Argos Resources Limited, the Falkland Islands-based exploration company, said it has extended its production licence PL001 to 31 December 2024.
The North Falkland Basin licence was due to expire at the end of this month before Argos received confirmation from the government that it would be extended.
In a separate statement, the company said that JHI Associates, a private Canadian company, has agreed to purchase the licence.
JHI is proposing to issue shares and a cash payment to acquire the licence, which Argos said would give it exposure to the Canje block in offshore Guyana, directly adjacent to the prolific Stabroek block where ExxonMobil discovered more than 10bn barrels of oil.
The consideration shares are expected to represent a stake of around 9.3% of JHI, with the Canadian company’s financial strength expected to underpin the extension of the licence, Argos said.
“The transaction would diversify both companies’ assets and pave the way for further drilling activity in the coming years,” a statement said.