Under the non-binding agreement Viking will look at acquiring an interest in Galilee, a 51% subsidiary of Eastern Corporation, in mid-November this year.
Galilee will maintain the day to day operations of the project.
“The planned investment by Viking is a considerable vote of confidence in the Galilee coal seam methane project as it targets mid to late 2005 for P2 certification for its gas reserves at the Rodney Creek pilot program,” said Eastern chairman Gordon Smith.
In coal news, last week Eastern commenced a drilling program on the Broughton tenement adjoining Rio Tinto’s Hail Creek in a step towards developing a new coal mine.
In New Zealand, the prospect of developing a coking coal mine progressed when a preliminary mine plan was submitted for Whareatea West and discussions with government were scheduled for this month.