These Rio do Peixe Basin Blocks were awarded to a subsidiary of Eromanga’s Brazilian partner Gavea in partnership with a Canadian company. Gavea and Eromanga Hydrocarbons are already working together in Brazil’s Sergipe-Alagoas Basin.

“The additional acreage compliments Eromanga’s strategy of building a portfolio of exploration and development acreage onshore Brazil,” the company said yesterday.

The two blocks RIOP-T-71 and 72 together cover 59 square kilometers and were awarded under concession contracts requiring the joint venture to pay a signature bonus of about $US457,000) at signing and to complete an exploration program including two exploration wells within two years of the concession contract being formalised.

Eromanga will pay a 40% share of these expenditures. The company’s total commitment for the two blocks is expected to be about $US2 million to be spent over a two-year period from March 2008.

Eromanga said it chose the blocks after considering and rejecting several other opportunities during bidding round.

“The directors believe that Blocks 71 and 72 are particularly attractive Because the Rio do Peixe Basin is relatively underexplored but is on trend with, and shares many geological characteristics of, the prolific Potiguar Basin that lies to the north,” the company said.

“A working petroleum system is considered proven since 30 degree API oil was recovered from a shallow water well in the Souza Sub-Basin in which Blocks 71 and 72 are located.”

In addition, seismic suggests that inverted structures are present on the faulted, scarp slope that marks the southern boundary of the basin, according to Eromanga.

“Gravity data indicates that this faulted margin is located close to or within Blocks 71 and 72,” the company said.

Eromanga Hydrocarbons is the second Australian company to take up acreage from the ninth Brazilian licensing round. Last week, Karoon Gas announced it had picked up three offshore blocks