South America-focused Amerisur Resources has been granted regulatory approval for a farmout agreement signed last year with Houston-based Occidental Petroleum covering assets in Colombia.

Under the $93 million deal, Occidental will earn a 50% share in the Putumayo-9, Terecay, Tacacho and Mecaya blocks in southern Colombia.

The US player will fund the exploration and appraisal programme for the blocks, which is set to take place between this year and 2021.

Funding includes 85% of the 882 kilometres 2D seismic, 116 square kilometres 3D seismic and 100% of the planned five well drilling programmes, Amerisur said on Tuesday.

Amerisur will remain the operator of the blocks that cover 1.4 million acres and hold 448 million barrels of oil mid-case gross prospective resources, based on management estimates.

John Wardle, chief executive of Amerisur, said: “We are pleased to secure all the approvals associated with the transformational deal with Occidental. Work has started to initiate seismic surveys and drilling on the acreage later this year.”

Meanwhile, Amerisur recently completed the Platanillo-26 infill well targeting an undrained area of the Platanillo field. The well encountered 46 feet net pay in the upper and lower U sands, and is now onstream and producing around 710 bpd.

In addition, exploration work continues nearby with the Sol-1 well, where logging operations are currently underway.

After drilling operations are completed at Sol-1 the rig will move to drill the Indico-2 appraisal well.

“Production optimisation at Platanillo continues to deliver with production now over 4500 barrels of oil per day from the field. On completion at Sol-1 the drilling rig on CPO-5 will return to Indico for appraisal drilling that has the potential to increase reserves and production from the field,” Wardle added.

Amerisur's shares were up 4.5% on Tuesday morning in London.

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Amerisur, Oxy get green light for Colombia deal