Rialto Plan for Gazelle Field Approved

Rialto Energy on Friday advised that approval of the Field Development Plan for the Gazelle Field located in CI-202 has been granted by the Government of Cote d’Ivoire in Abidjan. The FDP approval will allow the fast track development of the Gazelle Field resulting in production start-up in Fourth Quarter 2013 at initial oil rates of 8000 bopd and gas rates up to 100mmscfd.

The Gazelle Field Development will utilise a production platform in 40m water depth, where oil and gas production will be processed and exported via bundled pipelines to existing onshore infrastructure, located 30 km to the North-West of CI-202. Initial production from the Gazelle Field is anticipated at 8,000 bpd of oil and condensate and up to 100 mmcfd of gas; however, the pipelines will have capacities of up to 40,000 bopd and 230 mmcfd to allow for further infill drilling at Gazelle and tieback of existing satellite fields. The location of the Gazelle Field Facilities will allow it to become an important hub for low cost development of future discoveries within CI-202.

Consequent to the approval of the FDP, Rialto will be formally granted an Exclusive Exploitation Area over the Gazelle Field, which will cover an area of 58.5 km2 (see figure 1 below) and will be for a period of 25 years.

The Gazelle Field Development is the beginning of the monetization of the significant contingent and prospective oil and gas resources within CI-202.

Gas Memorandum of Understanding /“Protocole d’Accord”

The Memorandum of Understanding for gas sales (“MOU”) signed on 14 December 2011 stipulates the essential terms of a final, binding take or pay Gas Sales Agreement (“GSA”) which will be executed prior to Final Investment Decision (“FID”). FID is expected to occur in mid-2012 following completion of Rialto’s First and Second Quarter 2012 Drilling Programme.

The MOU provides the commercial terms for the delivery of gas quantities of up to 100mmscfd, based on a minimum 7 year production profile generated using the Mean Contingent Resources identified within the Gazelle Field. The Gazelle Field Development will help meet much needed in-country gas requirements at a price which provides Rialto with a robust return on investment.

First and Second Quarter Drilling Programme

The Gazelle Field Development will commence with the drilling of the first two development wells starting in February 2012 using the GSF Monitor jack-up rig. Additionally a third well will test the high impact Chouette prospect (80mmbbl Mean Prospective Resource). Rialto’s technical team are finalising the detailed evaluation and testing programmes for the three wells and will work with its joint venture partner, Petroci over the coming weeks to finalise the well proposals.

Jeff Schrull, Managing Director, commented:

“The Gazelle FDP approval and the execution of the Gas MOU are key milestones for the Company and we look forward to our active drilling programme in 2012. This will move us closer to our goal of becoming an established oil and gas producer with significant low risk growth potential. It is also very important to Rialto that this project will contribute to meeting the energy needs of Cote d’Ivoire.”