Rialto Energy, the dual-listed Australian oil and gas explorer, has secured Vitol E&P as a partner in West Africa.
Subject to regulatory and joint venture partner approval, Vitol will acquire a 20% interest in Rialto Energy (Ghana) Limited in exchange for providing a facility to cover Rialto's $7.7m obligations for the drilling of the Starfish-1 exploration well in the Accra Block, Ghana, which is due to spud in June 2013.
In addition, the group said that Vitol would acquire 65% of the shares in Rialto Energy (Cte d'Ivoire) Limited in exchange for providing $50m of capital to be invested in a work programme which was to be agreed and subject to certain conditions.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The company added that the agreement delivered access to a "significant potential future source of capital" for investment in Block CI-202 and said that the deal allowed Rialto to work with Vitol and the Government of Cte d'Ivoire to pursue a potential multi-asset, shallow water gas development strategy for the discovered resources in both Block CI-202 and neighbouring blocks.
Rob Shepherd, Managing Director of Rialto, commented: "We are very pleased to announce the transaction with Vitol, which in our view provides the company and its shareholders with a solid basis from which we can move forward out of a period of uncertainty and look to build an exciting business in Cte d'Ivoire and Ghana."
He added: "Vitol is a strong partner with significant experience in both of these countries and we believe the transaction validates the potential opportunity offered by our assets in West Africa. We also acknowledge the support of Rialto's main shareholder, the International Finance Corporation, part of the World Bank Group."
Rialto Energy's share price was up 29.50% to 4.50p at 10:28 on Tuesday.
MF
