Subject to obtaining regulatory approvals in Brazil, Karoon will earn the interest in both blocks by funding 35% of a well in the Maruja prospect, as part of a two well drilling program.
Karoon will then pay its equity share of continued work and reimburse Petrobras for sunk costs.
Drilling has commenced in the Quasi prospect and drilling in the Maruja prospect is expected to commence next month.
The parties are currently finalizing the terms of a joint operating agreement to govern operations on the blocks moving forward.
Three oil prospects have been identified with prospect size ranges (gross mean recoverable) estimated to be in excess of 100 million barrels.
Karoon said that its preliminary economic evaluation indicates that a development in this setting can be rapidly brought to production due to the close proximity of existing oil and gas infrastructure.
The recent Petrobras discoveries at Tiro and Sidon in block BM-S-40 are located 16km from the Maruja prospect, and these discoveries were in good quality tertiary aged sandstone reservoirs estimated to contain cumulatively 120mmbo.
Petrobras has lodged a development application with the relevant government authority and is currently producing oil at the Tiro discovery under an extended well test.
