The Perth-based company already has an extensive frontier acreage spread in West Africa and now wants to acquire production, development and near-field exploration assets.

Managing director Mark Fenton said the acquisition could mark the beginning of its involvement in South America.

“The acquisition of the La Punta Oilfield interest is an exciting initiative for Baraka and provides us with existing production, near-term development and significant exploration upside,” he said.

“We are excited by the opportunities opening up for us in South America, and we believe the La Punta transaction offers significant upside for Baraka in the short to medium term.”

The capital raising will see Baraka raise $3 million via a share purchase plan to existing shareholders.

Shares will be placed at 9c each – a 28% discount to BKP’s closing price of 12.5c last week.

The La Punta farm-in gives Baraka an immediate net 8.28% share after government royalties of production from the La Punta-1 well, currently producing 1400 barrels per day of 37 degree API oil from the Mirador Formation.

The company will also be entitled to a 25.75% share of the recently begun liquids stripping gas business for the next five years, increasing to a 50% share from September 2012.

In addition, an application has been lodged for the drilling of an up-dip development well, La Punta- 2, which is expected to be drilled at the end of this year.

Deeper exploration objectives are also targeted at La Punta-2 and, given a discovery, Baraka will obtain a net 25.76% of future production from these formations.

The location of La Punta-2 will be based on the results of a 45-square kilometre 3D seismic survey to start this month.

Baraka will also have the rights to participate in future production from any exploration wells to be drilled in the La Punta Block.

The JV will consider the timing of exploration drilling after the results of the 3D seismic survey have been received.