Andes Energia (LON:AEN) says work will be accelerated in Colombia thanks to a deal it has done with Canada’s Canacol Energy.
The AIM-listed firm is selling just under half its 51% interest in Interoil Exploration and Production, a Norwegian group with assets in Colombia, for US$3.2mln.
Additionally, Canacol has agreed to provide a guarantee of US$4.8mln to fulfil Interoil's obligations for the LLA-47 licence.
It means the Colombian regulators will release Interoil from guarantees totalling US$3.6mn.
Andes said it will use the proceeds from the deal to continue the development of its Argentine and Colombian assets and for working capital purposes.
Chief executive Alejandro Jotayan: "We are very pleased to be able to enter into a partnership with Canacol, a leading exploration and production company focused on Colombia.
“This will allow us to accelerate the development of Interoil's Colombian assets and provide an opportunity to explore additional collaboration agreements with Canacol.
“Interoil's strengthened shareholder base will be of benefit to both Interoil and Andes."