Having signed an option agreement for the interest, Pure and Comet agreed that the acquisition had the potential to generate up to $8 million in royalty revenue.

“[But] based on current contracted sales volumes it will take many years to receive the full $8 million,” Comet said, before adding that it plans to use the funds to advance its US exploration projects.

“The immediate focus is to advance the Gray’s Harbor and Cedar Creek/Vader projects in the Pacific Northwest and the Tow Creek, Bear River and Florence prospects in the Rockies,” it said.

Meanwhile, Pure said the royalty interest would generate cash flow to underpin the development of its Bowen Basin and Tasmania CSM assets.

“With Arrow ramping up production at Tipton West in conjunction with their recent increase in base contract to supply 10 petajoules per year, a put option to potentially take this to 17PJ per year, proposed reserve additions and upward pressure on gas prices, we believe the purchase represents excellent value to our shareholders,” Pure managing director Steve Beardsall said.

Tipton West is operated by Arrow, which is a cornerstone investor and major shareholder in Pure and has a 60% stake, while Beach Petroleum holds the remaining 40%.

If the option with Comet is exercised, Pure will acquire the royalty over CSM sales from the project and associated permits – ATP’s 683, 689 and PL 198, located in southeast Queensland.

Pure said it would pay for the interest with funds from a recent $5.25 million share placement, the remainder of which would help accelerate the appraisal and development of its Bowen Basin tenements and for use as general working capital.

“The placement attracted a quick book-build of firm bids, indicating the continued strong interest and market support for Pure’s existing projects and development plans,” Beardsall said.

In addition, the company now intends to proceed with a share purchase plan to raise a further $2 million.