Karoon Plans $150M Brazil Oil Well Drilling Plan, Seeks Partner

The company estimates that it has found at least 7 million barrels of contingent resources in the prospect. It expects there is a good chance that additional drilling will bring the contingent resources up to at least 80 million barrels.

"We need more than 70 million barrels of oil for the area to be commercial," he said.

The second well will seek new prospects. The wells should take about 30 days each to complete, and evaluation of the drilling could be completed in about 45 days after the end of drilling, he added.

So far Karoon and Pacific Rubiales have invested more than $200 million in drilling three wells in their five areas. They have made two discoveries, one at the end of 2012 and another in mid-2013.

Karoon is counting on the proceeds of a sale of a natural gas asset in Australia to pay for the new wells. Even if Karoon finds more oil, Hosking said it will need a lot more capital to develop anything it finds in Brazil.

Hosking said it will cost as much as $2.9 billion to develop Kangaroo-1 if drilling shows the discovery to be economically viable. The first oil from the prospective field could be flowing by sometime in 2018 or 2019, he added.

(Writing by Jeb Blount; Editing by Leslie Adler)