Karoon Gas Australia Ltd is trying to sell a stake in its Brazilian offshore oil-exploration blocks as it plans to start a $120 million to $150 million drilling program, its top South American executive said.

Karoon has hired Brazilian investment Bank BTG Pactual to find a "farm-out" partner for its five blocks in the Santos Basin off Brazil's Santa Catarina state, the executive, Tim Hosking, said.

Karoon, which owns 65 percent of the blocks, will pay for the current, two-well drilling plan along with its 35 percent partner, Canadian oil company Pacific Rubiales Energy Corp . But Hosking wants to find a third partner to buy 15 percent of the blocks and help pay for future development.

"BTG Pactual has talked with several companies, but the market is a bit weak," Hosking said, adding that the new wells they plan to drill should expand on recent discoveries and make finding a partner easier.

Karoon and Pacific Rubiales plan to start drilling the first of the initial two wells next week. The objective of the first well is to evaluate the extent of the Kangaroo-1 discovery.

Drilling will be done by Olinda Star, a semi-submersible drilling platform owned by Brazil's Queiroz Galvao Oleo e Gas SA.

The Kangaroo-1 well found a column of light crude with 76 meters of net pay at 40 degrees on the American Petroleum Institute scale. On the API scale, the higher the number the lighter the oil. Light oil is more easily refined than heavy and sells for a premium.

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.