Rio Alto to Close Sale of Ecuador Assets on March 31

Canadian oil company Rio Alto International expects to close the sale of its Ecuadorian interests for Cdn$9.3mn (US$7.1mn) on March 31 as part of its strategic plan to divest all its assets, a spokesperson for the company advising on the sale, Waterous, told BNamericas.

The sale is pending "certain closing issues" which Rio Alto's lawyers expect to resolve by the Wednesday, said the spokesperson, who would not disclose the name of the buyer.

Rio Alto announced that it had reached an agreement with the purchaser on February 23 and recorded a corresponding 2003 year-end book loss of Cdn$30.5mn, the company said in a statement.

Rio Alto currently produces about 3,200 barrels a day (b/d) of crude oil from the Tiguino block in southeast Ecuador. The block has three producing wells. The company is selling all its assets in western Canada, Ecuador and Argentina.

Waterous began a road show in Calgary, Houston and Buenos Aires during the week March 22-26 to promote the sale of the company's Argentine subsidiary Petrolera Rio Alto, the spokesperson said. "There hasn't been much in terms of relevant assets available for acquisition in Argentina for over 18 months, so interest is very high," the Waterous official said.

Bids are due on April 29 and Rio Alto expects to close the sale in May, the spokesperson said.

Existing players in Argentina and other companies not currently in the country have indicated their interest. The spokesperson would not say how much the Argentine subsidiary is worth, but that it would be several times more than the deal for Rio Alto's Ecuadorian assets.

Petrolera Rio Alto owns and operates the Bella Vista Oeste production block in the San Jorge basin and has exploration licenses for three other blocks: Cañadon Pilar, Pico Salamanca and Mina Salamanca. Rio Alto has implemented a successful waterflood project in the southern part of Bella Vista, which increased the block's production to 2,150b/d from 1,400b/d, the spokesperson said. Another waterflood project is planned this year for the northern part of the block. Bella Vista currently has 52 producing wells.

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