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0001362310-08-001682.txt : 200803310001362310-08-001682.hdr.sgml
: 2008033120080331090031ACCESSION
NUMBER:0001362310-08-001682CONFORMED SUBMISSION TYPE:8-KPUBLIC
DOCUMENT COUNT:27CONFORMED PERIOD OF REPORT:20080331ITEM
INFORMATION:Regulation FD DisclosureITEM INFORMATION:Financial
Statements and ExhibitsFILED AS OF DATE:20080331DATE AS OF
CHANGE:20080331
FILER:
COMPANY DATA:COMPANY CONFORMED NAME:RIO VISTA ENERGY PARTNERS
LPCENTRAL INDEX KEY:0001260828STANDARD INDUSTRIAL
CLASSIFICATION:WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO
BULK STATIONS) [5172]IRS NUMBER:200153267STATE OF
INCORPORATION:DEFISCAL YEAR END:1231
FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE
NUMBER:000-50394FILM NUMBER:08721701
BUSINESS ADDRESS:STREET 1:820 GESSNER ROADSTREET 2:SUITE
1285CITY:HOUSTONSTATE:TXZIP:77024BUSINESS PHONE:713-467-8235
MAIL ADDRESS:STREET 1:820 GESSNER ROADSTREET 2:SUITE
1285CITY:HOUSTONSTATE:TXZIP:77024
8-K1c72843e8vk.htmFORM 8-K
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): March 31,
2008
Rio Vista Energy Partners L.P.
(Exact name of
registrant as specified in its charter)
Delaware 000-50394 20-0153267
(State or other Jurisdiction of Incorporation) (Commission File
Number) (IRS Employer Identification No.)
1313 E. Alton Gloor Blvd., Suite J
Brownsville, Texas
78526
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (956)
831-0886
Inapplicable
(Former name or former address if changed since last
report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrantunder any of the following provisions:
o Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
1
Item7.01. RegulationFD Disclosure.
Rio Vista has attached as exhibits a press release and an
overview outlining Rio Vistascurrent business strategy, recent
developments and/or selected financial information andprojections.
The press release and overview are incorporated by reference into
this Item7.01.
The information included in this Item7.01, including the
attached Exhibit99.1 and Exhibit99.2, shall not be deemed filed for
purposes of Section18 of the Securities and Exchange Act of1934, as
amended (the Exchange Act), or incorporated by reference in any
filing under theSecurities Act of 1933, as amended, or the Exchange
Act, except as shall be expressly set forth byspecific reference in
such filing.
Item9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Rio Vista Company Overview March2008.
99.2 Press release issued by Rio Vista on March31, 2008
providing operational update
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has dulycaused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
RIO VISTA ENERGY PARTNERS L.P.
By: Rio Vista GP LLC, its
General Partner
By: /s/ Ian T. Bothwell
Name:
Ian T. Bothwell
Title:
Acting Chief Executive Officer,Acting President, Vice President,
Chief Financial Officer, Treasurer andAssistant Secretary
(Principal Executive, Financial and Accounting Officer)
Date: March31, 2008
3
EXHIBIT INDEX
Exhibit No. Description
99.1
Rio Vista Company Overview March2008
99.2
Press release issued by Rio Vista on March31, 2008 providing
operational update
4
EX-99.12c72843exv99w1.htmEXHIBIT 99.1
Filed by Bowne Pure Compliance
Exhibit 99.1
Overview
March 2008
Forward Looking Statements
Forward Looking Statements
This Presentation contains forward-looking statements, estimates
and projections with respect to the anticipated futureperformance
of Rio Vista that may be deemed to be "forward-looking statements."
These statements, estimates andprojections reflect various
assumptions made by Rio Vista concerning anticipated results, which
may not prove to be correct.All statements contained in the
presentation that address operating performance, future direction,
management and controlof Rio Vista, events or developments that are
expected to occur in the future (including statements related to
the timing orextent of changes in commodity prices for oil and gas,
the ability of Rio Vista to raise necessary capital for
developmentand/or replacement of production and reserves, the
ability of Rio Vista to replace production and reserves,
earnings,expectations, sales of assets, capital expenditures or
statements expressing general optimism about future operating
results)are forward-looking statements. Actual results could differ
materially from those reflected in the forward-looking
statementscontained herein as a result of a variety of factors,
many of which are beyond Rio Vista's control.
