The takeover will provide European Gas with a maiden gas production of 1.4 billion cubic feet per year.

The Perth-based company said this morning that it had completed the sale and purchase agreement with a subsidiary of the French state-owned coal mining corporation.

Gazonor holds the gas exploitation rights over the Poissonnière and Désirée permits.

These blocks cover 578.6 square kilometres in Nord-Pas de Calais in northwest France, and a 187.5sq.km extension of the Poissonnière permit is under application.

The last coal mines in these areas closed in 1992, but CMM extraction continues.

In the past five reported years to the end of 2006, gas production has averaged 2.9 billion cubic feet per year with an average methane content of 54%.

For 2006, the average methane sale price for Gazonor was €21.70 ($A35.17) per MWh.

An independently certified report estimated the blocks contained 30.6 billion cubic feet of 1P methane reserves, producible over the next 20 years.

But after drilling additional boreholes, the recoverable reserves may be increased to 33.6Bcf methane.

The project also has potential for coal seam methane, which European Gas said it intended to explore.