Oil explorer Echo Energy will take part in assessing the Rio Salado Block onshore Bolivia over the next 12 months.
London-headquartered Echo said it signed an agreement with Pluspetrol and YPFB, Bolivia’s state oil company, yesterday.
Once the assessment is complete, Echo and Pluspetrol will be able to negotiate a commercial terms with YPFB, which would define a work programme and is likely to include the drilling of an exploration well.
Echo’s decision on whether to acquire a stake in the block depends on final commercial terms being inked.
Shares in Echo were up by almost 10% to 11.75p as of noon today.
Echo chief executive Fiona MacAulay said: “We are delighted to announce the signature of the technical evaluation agreement, further strengthening our relationship with our partner Pluspetrol and YPFB.
“This agreement enables the company to evaluate the highly prospective and potentially multi TCF exploration area which extends around the Huayco block.
“This is the second of many pre-identified strategic transactions in Bolivia demonstrating Echo’s ability to move quickly and deliver on its stated strategy.”