The project is in the Maryborough Basin, a Jurassic to Cretaceous basin, with both measures containing coal seams. Small-scale coal mining has occurred in the Burrum Syncline for more than 100 years.

The farm-in covers the Burrum Syncline Area – the ATP 613P, ATPA 674P and ATPA 733P leases.

Eureka has agreed to fund a two-stage CSM exploration program to earn a 90% working interest within the area.

Under Stage 1 of the program, Eureka will fund the drilling of two core wells in the Burrum coal measures. If this initial drilling indicates that the area has CSM potential, Eureka has the option to fund further drilling and two pilot projects in project area involving a minimum of five wells in each pilot project to dewater the coals and maintain gas production from the pilot for a sufficient time to establish decline rates.

Magellan will be operator of the joint venture and Stage 1 of the program is scheduled to be completed by December 31.

If the joint venture activities delineate a CSM resource and the parties decide to develop the area, Magellan can exercise a back-in entitlement to retain up to a 50% participating interest by matching Eureka’s prior expenditure.