No Representations or Warranties
This Presentation has been prepared by Rio Vista and includes
information from other sources believed by management tobe
reliable. Rio Vista has not independently verified any of the
information from other sources. Rio Vista does not make
anyrepresentation or warranty, express or implied, as to the
accuracy or completeness of any of the information set forth
herein.This Presentation may contain summaries of the terms of
certain documents and agreements, but reference is made to
theactual documents and agreements for the complete information
contained therein. The information contained herein is as ofthe
date hereof and is subject to change, completion or amendment
without notice. Rio Vista assumes no responsibility forupdating
this information.
Leadership Overview
Douglas Manner, Chairman of the Board of Managers of Rio Vista
GP LLC, general partner of Rio Vista EnergyPartners L.P.
Significant exploration and production experience
Current CEO of Westside Energy Corporation (AMEX: WHT)
Former VP and COO of Gulf Canada
Previous Senior Vice President and Chief Operating Officer of
Kosmos Energy, LLC (backed by both Blackstone andWarburg Pincus), a
private energy company exploring for oil and gas in the offshore
regions of West Africa
Spent 15 years at Ryder Scott Petroleum, a leading reservoir
engineering firm
Ian Bothwell, Acting President and Chief Executive Officer of
Rio Vista GP LLC and Penn Octane Corporation
In November 2006, appointed acting Chief Executive Officer and
acting President of Rio Vista GP LLC and PennOctane Corporation
Effective September 30, 2004, elected to serve as Chief
Financial Officer, Vice President and Assistant Secretary ofRio
Vista GP LLC
Effective July 10, 2003, elected Treasurer of Rio Vista GP
LLC
Named Vice President, Treasurer, Chief Financial Officer, and
Assistant Secretary of Penn Octane Corporation inOctober 1996
Served as a director of Penn Octane Corporation from March 1997
until July 2004
From 1987 to 1992, served as Controller/Director of Financial
Analysis for Brooke Management Inc., the companywhich provided
corporate management services to Brooke Group Ltd. (BGL), a NYSE
publicly held company withconsolidated revenues of over $1 billion
and controlled several subsidiaries worldwide. BGL was initially
formed as aspecialty LBO company with $300 million of initial
funding to pursue acquisitions
2007 - Year of Transformation
Rio Vista Energy Partners L.P. ("Rio Vista", "RVEP" or "the
Partnership") has recently undergonesignificant changes to better
position the Partnership for stable cash flow and distribution
growth
Single focus business -principally engaged in thepurchase,
transportation and saleof liquefied petroleum gas("LPG")
Slow growth and unstable cashflows
Relatively high administrative andlegal costs
Exploration and production andterminalling and
transportationbusinesses provide attractiveMLP growth platform
Stable and diversified cash flows
Experienced and focusedleadership
Rio Vista Pre-2007
Rio Vista Today
Historical
Current Businesses
LPG
Terminalling/Transportation
Exploration &Production
Regional Enterprises, Inc.("Regional", formerly"Regional
Enterprizes,Inc.")
Primary business includes:
Receipt of bulk chemicalsand petroleum productsfrom ships,
barges and railinto its storage tanks ortrans-loading into
tankertrailers. Based inHopewell, Virginia
Mid-Atlantic region focus
Trans-loading from railcars to tanker trailers ofsimilar
products at theJohnson City, Tennesseerail site
Acquisition closed in July2007 at a purchase priceof $9.0
million
Rio Vista GO LLC ("RioVista GO", formerlyGO LLC)
Oil and gas pipelinebusiness located inPittsburg and
Haskellcounties in Oklahoma
Acquisition closed inNovember 2007 at apurchase price of
$4.0million
Rio Vista Penny LLC ("RioVista Penny", formerlyGM Oil
Properties, Inc.and Penny PetroleumCorporation)
Oil and gas propertieslocated in McIntosh,Pittsburg and
Haskellcounties in Oklahoma,including 100.0% interestin MV Pipeline
Company
LTM production (9/30/07)= 0.5 Bcfe
Acquisition closed inNovember 2007 at a totalpurchase price of
$26.4million
2P (proved plus probablereserves) purchasemultiple of
approximately$0.44/Mcfe(1)
Principally engaged in thepurchase, transportationand sale of
LPG
Owned and operated anLPG terminal facility inMatamoros, Mexico
andapproximately 23 miles ofpipelines which connect theMatamoros
terminal facilityto an LPG terminal facility inBrownsville,
Texas
Transported LPGexclusively forTransMontaigne
Sale to TransMontaigneclosed in December 2007for $10.8
million
Gathering
Overview of Rio Vista
(1) Source: Independent engineer reserve reports for G.M. Oil
Properties, Inc. and Penny Petroleum Corporation ("The Reserve
Reports") dated August 1, 2007. AssumesNYMEX strip pricing as of
August 1, 2007.
