The acquisition adds to Molopo’s shale gas acreage in Mason County, West Virginia, where it has a 50% stake in 5700 acres.

Under the latest deal, the company will acquire operatorship and an 80% stake in a substantial acreage position from shale gas specialist Republic Energy in the emerging Eastern Canada shale gas play.

Molopo said the shale gas acreage was at an early stage of exploration, while the conventional oil and gas exploration in the area extended back to the late 19th century.

“While a high level of technical risk exists, the project has substantial upside,” the company said.

“It represents a very large acreage position within the Utica and Lorraine shales in eastern Canada, which have a proven hydrocarbon generating potential, and is located in one of the highest priced international gas markets.”

Molopo warned that it was too early to make volumetric and reserve potential estimates for the acreage, but said it was targeting “a large multiple trillion cubic feet gas resource”.

“In addition to the shale potential, the acreage may also contain some small scale conventional gas targets in sandstone and dolomite related structural traps.”

Over the next 12 months, Molopo intends to assess all available data with a view to identifying the most prospective acreage areas for drilling.

Shale gas is viewed as a long-term and high-risk opportunity, however Molopo said that success here could provide resource base exceeding all of the company’s other projects combined.