Under terms of the deal, OCA will have an option to drill a wildcat well in Block 2656 of ATP 647P to earn a 50% stake. Currently, QGC holds a 100% in the Block.

"QGC is excited to be involved with OCA in unlocking the conventional gas potential of this Block which would otherwise have little potential from a CBM perspective due to the depth of the coals in the area," said QGC managing director Richard Cottee.

"If successful, the well could be quickly connected into the State's gas network, which is in close proximity."

The Block is located in the western Surat Basin, approximately 3.5km east of the Myall Creek Gas Field and 5km northeast of the Churchie Gas Field.