The company will acquire a 40.625% interest in the Argyle and Lauren projects, as well as interests in other assets from Pangaea Oil and Gas Ltd. both projects are operated by Queensland Gas Company.

The agreement also includes a 40.625% interest in a pipeline licence in PPL 107. This would give Origin access to the Wallumbilla-to-Brisbane pipeline, which runs within 20km of the Argyle Project area.

In addition, Origin will acquire about a 30% interest in two adjacent permits.

The Argyle Project neighbours the Talinga Project, which Origin said it was currently assessing.

Origin said both projects, as well as a large portion of the acquired surrounding acreage, cover the coal seams of the Walloons Subgroup, which are considered highly prospective for coalbed methane development.

“The net 2P reserves of 117PJ acquired, represent the appraisal of only a small portion of the overall area,” Origin general manager, planning and development, John Rodda, said.

“The report by independent reserves certifiers suggest a 3P reserve of 260PJ net to the acquired interest in the ATP 620P area (Argyle) alone.”

“Additional recoverable gas would require capital to confirm and subsequently develop. Together with exploration potential of the acreage, it provides a significant upside to the transaction."

Of the gas reserves acquired from Pangaea, about 30 PJ has been contracted to Incitec Pivot Ltd in Brisbane, with net sales to Origin starting at 3 PJ per annum from late 2007 onwards, Rodda said.