Under terms of the agreement, Varuna has agreed to reimburse Afminex US$450,000 for the money the Perth-based company has already invested in a string of oil fields in the Central Asian republic of Kyrgyzstan.

Varuna has also agreed to invest a further US$4.8 million to enable the rapid development of the Charvak and Ashvaz oilfields, said to hold 11 million barrels of recoverable oil, as well as financing exploration on the larger oil plays in the area.

Afminex and Varuna will both have a 25% indirect interest in the oil project after the deal. Canadian company, Textonic Consulting, holds the rest.

Earlier in the week, Afminex announced that two wells currently being developed should produce up to 230 barrels of oil per day in six to eight weeks. The company plans to have 10 wells in production by June.