Rio Vista Asset Map
Oil & Gas Assets
Regional
Entered exploration and production and terminalling
andtransportation businesses
Acquired three privately held, related companies in eastcentral
Oklahoma on November 20, 2007: GM Oil Properties,Inc., Penny
Petroleum Corporation and GO LLC
Purchased Regional Enterprizes, Inc. on July 27, 2007
Exit from legacy LPG business
The Partnership closed the sale of its remaining LPG businessto
TransMontaigne on December 31, 2007
Recent Developments
(1) Does not include transaction fees and expenses.
Oklahoma Properties
Paid all outstanding distribution arrearages in 2007
Distribution of $0.25 per unit paid on February 14, 2008
Issued $4.0 million of Rio Vista common units to Standard
General and others on November 30,2007(1)
Leadership change
Appointment of Douglas Manner as Chairman of the Board of
Managers of Rio Vista GP LLC
Current Organizational Structure
Rio Vista
Operating
Partnership L.P
..
Rio Vista GP
LLC
Rio Vista Energy
Partners L.P.
Rio Vista E&P
LLC
Regional Enterprises,
Inc.
Rio Vista
Operating
GP
LLC
Rio Vista
ECO LLC
Rio Vista
GO LLC
Rio Vista
Penny LLC
GO LLC
MV
Pipeline
Company
2% and IDRs
98%
Limited
Partners
Rio VistaOperatingLLC
Secure additional funding in amounts sufficient to meet desired
development strategy for existingexploration and production asset
base
Expand exploration and production asset base through accretive
acquisitions with long-livedreserves
Leverage expertise of new leadership to optimize existing oil
and gas operations
Achieve organic growth through exploitation of numerous
low-risk, high-return projectsassociated with exploration and
production operations
Improve Regional's operating profits through efficiencies,
handling and storage of new productsand expansion of current
facilities
Reduce commodity price exposure through hedging program
Rio Vista Business Strategy
New business profile provides attractive growth platform
Numerous development projects associated with acquired Oklahoma
oil and gas assets that can berecognized with minimal capital
outlay
Prolific play that is in high demand - Woodford / Caney acreage
currently receiving high valuations
Entry into oil and gas business provides significant pipeline of
acquisition opportunities
Potential to build out additional terminalling assets on
undeveloped acreage held by Regional
Stable and diversified cash flows underpinned by long-lived
reserve base and Regionalterminalling and transportation
business
2P reserve life of 50.4 years based on 2008E production(1)
Small market cap helps facilitate rapid growth
Enhances impact of and competitive positioning for growth
opportunities
Experienced and focused leadership
Significant exploration and production and acquisition
experience gained through election of DouglasManner as Chairman
Rio Vista Investment Highlights
(1) Source: The Reserve Reports for G.M. Oil Properties, Inc.
and Penny Petroleum Corporation dated August 1, 2007. Assumes NYMEX
strip pricing as of August 1, 2007.Management estimates 2008
production will be 1.2 Bcf.
Acquired three privately held, related oil and gas companies in
East Central Oklahoma on November 20, 2007
Exploration and production acquisitions: GM Oil Properties, Inc.
