Under the deal, Baraka will pay an unspecified entry fee, complete a 3D seismic survey before December 2007 and drill one further exploration well targeting deeper targets in early 2008 to earn the interest in La Punta.

The company will also acquire a participating interest in the gas liquids stripping business, as well as a stake in the surrounding block where the field is.

The MoU is subject to legal due diligence and finance.

Baraka said it will review funding options in the short term even though it has enough cash reserves to fund the investment.