KAROON Gas Australia Ltd has moved to buy out its financially troubled JV partner in its core exploration area off the coast of Brazil.

The company recently announced it has entered into a binding Sale and Purchase for Pacific Exploration and Production Corp.’s 35% equity interest in the jointly held Santos Basin exploration blocks S‐M‐1037, S‐M‐1101, S‐M‐1102, S‐M‐ 1165 and S‐M‐1166 for up to US$20.5 million.

The Agreement to acquire the 35% interest follows Pacific’s application for insolvency protection with the Superior Court of Justice in Ontario, Canada during April 2016.

The Agreement remains conditional upon, among other things, approval from the Petroleum Regulator, the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis and an approval order\ from the Superior Court of Justice in Ontario.

“The acquisition of Pacific’s interest in the Blocks maps a clear path forward for Karoon to introduce a new funding partner to progress the Echidna discovery appraisal drilling campaign,” Karoon’s managing director Robert Hosking said.