But Molopo will still keep a 100% interest in the conventional petroleum (non-CSM) rights in the Clarence Moreton Basin permit.

Metgasco will earn a 51% interest in PEL 13, which covers 1654 square kilometres, by funding all costs of drilling one new CSM well and seismic reprocessing.

Once Metgasco has earned 51%, it will have the option to increase its interest to 75% by spending a further A$267,000 in PEL 13, Molopo managing director Stephen Mitchell said.

“Farming-out Molopo’s Clarence Morton acreage to Metgasco, an experienced CSM operator in the region, will allow us to concentrate our resources on the continued development of the Mungi Gas Field in Queensland and the appraisal of our Gloucester Basin interest in NSW,” Mitchell said.

“Despite exploration dating back to the 1960s, the Clarence Moreton basin remains under-explored and has the potential to host both coal seam gas and conventional hydrocarbon accumulations, with earlier exploration identifying a number of structures, which are as yet untested.”