Rialto to raise $1.1m in placement to boost JV stake

West Perth-based Rialto Energy Ltd will raise $1.1 million through a placement to increase its stake in a joint venture with GlobalSantaFe Corporation oil and gas subsidiary Challenger Minerals Inc, the company has announced.

Rialto will boost its stake in the project from 10 per cent to 25 per cent with funds raised through the issue of 2.9 million shares at 40 cents each to sophisticated investors.

The amended agreement with CMI provides to Rialto:

• A guaranteed right for the next 3 years to an increased level of participating interest as a joint venturer with CMI in a range of high quality exploration, development or production opportunities in areas of interest to Rialto; and
• Access to offshore drilling expertise and drilling management services, thus significantly enhancing the ability to deliver on projects in the current tightly constrained drilling services market.

The full text of a Rialto announcement is pasted below

Rialto Energy Limited (ASX code: RIA) ("Rialto") is pleased to announce that, assisted by Tolhurst Limited, it has reached agreement to place 2,910,000 ordinary fully paid shares at an issue price of 40 cents, to sophisticated or professional investors, to raise A$1,164,000 before expenses.

The purpose of the issue is to increase Ralto's interest in the International Joint Venture Program with Challenger Minerals Inc. from 10% to 25%, as referred to in Rialto's announcement dated 20 September 2007, and for working capital.

The shares will carry standard rights applicable to quoted ordinary shares in Rialto and will, from the date of issue, rank equally with fully paid quoted ordinary shares currently on issue.

In accordance with ASX Listing Rule 7.1, Rialto will not seek shareholder approval for the placement as the issue does not exceed 15% of the Company's current issued capital.