Karoon told the market today that the acquisition was conditional on approval from the other partner, Talisman Oil & Gas, and the extension of the permit for a further five years.

The company said the AC/P8 permit offered good exploration potential, due to its location in an existing oil and gas producing province.

It is also located near several large producing oil fields including Woodside's Laminara and Corallina fields.

AC/P8 contained two prospects and at least three leads, which Karoon said needed to be defined further before it would make a drilling decision.

"This exciting acquisition represents a major new exploration interest for Karoon and continues the company's strong organic growth," it said.