Rialto Energy Completes Testing of Gazelle-P3 ST Well

Rialto is pleased to announce the completion of drill stem testing (DST) of the Gazelle-P3 ST2 well (ST2 well), achieving maximum flow rates of 19.5mmscfd gas and an unstabilised rate of 760 bopd from separate sands within the Upper Cenomanian (UC-1) reservoir. The maximum gas flow rate was constrained due to downhole equipment limitations. The estimated deliverability of the reservoir with standard 4.5” production tubing rather than the 3.5” test string is 33mmscfd.

The main DST focused on the Upper Cenomanian (UC-1C) gas reservoir (over the interval 2632.9-2666.6 mMDRT), successfully achieving an average flow rate during a ten hour period of 17.5 mmscfd gas through a 44/64” choke, with a flowing wellhead pressure of 1470 psia. Prior to undertaking the oil test, cement bond logs indicated that the zones may not be hydraulically isolated in the well bore. As a result, the UC-1A oil reservoir (perforated over the interval 2678.0-2713.2 mMDRT) achieved an unstabillised flow rate of 760 bopd before gas, originating from the overlying gas reservoir via behind-casing channelling, prevented further oil flow from this interval.

Gazelle-P3 Summary

The Gazelle-P3 ST1 directional well (ST1 well) penetrated the UC-1 reservoirs 800metres from the existing IVCO-14 discovery well and also appraised the Gazelle primary gas reservoir (LC-2). The well also successfully penetrated a down-dip portion of the high impact (750 BCF) Condor prospect. The ST2 well was then drilled to further appraise and test the UC-1 reservoirs closer to the IVCO-14 well. The ST1 and ST2 wells are located on Block CI-202, with ST1 well and ST2 well drilled to total depths of 3685mRT and 2979mRT respectively. Both the ST1 well and ST2 well have achieved a number of exploration, appraisal and development objectives, as outlined below:

1. Significant reduction of the geological risk of the greater Condor prospect (750 BCF mean prospective resource) due to the thickening of the interval up-dip to the North where reservoir quality is predicted to improve. The ST1 well drilled a portion of the Condor Prospect (LC-5) and discovered gas in a thick, low permeability reservoir. A Condor appraisal well is one of several high impact candidates earmarked for drilling in 2013.
2. Extension of the vertical extent of the gas bearing LC-2 reservoir by 200m TVD as well as establishing probable communication of the LC-2 reservoir with penetrations in the up-dip Gazelle-2 well (tested at 32.5mmscfd) and on the southern side of the fault in the IVCO-21 well.
3. Appraising and testing the extent and quality of the UC-1 oil and gas reservoirs (UC-1A, UC-1B and UC-1C sands) downdip of the IVCO-14 well and establishing continuity of the gross sand interval between the IVCO-14 well and ST2.
4. Obtaining necessary oil and gas samples from the UC-1 and LC-2 reservoirs to facilitate development and confirm compositions.
5. The penetration by the ST1 well of a new, high quality Lower Cenomanian 75m gross sand interval which provides an additional exploration target for the Block.

Forward Plan

Rialto has now completed the ST2 well testing programme and the well will now be suspended for future use. The rig will commence drilling the Gazelle-P4 well which is designed to appraise two additional oil reservoirs (UC-2 and UC-4), three additional gas reservoirs (UC-3, UC-5 and LC-1) as well as obtaining an additional penetration of the LC-2 reservoir. Following the drilling of the Gazelle-P4 well, all subsurface data from the Gazelle Field drilling programme will be integrated with the final processed 3D seismic data and a revised Competent Persons Report issued. A post ST1 well evaluation of the Condor discovery and selection of an optimal appraisal location for potential drilling in 2013, is also a high priority.

Commenting on today’s announcement Jeff Schrull Managing Director of Rialto said:

“We are pleased to have successfully and safely completed the drilling and testing of our first operated well in Block CI-202 along with our partner Petroci. The appraisal and well test data obtained will facilitate optimal and timely development of the Gazelle Field, and the Condor gas discovery demonstrates the remaining high impact exploration potential of this block.”

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