and Penny Petroleum Corporation, now Rio VistaPenny LLC ("Rio Vista
Penny"), a wholly-owned subsidiary of Rio Vista
Rio Vista also acquired MV Pipeline Company from GM Oil
Properties, Inc. and Penny Petroleum Corporation. It is now a
wholly-ownedsubsidiary of Rio Vista Penny
Gathering system and pipeline acquisition: GO LLC, now Rio Vista
GO LLC ("Rio Vista GO"), a wholly-ownedsubsidiary of Rio Vista
Total purchase price of $30.4 million
$17.1 million assumption of senior secured debt owed to TCW
Asset Management Company ("TCW")
$9.4 million cash payment
$2.0 million for entry into $30.0 million first lien senior
credit facility with TCW and to purchase overriding royaltyinterest
held by an affiliate of TCW
$1.5 million of Rio Vista common units
$0.5 million short-term convertible note(1)
Purchase was partially funded through $30.0 million credit
facility provided by TCW
Initial draw under the facility of $22.1 million
$17.1 million assumption of senior secured debt
$3.0 million cash payment
$2.0 million of TCW fees and third party expenses
8-year amortization starting in December 2008 with fixed
interest rate of 10.5%
(1) 7.0% note payable to Gary Moores ("Holder", former owner of
Penny Petroleum Corporation) on May 19, 2008. Beginning February
19, 2008, Holder has option to convert theoutstanding principal and
interest into Rio Vista common units at a price equal to 90% of the
10-day average closing price as reported by the NASDAQ stock market
at the time ofconversion. The conversion option may be exercised on
only one occasion and expires on May 19, 2008.
Oklahoma Properties and Related Assets
Transaction Overview
Rio Vista
Acquired approximately 60.5 Bcfe of net proved and probable
reserves and approximately 15,000net acres located in McIntosh,
Haskell and Pittsburgh Counties in Oklahoma
Combined LTM (9/30/07) production of 0.5 Bcf and current daily
production of 1.8 MMcf/d
Rio Vista also acquired a 25% participation agreement on 4,800
acres owned by ConcordeResources with 35 Hartshorne and 4 Booch
infield development opportunities
Note: Black dots indicate non-designated operator
Oklahoma Properties and Related Assets
Overview of Assets Acquired
Drilling commenced inJanuary 2008
Located in region populatedwith leading gas producers
Acquired midstream assetsinclude Rio Vista GO's wholly-owned and
operated 25-mileBrooken pipeline and Rio VistaPenny's wholly-owned
andoperated 40-mile MV Pipeline
Long-lived proved producing properties with significant
development potential
Majority interest in 93 operated wells and 16 non-operated wells
in the Booch Sand, Hartshorne Coal Bed Methane, George'sFork and
Spiro formations
LOE cost of approximately $0.85/Mcf
F&D cost of $0.50/Mcf -$1.00/Mcf
Initial development has been focused on Hartshorne and Booch
plays
Hartshorne coal bed methane
Coal thickness contours ranging from a minimum of 2 feet to over
4 feet in select areas
Well potential: 90-100 vertical, 5-10 horizontal, 250 - 900 MMcf
per well
Booch sand
Acreage surrounding Lake Eufaula has net sand thickness of 25
feet
Land surrounding the edges and underneath Lake Eufaula has
locations with net sand thickness up to 200 feet
Well potential: 5-10 thin, up to 5 thick wells, 800 MMcf - 4 Bcf
per well
Significant upside potential in Woodford Shale with additional
opportunities in Wapanucka, Union Valley, Cromwell,Jefferson,
Mayes, Hunton, Sylvan, Viola and Wilcox plays
Rio Vista has an average working interest of approximately
85%
Proved and Probable Reserves Summary (1)
Oklahoma Properties and Related Assets
E&P Assets Acquired
(1) Source: The Reserve Reports, based on NYMEX strip pricing as
of August 1, 2007.
