Rialto Energy Ltd has announced thatPetroci Holdings, the Government of Côte d’Ivoire state-owned oil and gas company, has elected to increase its paying interest in the Gazelle Field Exclusive Exploitation Area (“Gazelle Field EEA”) which is located within Block CI-202.
Petroci Holdings, which currently holds a 15% interest (comprising a 5% paying interest) in Block CI-202 has given notice that it will back-in for an additional 11% paying interest in the Gazelle Field EEA, bringing its total interest to 26% (comprising a 16% paying interest). Under the CI-202 PSC, Petroci Holdings may back-in for up to 11% at their election within four months of any EEA being granted.
“The fact that they have exercised their option for the maximum possible percentage, shows their commitment and faith in the Gazelle Field going forward,” Rialto said in a statement.
As a result of the back-in by Petroci Holdings, Rialto Energy’s interest in the Gazelle Field EEA will reduce to 74% (84% paying interest), whilst its interest in the remaining area of Block CI-202 outside of the Gazelle Field EEA will remain at 85% (95% paying interest).
Rialto was granted the Gazelle Field EEA in April 2012 and has the right to produce hydrocarbons from the Gazelle Field over a period of 25 years.
By exercising its right to increase its paying interest in the Gazelle Field EEA to 16%, Petroci Holdings will be required to reimburse Rialto within 6 months for an 11% share of all historic costs associated with the Gazelle Field since the awarding of Block CI-202. Rialto estimates that the total costs to be reimbursed until the back-in date will be around US$10 million. From the point of that back-in date, Petroci Holdings will pay its 16% share of the future costs associated with the Gazelle Field EEA.
Commenting on Petroci Holdings’ back-in to the Gazelle Field EEA, Rialto Energy Managing Director Jeff Schrull said “We are very pleased that Petroci Holdings, our joint venture partner, has shown significant confidence in the proposed Gazelle Field and the work Rialto is doing to progress its development. Petroci has obviously an in-depth knowledge of the hydrocarbon potential of our block and their back-in is a positive sign consistent with the Government’s desire to progress the Gazelle gas development through commercial sanction and into production in a timely manner”.
[mappress] Press Release, August 30, 2012