Rialto Energy Limited announced that it has received Ministerial and Ghana National Petroleum Corporation (GNPC) approval to acquire a 12.5% participating interest in the Offshore Accra Contract Area, Ghana, West Africa (the "Accra Block").
The Company is acquiring its interest alongside fellow new entrants Ophir Ghana (Accra) Limited ("Ophir", 20%) and Vitol Upstream (Accra) Limited (30%), joining existing partners Afex Oil (Ghana) Limited (20%) and Tap Oil (Ghana) Limited ("Tap", 17.5%, current operator), together the "Contractor Group". As part of the transaction, operatorship is transferring from Tap to Ophir.
The Accra Block contains a number of prospects, including Starfish, a large, deep-water prospect, which according to the current operator is analogous to the Jubilee discovery with unrisked prospective resources estimated to be in the range of half a billion barrels (431 MMbbls (P50); 665 MMbbls (PMean)). The prospect is recommended for drilling in 2013. Further details of the Accra Block are summarized below.
To complete the acquisition of its interest, Rialto is required to pay its 12.5% proportional share of past costs, which amounts to a net payment of around $3 million, and provide a bank guarantee in respect of its participating interest share of the approved work program and budget for the current Exploration Period.
Overview of Accra Block
The Accra Block is located to the southeast of Accra, the capital of the Republic of Ghana, in water depths ranging from less than 164 feet (50 meters) to greater than 8,202 feet (2,500 meters).
3D seismic was acquired over the deep-water portion of the Accra Block in 2011 and processing of this data was completed during the second quarter of 2012. Interpretation of this new seismic data, in conjunction with previously existing and reprocessed 3D has identified a number of prospects within the pre and post-rift Cretaceous section. Some of these prospects are a similar play type to the Jubilee discovery, which is located in the adjacent and analogous basin which also forms part of the West African Transform Margin. The combined un-risked P50 prospective resource of the prospects within the pre and post-rift Cretaceous section has been assessed by the current operator of the Accra Block to be greater than three billion barrels.
Accra Block Commitments
The Initial Exploration Period expires on 23 September 2013, with the requirement that an exploration well be drilled by this time. Rialto's net share of the 2013 exploration well cost is estimated to be around $10 million.
The other commitments associated with the Initial Exploration Period, including acquisition of 2D seismic, have been satisfied. Additionally, the 3D survey acquired in the Initial Exploration Period has met the corresponding commitment in the First Extension Period.
Rialto Energy's Interim CEO, Rob Shepherd, said the Company was pleased to obtain approval for its interest in the Accra Block and grow its West African exploration portfolio outside of Cote d'Ivoire.
"This is a high profile exploration area located in the vicinity of some major recent discoveries.
"With 3D seismic acquired over the area in 2011 and a number of high profile leads identified, we now look forward to working closely with our new joint venture partners to progress the exploration program on this block."
The prospective resource information in this report is based on information compiled by the current operator and has been reviewed on behalf of Rialto by Simon Barkham B.Sc (Hons), M.Sc, D.Phil, who has consented to the inclusion of such information in this report in the form and context in which it appears. Dr. Barkham is a full-time employee of the Company, with more than 20 years' relevant experience in the petroleum industry.
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