Rialto Energy Limited has entered into a binding Heads of Agreement whereby Rialto will acquire 100% of CLNR Holdings Limited (CLNR) which is to hold a 75% interest in C & L Natural Resources Limited (C & L Natural).
p>Rialto Energy Limited has entered into a binding Heads of Agreement whereby Rialto will acquire 100% of CLNR Holdings Limited (CLNR) which is to hold a 75% interest in C & L Natural Resources Limited (C & L Natural).
C & L Natural is the holder of an 85% participating interest in Block CI-202. The balance of 15% in Block CI-202 is held by the Cote d'Ivoire State petroleum company, Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (Petroci).
CI-202 is a highly prospective petroleum exploration licence that contains multiple pre-existing unappraised oil and gas discoveries. CI-202 has the following attributes:
• 13 wells drilled between 1977 and 2001 predominately on vintage 2D seismic data;
• 12 wells intersected hydrocarbons;
• test rates of 2,280 bopd and 37 mmscfd achieved post 435 km2 of high quality 3D seismic data; and
• the licence is located in shallow water and close to existing oil and gas markets.
CI-202 is located 80km to the west of the giant Jubilee offshore discovery made in Ghana in 2007 (1.8 billion barrels oil reserves), and the subsequent Tweneboa (>250 million barrels oil equivalent reserves) and Odum (120 million barrels oil reserves) discoveries, which have established the Ivorian Basin, located in the West African Transform Margin, as one of the most promising emerging offshore petroleum provinces in the world.
The proximity of the Ghanaian discoveries, located in the same basin, has significantly re-rated the potential size of the existing discoveries within CI-202 and the exploration upside of stratigraphic traps.
As part of the acquisition, Rialto will appoint new directors to complement the existing directors and management team.
The proposed transaction will be subject to various conditions precedent including approval of the shareholders of Rialto, raising sufficient capital to fund the acquisition, CLNR completing its acquisition of a 75% interest in C & L Natural and execution of final documentation. The transaction also requires the consent of the Government of the Republic of Cote d'Ivoire to the change of control of C & L Natural and confirmation to the satisfaction of Rialto, that the minimum work obligation under the Block CI-202 production sharing contract is a single exploration well. Formal application for the change of control consent has been lodged and a determination is expected from the Government of Cote d'Ivoire within 60 days.
A capital raising totalling approximately A$16 million will be undertaken by Rialto to fund the acquisition and to provide ongoing working capital to fund C & L Natural's work programme and Rialto's existing work programmes. Rialto intends to offer existing shareholders the opportunity to participate in a share purchase plan following completion of the transaction.
