AMER.L Share News (AMER)

(Sharecast News) - Oil and gas producer and explorer Amerisur Resources has entered into a farm-out agreement with Occidental Andina - an affiliate of international oil and gas exploration and production company Occidental Petroleum Corporation - it announced on Friday.The AIM-traded firm said the agreement was across the Putumayo-9, Terecay, Tacacho and Mecaya exploration blocks, all in the Putumayo region in southern Colombia.In consideration of the acquisition of a 50% interest in each block, Occidental Andina would fund a $93.25m exploration and appraisal program between 2019 and 2021.Occidental Andina would fund 85% of the total planned 2D seismic cost expenditure of $65m, and 100% of the $38m planned drilling programme.The board said the companies had agreed there would be a dedicated transport capacity in the OBA for the transport of oil from the farm-out blocks, with a commercial tariff charged for Occidental Andina's share.Amerisur Exploracion Colombia, a subsidiary of Amerisur, would be the operator of the blocks, which extended over 1.4 million acres and had prospective resources of 656 MMBO.The work programme included the acquisition of 878 kilometres of 2D Seismic, and the drilling of five exploration wells.Completion of the transaction remained conditional on approval from the Agencia Nacional de Hidrocarburos, with all parties to now work towards obtaining this, according to Amerisur."It gives me great pleasure to welcome Occidental Andina as our partner into these important blocks," said Amerisur chief executive officer John Wardle."Occidental Andina has a long and distinguished history in Colombia, with great understanding of the geological and operating environment, and an outstanding technical team with whom we enjoy a close and harmonious relationship."Wardle said the farm out recognised the "significant value" Amerisur had created during its growth phase over the last few years, with the transaction to now "amply fund, widen and bring forward" its exploration programmes in the Put-9, Tacacho, Terecay and Mecaya properties, which were believed to hold "very substantial" resource potential."As operator, we are already working on the programmes to be executed in these blocks and expect to progress those activities in the near term."