Echo Energy has entered into a binding joint evaluation agreement with Pluspetrol Bolivia to purchase an 80% operated stake in the Huayco block in Southern Bolivia.
With the transaction, Echo Energy has entered Bolivian market.
Expected to benefit from full 3D seismic coverage, Huayco block is located within the Tarija Basin with an area of around 75km².
With significant multi-Tcf gas potential, the block is near to crucial export gas pipeline infrastructure that can connect any discovery to major gas markets in Brazil and Argentina.
The agreement is said to start with a technical evaluation after which, subject to the usual regulatory approvals, Echo will acquire an 80% operated position, which is currently under control of Pluspetrol with maximum stake.
Under the evaluation agreement, Echo will pay 100% of the first well and fund the agreed technical studies. As a result, Echo will not pay back costs or consideration.
Echo also said that it is close to receive other exploration and production assets in the region which will be subject to separate announcements
Echo Energy chairman James Parsons said: “We are confident in the multi Tcf scale and technical quality of this acreage and believe it will also be of interest to strategic partners in due course.
“We understand the strategic value of establishing relationships with key regional industry participants, and see Pluspetrol as a long-term partnership across the region who can assist Echo whilst we build our operating capability.
“This initial move also demonstrates our ability to move quickly in securing access to world class assets as we build a broad exploration portfolio in the gas hungry Central and South American region.”