Oklahoma Properties and Related Assets
2008 E&P Development Plan
Rio Vista intends to drill 52 wells in 2008
114 wells are included in the 2008/2009 outside consultants
Reserve Reports
Of the 114 wells identified in the Reserve Reports, 51 wells are
on the 2008 drilling schedule
Includes horizontal and vertical wells in the Booch Sand and
Hartshorne Coal Bed Methane formations
1 deep well is on the 2008 drilling schedule that is not
included in the Reserve Reports
2008E total capex of over $11 million expected to be funded from
new debt / equity sources
The remaining 63 undeveloped locations reflected in the Reserve
Reports are scheduled to bedrilled in 2009 based on available
capital
Average vertical well cost is $170,000 and average horizontal
well cost is $600,000
Oklahoma Properties and Related Assets
Midstream Assets Acquired
MV Pipeline
Gathers natural gas from leases in the Texanna area north of
Lake Eufaula and delivers to the Oneokintrastate pipeline in
McIntosh County
40 miles of Class I pipelines, a low-pressure gas gathering
system and a 3,000 hp centralcompressor station with capacity of 50
MMcf/d
Originally constructed in 1984, upgraded in 1998 and added 2 new
compressors in 2006
Brooken Pipeline
Gathers natural gas from several properties located in Haskell
and Pittsburg counties
Originally constructed in 1992 and consists of approximately 25
miles of pipeline
Capacity of 10 MMcf/d
Current total pipeline throughput of approximately 2.0
MMcf/d
Current third-party throughput of approximately 0.6 MMcf/d
Principal business includes storage, transportation and railcar
transloading of bulk liquids,including chemical and petroleum
products
Located on the James River in Hopewell, Virginia
Receives bulk chemicals and petroleum products from ships and
barges (into approximately 10.3million gallons of available
storage) and product from a rail spur capable of receiving 14 rail
cars atone time for transloading of chemical and petroleum liquids
for delivery throughout the mid-Atlantic
34 years of operating history
Total purchase price of $9.0 million
$8.0 million cash
Funded with a $5.0 million one-year note and existing cash
$1.0 million seller note to be paid in four equal semi-annual
installments beginning January 2008
Results from period of November 1, 2006 - October 31, 2007
Revenue of $6.7 million
EBITDA of $2.4 million
Acquisition of Regional
Storage facilities include 15 steel tanks and transportation
fleetconsists of 30 tractors and 48 tanker trailers
Approximately 90% of Regional's 10.3 million gallons of
storagecapacity is currently being utilized
Regional does not take title to products it stores for
customers
Regional Overview
Transportation services are short-haul in nature, approximately
85% of deliveries are madewithin a 150-mile radius of the Hopewell
terminal
Specialized tanker trailers are capable of handling hazardous
materials allowing Regional todemand a premium fee
2007 average driver hour efficiency rate was 79.1%
Driver turnover rate is approximately 18%, compared to the
industry average of 37%
Current "safestat" as determined by the D.O.T. is 14.6, which is
lower than competitor average ofapproximately 35.3
Transloading facilities at Hopewell terminal and in Johnson
City, Tennessee
Open rail access to the Norfolk Southern and CSX rail lines
offers competitive rail economics andflexibility for customers
Major Contracts
Asphalt storage and handling contract that runs through October
2012 with annual fee of over$500,000
Required to provide minimum annual throughput of 610,000 barrels
per year, with additional volumes paid on aper barrel basis
#2 oil storage agreement that renews annually with annual
storage fee of approximately $300,000plus product transportation
fee calculated on a per gallon basis
Fuel oil storage and transportation agreement that runs through
February 2013 with annual storagefee of over $300,000 plus product
transportation fee
Required to provide minimum annual throughput of 35,000 tons per
year, with additional volumes paid on a perton basis
The remainder of Regional's cash flow comes primarily from
transportation fees
Regional Customer Overview
Regional Expansion Opportunities
Regional controls 2.25 acres of undeveloped acreage at its
Hopewell facility which couldaccommodate up to an additional 4.2
million gallons of storage capacity
Estimated capital cost is approximately $375,000
Contemplating a project that would more than double current rail
siding capacity at Hopewell
Regional qualifies as a small business contractor and vendor
capable of storing, transporting andsupplying bulk chemical and
petroleum products on behalf of U.S. government agencies
Regional intends to seek contracts with the Department of
Defense and the Defense Energy SupportCenter based on its proximity
to multiple military bases
Potential to handle additional bulk products at Hopewell
facility such as coal, limestone, wastewood, bio fuels and fly
ash
Exploring opportunities at Johnson City facility to handle and
transport additional chemicals
Financial Summary
($ in millions)
Rio Vista Stand-Alone Financial Summary (1)(2)
Based on Management estimates at price of $6.51/Mcf. Assumed Rio
Vista PDP, PDNP, PDBP and PUD success factors of 100%, 100%, 100%
and 75%, respectively. Assumes PDPs 90% hedged at NYMEXstrip prices
as of January 14, 2008.
Assumes Rio Vista will be successful in securing additional
financing in an amount sufficient to fund estimated Capex and other
working capital requirements.
