) (75) (444) (22,470) (37,709) + See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1

13 Appendix 5B Mining exploration entity quarterly report 1.13 Total operating and investing cash flows (brought forward) (22,470) (37,709) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 64,267 64, Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) (21) Net financing cash flows 64,267 64,246 Net increase (decrease) in cash held 41,797 26, Cash at beginning of quarter/year to date 44,367 59, Exchange rate adjustments to item Cash at end of quarter 86,576 86,576 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities Current quarter $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions Item 1.23 includes aggregate amounts paid to directors including salaries, directors fees and consulting fees Noncash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest N/A Financing facilities available Add notes as necessary for an understanding of the position. 3.1 Loan facilities 3.2 Credit standby arrangements Amount available $A 000 Amount used $A See chapter 19 for defined terms. Appendix 5B Page 2 17/12/2010

14 Appendix 5B Mining exploration entity quarterly report Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration $A ,433 2,133 Total 55,566 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter $A 000 Previous quarter $A Cash on hand and at bank 40,311 5, Deposits at call 46,220 39, Bank overdraft 5.4 Other (provide details) Term Deposit Total: cash at end of quarter (item 1.22) 86,576 44,367 Changes in interests in mining tenements 6.1 Interests in mining tenements relinquished, reduced or lapsed Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter 6.2 Interests in mining tenements acquired or increased + See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 3

15 Appendix 5B Mining exploration entity quarterly report Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. 7.1 Performance shares When performance hurdles met 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities 7.4 Changes during quarter (a) Increases through issues Total number Number quoted Issue price per security (see note 3) (cents) 15,000,000 Tranche 1 Consideration for the acquisition of CLNR Holdings Amount paid up per security (see note 3) (cents) 618,310, ,640,124 Fully Paid 55,250,000 24,303, ,750, ,000 55,250,000 24,303, ,750, ,000 $0.30 $0.30 $0.30 $0.35 Fully Paid Fully Paid Fully Paid Fully Paid 17,500,000 6,829,900 Consideration for the acquisition of C+L Natural Resources Fully Paid 1,000,000 1,000,000 Conversion of employee performance rights vested Fully Paid (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted + See chapter 19 for defined terms. Appendix 5B Page 4 17/12/2010

16 Appendix 5B Mining exploration entity quarterly report 7.7 Options(description and conversion factor) Unlisted (4) Unlisted (5) Unlisted (6) Unlisted (7) Unlisted (8) Unlisted (9) Unlisted (10) Unlisted (11) Unlisted (12) Unlisted (13) Unlisted (14) Unlisted (15) Unlisted (16) Unlisted (17) Unlisted (18) Unlisted (19) Unlisted (20) Unlisted (21) Unlisted (22) Unlisted (23) Unlisted (24) Unlisted (25) Unlisted (26) Unlisted (27) Unlisted (28) Unlisted (29) Unlisted (30) Unlisted (31) Unlisted (32) Unlisted (33) 3,560, , , , , ,000 2,600,000 2,025, , , , ,000 2,900, ,000 9,900, , , , , , , , , , ,666 1,250,000 1,250,000 1,000,000 4,050, ,000 Exercise price $0.40 $0.45 $0.70 $0.55 $0.45 $0.25 $0.50 $0.70 $0.70 $0.40 $0.25 $0.40 $0.40 $0.80 $0.80 $0.80 $0.80 $.0.60 $0.43 $0.63 Expiry date 30 June July October September January March May May July September March July June June July June June June June January January May May August August December December August December February Issued during quarter Unlisted (33) 750,000 $ February Exercised during quarter Unlisted (3) 500,000 $ March Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) + See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 5

17 Appendix 5B Mining exploration entity quarterly report Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5). 2 This statement does give a true and fair view of the matters disclosed. Sign here:... Date: 30 April 2012 (Managing Director) Print name: Jeffrey Schrull Notes 1 The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and Issued and quoted securities: The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == + See chapter 19 for defined terms. Appendix 5B Page 6 17/12/2010