If the sale is successful, Golden Dynasty will own 100% of the drilling company, having now completed its earlier agreement to buy an 80% stake.

Subject to Toronto Stock Exchange approval, the company will acquire the final 20% stake in exchange for 8 million of its shares, worth $440,000.

Terratek is the holder of the exploration permit EP 129 and production licenses L6 & L8, covering 1470 square kilometres of the Canning Basin and owns the rights to an oil spill technology, known as the Kolascai Oil Solidification Process.

European Gas told the market this morning that the sale of Terratek would allow it to focus on developing coal seam methane projects in Europe, while maintaining strong leverage in the Canning Basin through royalties and shares.

“Golden Dynasty has achieved its 80% interest in Terratek after the drilling of the Boundary SE-1 well and the Scrubby-1 well, which were both plugged and abandoned,” European Gas said in a statement.

“Subsequently, European Gas decided that it would not contribute to ongoing expenditure leading to the decision to sell its 20% equity interest rather than dilute its interest.”

Meanwhile, Golden Dynasty told the TSX that it was motivated into acquiring 100% of Terratek after it was awarded additional acreage, in an area known as LO5-7, by the Australian Department of Industry and Resources.

“The acquisition of 100% of Terratek is a logical move for Golden Dynasty due to our increasing acreage in the Canning Basin, as we are confident in the future exploration potential that exists in the area,” company chairman Paul Ray said.

“Another benefit of the acquisition is the increased revenue that existing production provides, which will now flow to the company.”

The L05-7 project adjoins EP 129 to the northwest and consists of 34 blocks covering 2782sq.km. Located on the Lennard Shelf, L05-7 has a thinner sedimentary section than EP 129. Petroleum trap styles in the area include fault-controlled anticline, flower structures and drape closures over reef structures.

Golden Dynasty says it plans start a workover program later this year, in addition to re-processing the extensive data inherited from the acquisition to work up a future drilling program.