Risk Management Policy
Rio Vista intends to use a high level of hedging to mitigate
commodity price volatility andmaintain cash flow and distribution
stability
Up to 90% of proved developed production for up to five
years
Utilize swaps for majority of hedges but may consider utilizing
costless collars as well
Existing hedging program
A significant percentage of 2008-2010 production will be
hedged
Current hedges:
February 2008 - March 2008: ~0.8 MMcf/d @ $6.70/Mcf
April 2008 - October 2008: 1.0 MMcf/d @ $6.35/Mcf
November 2008 - March 2009. 1.0 MMcf/d @ $8.61/Mcf
Opportunistically hedge additional volumes through the course of
the year and into 2009
Rio Vista will similarly hedge production associated with future
acquisitions to protect theeconomics of the transactions
New business profile provides attractive growth platform
Numerous development projects associated with acquired Oklahoma
oil and gas assets that can berecognized with minimal capital
outlay
Prolific play that is in high demand - Woodford / Caney acreage
currently receiving high valuations
Entry into oil and gas business provides significant pipeline of
acquisition opportunities
Potential to build out additional terminalling assets on
undeveloped acreage held by Regional
Stable and diversified cash flows underpinned by long-lived
reserve base and Regionalterminalling and transportation
business
2P reserve life of 50.4 years based on 2008E production(1)
Small market cap helps facilitate rapid growth
Enhances impact of and competitive positioning for growth
opportunities
Experienced and focused leadership
Significant exploration and production and acquisition
experience gained through election of DouglasManner as Chairman
Rio Vista Investment Highlights
(1) Source: The Reserve Reports for G.M. Oil Properties, Inc.
and Penny Petroleum Corporation dated August 1, 2007. Assumes NYMEX
strip pricing as of August 1, 2007.Management estimates 2008
production will be 1.2 Bcf.
EX-99.23c72843exv99w2.htmEXHIBIT 99.2
Filed by Bowne Pure Compliance
Exhibit99.2
Rio Vista Energy Partners Provides Operational Update
and Provides Company Overview in Regulatory Filing
BROWNSVILLE Rio Vista Energy Partners L.P. (NASDAQ: RVEP), an
energy services master limitedpartnership focused on the
development of oil and gas properties in Oklahoma and the
terminallingand transportation of bulk chemical and petroleum
products in Virginia, today announced that it hasfiled a
presentation regarding the Companys recent acquisitions and
business operations in aregulatory filing made with the Securities
and Exchange Commission on Form 8-K. Rio Vista intendsto make this
presentation available on its website in the near future
(www.riovistaenergy.com).
In addition, the Company today provided an interim operations
update.
Management Comments
Ian Bothwell, Rio Vistas Acting Chief Executive Officer said,
Good progress is being made in boththe development of the recently
acquired oil and gas assets in Oklahoma and the expansion of
newcontracts and growth opportunities in our terminalling and
transportation business in Virginia. Anumber of projects on our
Oklahoma assets are well under way, including infrastructure
improvementsand additions, existing well tie-ins, workovers and new
drilling. A large drilling program iscurrently being organized for
2008 to continue to develop both the shallow Booch sand and
theHartshorne Coal. We are anticipating a significant increase in
our production from these assets asa result of this activity. In
addition, we have been actively pursuing new contracts and
growthopportunities for our Virginia operations and continue to be
excited about the revenue growthanticipated from this activity. We
continue to evaluate new assets for acquisition and lookforward to
success in this area much like we experienced in 2007.
Operations Update
Oklahoma
A pipeline was laid to tie an existing well, the Groseclose
2V-17 (100% WorkingInterest), adding 100 mcfd of gross
production.
A pipeline was laid in the Brooken Field to bypass an existing
pipeline therebyreducing back pressure on the area. Additionally,
this new interconnection has decreasedRio Vistas transportation
cost in the Brooken Field.
Rio Vista Operating LLC has taken over operations of the
Oklahoma producing properties.
Concorde Resources has recently drilled a successful coal bed
methane well (Chaffin1-26) on joint acreage with Rio Vista (Working
Interest 25%). The well has been completedand is currently
testing.
The Belt 2V-24 (Working Interest 34%) has been deepened and
logged in the SavannahSand. The well has been frac stimulated and
tested. The gas pipeline interconnectionwill be completed during
April2008.
The Cannon 1-31 (deep test in the Crouch Field) has been drilled
and cased. Openholelogs confirm the existence of multiple
productive zones. Completion of this well began inMarch.
The Donna 1 (vertical Hartshorne Coal in the Brooken Field) has
been drilled and cased.The completion of this well will begin in
early April2008. Rio Vista will have an 80%Working Interest in this
well.
The Tom 1 (vertical Hartshorne Coal in the Brooken Field) has
been drilled and cased.The well has also been perforated and is
currently being tested. Rio Vista will have an80% Working Interest
in this well.
