Under the deal, Westside will earn a half-stake in ATP 688P (Tilbrook), ATP 693P (Cullin), ATP 769P (Paranui) and ATP 811P (Foxleigh).
WestSide also has the right to purchase the initial 250 billion cubic feet of gas produced from the permit areas to satisfy its anticipated energy requirements for fertiliser production.
Sunshine retains the right to independently sell its share of any gas over and above the initial contracted 250 billion cubic feet (Bcf).
WestSide plans to build a 1000 tonne per day ammonia plant in the Gladstone vicinity to use existing port infrastructure. The company has said it believes the ammonia market will continue to strengthen in the region as demand for ammonia nitrate increases along with the demand for ammonia-based fertilisers.
Sunshine plans to use the funds from the transaction to accelerate the Paranui and Tilbrook fields towards reserves certification and then production.
In addition, the Brisbane-based company said the deal allows it to concentrate on its near-term oil and gas projects both in Queensland and the United Kingdom.
The agreements are subject to ministerial approval and are also conditional to WestSide successfully listing on the Australian Stock Exchange under its proposed initial public offer in the last quarter of 2006.
Sunshine said the joint venture agreement was a suitable investment for WestSide, as the permits were located near both current and future pipeline infrastructure.
One field within ATP769 (Paranui) has been drilled and produced gas in 1996, while two other permits within the Sunshine Gas acreage have been drilled, with one intersecting coal seams greater than 10m.
WestSide is a fertiliser company focused on developing upstream gas reserves to support its downstream ammonia operations within Australasia. It has already participated in major ammonia and urea projects in South-East Asia and is now looking to replicate its operations in Queensland.