The Chinese government has given final approval for state-run China National Offshore Oil Corporation (CNOOC) to farm-in to five permits in Queensland s Galilee basin with Australian coalbed methane (CBM) player Exoma Energy.
The move clears the way for CNOOC to gain a 50% in the ATP 991, 996, 999, 1005 and 1008 permits, with the deal already receiving approval from the Queensland government last month.
Under the agreement CNOOC will pay a minimum of A$50 million (US$51.6 million) to cover CBM and shale gas exploration over the combined 26,840 square kilometres of prospective CBM and shale gas acreage.
Exoma had also granted the Chinese giant an option to acquire 86.6 million ordinary shares in the company at A$0.315 per share, however CNOOC was unable to receive approval from the Chinese Government Authority for the placement before today s termination date.
As a result Exoma said it would not be proceeding with the placement of shares to CNOOC.
Exoma also announced that it had signed a deal with fellow Australian company Atlas Drilling to secure the drilling rig Atlas Rig-1 for the completion of 10 wells with an option to extend.
It added that it was currently in negotiations to secure a second rig to accelerate its drilling programme which is scheduled to start later this month.
Exoma plans to drill 11 CBM core wells and 10 shale gas core gas wells this year to form the basis for appraisal and reserve development next year.
