The drilling program will target organic rich shales in the basin, which will allow testing parameters critical for source and reservoir rock evaluation, of similar age shale plays to be found in the Bakken of North America.

Petrel Energy and operator Schuepbach Energy International (SEI) have submitted the required government and landholder approvals related to the project.

The company has signed agreement with two local drilling companies to drill Piedra Sola and Salto wells in the basin to approximate depths of 700m and 1300m within a 4 to 6 week period.

Petrel Energy managing director David Casey said the approval process has taken longer time than expected and being the first mover in onshore Uruguay, the company plans to establish best practice procedures from the beginning.

"Despite the delays we are very happy with the progress to date aswe have taken the time to proactively work with landowners and government alike," Casey added.