ERM Gas will earn varying interests in seven permits in the region – EP-389, EP-416, EP-426, EP-430, EP-432, EP-440 and EP-454 – by contributing to the exploration programs planned for each and a $2.10 million cash payment to Empire.

Once this payment has been made, ERMG can decide whether to earn varying interests in the coal seam methane rights in all of the permits, by agreeing to contribute towards a $5.5 million CSM exploration program.

“As a result of this farm-in agreement with ERMG, Empire is pleased to announce that the three seismic surveys in EP-389, EP-416 and EP-432 are now fully funded by farminees and are planned to be acquired during March-April 2008,” Empire said.

“And the Moriary-1 well is now 80 percent funded by farminees and is planned to be drilled during January-February, 2008.”

The farminee will contribute one third of the costs of drilling the Moriary-1 wildcat, in EP-426, in return for a 25% stake in the permit.

In EP-389 and EP-432 it will contribute 30-32% of two 3D seismic surveys, to earn a 12.5% stake in each one.

In both permits, it has the option to increase its stakes by agreeing to contribute towards an exploration well in each.

It will also pay Empire $70,000 to earn a 5% interest in EP-416 contributing to the Wellesley 2D seismic survey.

ERMG will cover all the costs to reprocess and interpret the existing seismic data in EP-430, EP-440 and EP-454 to earn a 12.5% interest in each permit.

It has the option to boost its stake to 50% in each of these by wholly paying to shoot 2D seismic surveys in each of these three areas.