Solo Oil is to acquire Ilakon, a wholly-owned subsidiary of Obtala Resources which holds the rights to the Mina El Carmen block in Argentina.
A binding heads of agreement has been signed with Obtala in an all shares transaction valuing the block, which covers 4,940 acres on the northern side of the Golfo San Jorge basin, at $750,000.
Under the terms of the agreement, Solo will acquire Ilakon and its Argentinean subsidiary, Spinell Sociedad Anomima, which holds a 100% interest of the 25 claims which make up the block.
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The company was keen to emphasise that the block is lightly explored and has received only limited exploration work since the 1940's. Oil and gas shows have been recorded from wells on the block and the shallow Glauconitico gas bearing reservoir.
Solo executive director Neil Ritson said: "The Mina El Carmen Block presents an exciting opportunity to acquire an early phase exploration project in a proven basin setting. This investment is in line with Solo's investing policy of holding a diverse portfolio of oil and gas interests at different stages of maturity.
"Initial work will concentrate on consolidating all existing regional and local data prior to developing a more detailed exploration work program. Solo will at an appropriate time seek a partner."
The share price fell 2.48% to 0.59p by 13:26. Obtala's shares were flat at 31.75p.
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