UK-based Advance Energy raised capital to acquire a 50% interest in the Buffalo project located offshore Timor-Leste.

Carnarvon Petroleum Timor, a unit of Carnarvon Petroleum, owns 100% interest in the Buffalo Production Sharing Contract (PSC).

Advance Energy will purchase the stake by taking 50% interest in Carnarvon Petroleum Timor.

On a free carried basis, Advance Energy will fund the Buffalo-10 offshore well for up to a cap of $20m.

Advance Energy CEO Leslie Peterkin said: “The Buffalo PSC has the potential to deliver significant production and associated cash flow, with exceptional rates of return.

“The board considers this project to be the ideal launchpad for our longer-term strategy, which focuses on achieving scale and generating shareholder returns.

“The company has a big year ahead and we look forward to updating the market as we deliver operational and corporate milestones.”

The transaction, which is subject to Advance Energy shareholders’ approval, is planned to be completed in mid-April.

Carnarvon managing director and CEO Adrian Cook said: “The Buffalo project is progressing well and looks to be positioned for a window in time where there are now forecasts of shortages of quality oil from projects like Buffalo”

Carnarvon is considering redeveloping the Buffalo oil field, which is estimated to the remaining 2C oil resources of 34.3MMbbl.

The latest development follows Carnarvon Petroleum signing a farm-out deal with Advance Energy last year.

The farm-out deal requires Advance Energy to fund up to $20m for the drilling of Buffalo-10 well in order to earn the 50% stake.