The Perth-based junior told the market yesterday that it has agreed the terms with a large US gas transmission company to construct a tap that connects directly into a sales delivery line in eastern Oklahoma.

Construction of the tap, compression facilities and connection to the sales line will enable the development of Red Fork's largest project, the 30,000 acre - 100% owned Eastern Oklahoma project, to be fast tracked, the company said.

Drilling at the project is now scheduled to begin in the first half of 2008 - a full 12 months ahead of schedule.

"This project holds huge potential for the company as this deal is a breakthrough step to unlocking the potentially significant gas reserves we believe are in the Eastern Oklahoma project area," Red Fork managing director David Prentice said.

"Once the tap and related transportation infrastructure are in place and drilling

commences, we are confident we will be able to easily commercialise this project by tying the wells into sales quickly."

Wells drilled in adjacent areas to the Eastern Oklahoma project have yielded natural flow rates between 50,000 cubic feet of gas per day to 1 million cubic feet per day.

The company expects to have the gas transmission facility fully-commissioned during the first half of 2008.

Before this arrangement, Red Fork had planned to construct a 15-mile pipeline through the project area to the nearest transcontinental pipeline, at a cost of $US2 million.

It said this proposal would have delayed development of the project until the second half of 2009.

Red Fork wholly owns three project areas in Oklahoma - Osage, West Tulsa and Eastern Oklahoma - all of which it says are located in established plays with demonstrated production potential.