It had previously had an agreement to acquire 75 per cent of the permit.

As was previously announced in April last year, QGC had the option of drilling up to three wells in ATP 647P in order to earn a 75% interest. Within 90 days of QGC earning an interest, its joint venture party, Starzap, had the option of converting its remaining interest into a 5% overriding royalty.

By acquiring the permit for $500,000 from Starzap, QGC no longer has any obligations under the farmin agreement. It is expected the first exploration well will be drilled in ATP 647P in December 2001. Potential recoverable gas reserves are estimated at 350 billion cubic feet.