Pacific Rubiales Enters Brazilian Farm-in

Colombian oil producer Pacific Rubiales has agreed to a farm-in agreement for four blocks in the Bloques Karoon in Brazil, with an option to take a stake in a fifth. The blocks are owned by Karoon Gas Australia, and with the agreement, Pacific Rubiales takes a 35% stake in four of them and has the option to take a 35% stake in the fifth. An upfront payment of $40m covers sunk costs and could be increased by three wells at $70m each as the process continues, with the expectation of up to some $250m total to be paid out over the next 1.5-2 years. Pacific Rubiales plans to use cash on hand or generated cash flow to fund the project, and works with internal advisors on the deal.