The ACE #2-36 (horizontal Hartshorne Coal in the Canadian Field)
will spud in earlyApril. Rio Vista has a 51% Working Interest in
this well.
Regional
Recently contracted with an existing customer for additional
terminalling andtransportation. The contract term is for 5years and
is expected to provide increases inboth terminalling and hauling
revenues.
Recently contracted with other customers for transportation
services. Contracts rangefrom 1year to 2years and are renewable
thereafter. Contracts are expected to provideincreases in both
terminalling and hauling revenues.
Recently registered with the US Government Central Contractor
data base with status asa small business contractor and vendor
capable of storing and hauling bulk chemical andpetroleum products.
Such registration allows Regional to bid for government
contractswithin the Department of Defense and the Defense Energy
Support Center and any otherapplicable agency. Regionals operations
are strategically located near many significantmilitary facilities
(army and navy). Regional expects that this registration will
provideopportunities for significant additional revenues.
Since ownership of Regional, Regionals plant and hauling
operations have beenoperating more efficiently, with increased
driver utilization during the forth quarter of2007.
Regionals current Safestat number is 14.6 which is considerably
lower than theaverage of Regionals competitors of approximately
35.3. Safestat is a numericalgrading system that is administered by
the US Department of Transportation. It considersfactors such as
roadside DOT inspections, traffic citations, etc. and is relied
upon byinsurance companies, state police, DOT, competitors, and
potential customers in gradingRegional.
About Rio Vista Energy Partners L.P.
Rio Vista is a master limited partnership focused primarily on
acquiring and developing oil and gasexploration, production and
transportation assets. Through its subsidiaries, Rio Vista
currentlyowns certain leasehold interests of oil and gas producing
properties and associated pipelinegathering systems in East Central
Oklahoma. Rio Vista is also engaged in liquid bulk
storage,transloading and transportation of chemicals and petroleum
products through its assets andoperations in Hopewell, Virginia.
Rio Vista seeks to grow primarily through the acquisition
ofqualified oil and gas assets. Penn Octane Corporation (OTCBB:
POCC) owns 75% of Rio Vista GP LLC,the general partner of Rio
Vista.
Forward-Looking Statements
Certain of the statements in this news release are
forward-looking statements, including statementsregarding the
operation status of Rio Vistas oil and gas properties, including
future productionof oil and gas from Rio Vistas properties in East
Central Oklahoma and the liquid bulk storage,transloading and
transportation of bulk chemicals and petroleum business in
Hopewell, Virginia.Although these statements reflect Rio Vistas
beliefs, they are subject to uncertainties and risksthat could
cause actual results to differ materially from expectations. The
acquisition of theproperties in East Central Oklahoma may not prove
successful and has substantially increased RioVistas and its
subsidiaries indebtedness and contingent liabilities, and may
present integrationdifficulties. Continuation and expansion of
production may require unforeseen capital investment.Future
production may be lower than anticipated, and actual natural gas
reserves may prove lowerthan estimated. If Rio Vista does not
receive sufficient revenues from the use of its assets, RioVista
would suffer material adverse consequences to its business,
resulting in reduced cashavailable for distributions. Rio Vistas
credit facility with TCW prohibits distributions by RioVistas
Oklahoma subsidiaries during the first 12months of the credit
facility and limits thosedistributions to 75% of defined available
cash flow thereafter. As a result, Rio Vista may nothave sufficient
available cash to pay minimum quarterly distributions. In addition,
Rio Vista maynot distribute sufficient cash to meet the tax
obligations of unitholders associated with theownership of common
units. If Rio Vista does not have sufficient capital resources for
acquisitionsor opportunities for expansion, Rio Vistas growth will
be limited. Rio Vista may be unable tocomplete future acquisitions
of qualified oil and gas assets or other transactions and, even
ifcompleted, acquisitions may not prove successful. Additional
information regarding risks affectingRio Vistas business may be
found in Rio Vistas most recent reports on Form 8-K, Form 10-Q
andForm 10-K and its registration statement on Form S-3 filedwith
the Securities and Exchange Commission on February13, 2008, and in
Penn Octane Corporationsmost recent reports on Form 8-K, Form10 Q
and Form 10-K filed with the Securities and ExchangeCommission.
Contact:
Rio Vista Energy Partners L.P.
Ian T. Bothwell, 760-772-9080
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