Galilee and Comet both say this barely explored basin is prospective for both CSM and conventional hydrocarbons.

According to Comet, thick Permian-aged coals, similar to those being developed for CSM in the Bowen Basin to the east, underlay much of the area, and oil and gas shows have been recorded in several oil and gas wildcats.

Galilee says six petroleum exploration and two deep stratigraphic wells have previously been drilled within its permit areas.

“Most encountered significant hydrocarbon shows and minor oil and gas recoveries have been made from subsequent testing,” the company said.

Other wells drilled in Comet’s permit application areas have also encountered significant hydrocarbon shows.

Galilee’s capital raising is to proceed by way of an issue of a further 614 million ordinary shares in Galilee at an issue price of 0.5c per share.

The CSM exploration program has been designed and will be managed by Dr Read Holland, a recognised leader in the CSM industry and former director of the School of Mines and Energy Development at the University of Alabama.

The conventional petroleum desktop study is being carried out by Holland in association with Dr Jim Applegate, founding director of the Exploration Research Laboratory at the Colorado School of Mines.

Applegate has extensive experience in prospect generation and advanced interpretation both in Australia, the US and other parts of the world.

The CSM exploration program is scheduled to start in mid-June.

In March last year, Galilee began working on a CSM exploration program in central Queensland.

The company holds exploration permits ATP 529P and ATP799P covering about 8000 square kilometres.

Comet Ridge’s permit applications in the basin lie about 600km northwest of Gladstone and cover more 13,000sq.km.

Under the farm-out agreement, farm-in partner Clark Oil will carry Comet Ridge through a multi-year seismic and drilling work program on both permits to earn up to 40% in both permits via a staged work program and up to 75% in a 64sq.km block surrounding any well drilled.

The agreement is subject to Clark Oil successfully listing on the Australian Securities Exchange later this year.

The permits are yet to be formally granted due to the large area of non-exclusive possession tenure acreage in the area.

Clark is to lead negotiation of land access and cultural heritage management agreements with registered Native Title claimants over the permits.