The Perth-based company, which has spent the past two years re-working old oil fields in Kentucky, said the agreement over its Greenough permit was cancelled by Eneabba due to ongoing native title negotiations.

But Westralian said these negotiations appeared to be nearly resolved.

"Ironically the most recent round of negotiations with the Native Title groups and their legal representatives has resulted in what Westralian now believes to be the final set of conditions under which the parties can move forward and finalise an agreement in the near future," the company said.

Westralian said it would renew its assessment of the area for its potential for conventional hydrocarbons, coal seam methane and in-situ gasification of the coals.

"The location and size of this permit in a known hydrocarbon province makes it a

valuable asset in the company's portfolio of properties," the company said.

Westralian said it believed growing regional demand had increased the significance of the permit.

"With the increased focus by industry on the Mid-West of Western Australia new energy sources will be required to fuel this growth," the company said.

"The company has recently been approached by several parties with a view to fuelling this expansion in the Geraldton region."