The company will pay Marion $US3.6 million ($A4.9 million) for the additional 15% stake in 185,000 acres in and around the project area, taking its total working interest to 30%.

On February 21, the ASX issued a query to Odyssey after the stock rose 29% from 34c to a high of 44c in less than a week. The ASX queried a section published in the West Australian newspaper, in which Odyssey was named as about to acquire an interest in another US gas project.

Responding to the ASX query, the company said it was unaware of any information that would have caused the share price change.

The petroleum company listed on the ASX in November last year after raising about $A5 million in its initial public offering of 20c per share. Odyssey used some of this capital to acquire a 15% working interest in the Helper Project.

Odyssey technical director Mark O’Clery said the increased 30% interest was a major step forward in the company’s development.

“The board of Odyssey is very excited by this project, which has recently commenced generating cash flows from production at the Kenilworth Railroad-1 and 2 wells,” he said.

“These wells have been tested at a combined flow rate of 2.4 million cubic feet of gas per day, some four times the average for the area.”

In addition, three new wells – Cordingly Canyon 15-1, 15-2 and Ball Park Canyon-1 – have all encountered strong gas shows in the objective section and are now being completed and placed on production.

To help it fund the transaction, Odyssey will place $A3.15 million in unsecured convertible notes at 70c each to institutional and sophisticated investors.

Marion told the ASX the proceeds would be used to accelerate its drilling program, with emphasis on the Clear Creek project. The company plans to drill 35 new wells in Utah, including the Helper project, this year.

Marion chief executive Jeff Clarke said the transaction was a “great outcome” for both companies.

“It provides our company with additional cash reserves to allow it to pursue a number of new opportunities that have been identified in our “crown jewel” Clear Creek (MAE 67.5% working interest) project in central Utah and to undertake a more aggressive drilling campaign in this area,” he said.

“The company is planning to deploy at least three rigs simultaneously in the upcoming drilling program, details of which are currently being finalized.”

The Helper project comprises about 5000 acres along the northern edge of the Helper Field, which is part of the substantial Drunkards Wash complex – the largest producing gas field in Utah.

Odyssey said it will continue to actively assess other new opportunities to develop a portfolio of quality producing and/or advanced exploration projects in the oil and gas sector.