Under the agreement Vintage will earn its share and take over the license as operator by paying a large share of future drilling and development costs, including costs to date.
Reg Nelson's Vintage will fund 65% of the first exploration well drilled, pay $527,800 cash to Metgasco for past license back-costs, and will fund the full carry of $70,000 of 2D/3D seismic reprocessing for the block.
The joint venture will drill its first well in the Vali prospect in the second half of this year.
The farm-in agreement is subject to standard formal conditions including ministerial approval and license registration. Final documentation is expected to be signed by the end of next month.
Metgasco chief executive Ken Aitken said he was pleased to have a joint venture partner "of the calibre of Vintage" for the license.
"Vintage's team is well regarded by the Metgasco board, is highly experienced in exploration and production in the Cooper/Eromanga Basin and have a record of commercial success in this region," Aitken said.
"This farm-in endorses Metgasco's view that ATP 2021 has high exploration prospectivity and the potential to support material hydrocarbon discoveries. We look forward to rapidly progressing plans to drill the Vali prospect."
The Vali prospect has a net P50 best case prospective resource estimate of 26.3 billion cubic feet of gas and a net recoverable P50 prospective resource of 19Bcf.
The Vali prospect has 3D data that has defined anticlinal structure closure at the Patchawarra and Toolachee formations.
The only exploration well drilled in the permit was 2003's Kinta-1 well in 2003, which intersected 37m of net gas pay.
Metgasco has defined one other prospect on the license known as Odin which has a P50 of 8.7Bcf.
Odin's anticlinal structure straddles the boundary of ATP2021 in Queensland and PRL221 in South Australia, with the offset well Strathmount-1 drilled in 1987 in SA intersecting 21 metres of gas sands, with 13.7m of interpreted net gas pay.
Seismic showed the well was drilled outside of structural closure at the Toolachee and lower Patchawarra levels.
Metgasco was unchanged this morning at 4.6 cents per share. Vintage shares were worth 13cps.