The company has entered a conditional agreement to acquire the additional 61.5% interest in PEL 238 it did not previously control, from parties associated with managing director Dennis Morton, executive director David King and non-executive director Doug Battersby. The deal is subject to shareholder approval.

Morton told EnergyReview.net earlier this year that the equity was subject to legal dispute from the former US-based operators and could not previously be vended into ESG until free of all outstanding claims. ESG bought the 61.25% equity for 30 million ordinary shares.

When completed, Eastern Star's interest in PEL 238-which contains independently accredited 2P (proven and probable) reserves of 11.3PJs-will increase from 20% to 81.5%. The company is also negotiating with owners of the remaining 18.5% in PEL 238 to acquire their holdings on similar terms.

The 9100 square kilometre license area in the Gunnedah Basin also includes the Bohena and Wilga Park gas fields.

"This move gives Eastern Star Gas shareholders control over a highly strategic exploration area covering 9,100 square kilometres in the Gunnedah Basin and positions the company well to advance its plans for a power station to provide clean energy to the nearby population centre of Narrabri," said Eastern Star Gas chairman, Dr Wyn Davies.

Direct gas sales to local industrial customers are also anticipated following the construction of a 150mm steel pipeline to transport the gas from the Coonarah field to nearby Narrabri.