Commercial reserves of CBM is a critical element in delivering gas under a bankable sales contract, which Queensland Gas hopes to finalise by the end of this year.

QGC said it has identified its capital needs to reach the certified reserves stage and is in discussions with a number of parties interested in taking a position with it. "Negotiations for a substantial placement to an equity investor are well advanced," the company said.

QGC had previously hoped that its funding needs would be met via an equity raising with German-based outfit RAG Coal International and iron ore player Portman Ltd. However RAG got involved in a takeover while Portman decided to concentrate its focus on the iron ore business.