The shares of Karoon Gas Australia Limited (ASX: KAR) rocketed higher by as much as 20% to $1.68 in morning trade after the oil and gas producer announced that it was in negotiations with Brazilian petroleum giant Petrobras for the acquisition of two oil projects.

In late trading, Karoon’s share price was up 11.5% at $1.555.

The projects that Karoon hopes to acquire are a 100% stake in the 45,000 barrel-a-day Bauna field in the Santos Basin, and a 50% stake in Tartaruga Verde in the Campos Basin. The latter, which is still in development, will leave Petrobras as the operator of the field.

After a competitive bidding process which took almost 12 months, management will now conduct confirmatory due diligence and negotiate final terms and conditions.

This wasn’t the only positive development for the company today either. This morning, Karoon also announced that it has been awarded an exploration permit for the Ceduna Sub‐Basin off the coast of South Australia.

According to the news release, the permit covers 17,793 square kilometres of Australia’s most active and prospective frontier oil exploration province. Karoon believes the basin has the potential to be a globally significant hydrocarbon province with world class potential.

Clearly, these are very promising developments for the company and will come as a huge relief to shareholders. Prior to today, Karoon had lost almost a third of its market value in the last 12 months.

Whilst this is undoubtedly great news, ultimately the direction the oil price takes over the next 12 months will play a key role in Karoon’s future. Right now oil prices are looking favourable after OPEC’s decision to reduce output, but I feel in the long-term prices will head lower again. We also don’t know how much Karoon will pay for Petrobras’ two stakes and whether it will recover those payouts down the track.

For those reasons I wouldn’t invest in Karoon even after this positive news. But if you feel oil prices are going to surge higher again over the next 12 months then Karoon, Woodside Petroleum Limited (ASX: WPL), and Oil Search Limited (ASX: OSH) could all prove to be good investments.

Instead of investing in Karoon I would personally choose to invest in these rapidly growing shares. Each has strong growth potential and could bolt higher in the months ahead in my opinion.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.