Company director Stephen Warrener said the MoU consisted of three major components and represented an important development for the company's exploration efforts in California.

"The MoU, which includes Matris injecting $4.3-million into the project areas, greatly increases the scale of project opportunities and the quality and quantity of exploration targets within Orchard Petroleum portfolio.

The second agreement under the MoU, means OPL will gain a 50% operating interest in a new gas project area known as the Forbes Play.

OPL and Matris will also gain access to around 30,000 acres of proprietary 3D over the region owned by Nahabedian Exploration. This 3D seismic, combined with the acquisition of a further 30,00 cares, is expected to delineate more than 50 prospects for the venture.

As a final component of the MoU OPL will vary its interests in the existing projects of the Bakersfield Arch Play (BAP) and the San Joaquin Valley Play (SJVP).

OPL's interest in the BAP will increase from 25% to 33.3% and decrease from 50% to 33.3% in SJVP. Matris and Nahabedian Exploration will acquire a 33.3% interest in both projects.