Oil and gas explorer Metgasco (ASX: MEL) has found a partner to start drilling its gas prospects on the Queensland side of the Cooper Basin.

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The company has signed a binding head of agreement with Vintage Energy (ASX: VEN), which will run operations at the site in return for a 50 per cent interest.

The announcement didn’t make a big ripple in markets, with shares of both companies unchanged in morning trade.

Finding a match

Metgasco has been on the hunt for a drilling partner since last September, when it uncovered two prospects — christened Vali and Odin — in the ATP 2021 block of the Cooper Basin.

The project is located 5km from transport infrastructure, in a mineral-rich area where nearby commercial gas fields have already produced 600 billion cubic feet (Bcf) of gas.

In return for its 50 per cent stake, Vintage will take on 65 per cent of the drilling costs for the first well, up to a total of $5.3m. The company will also cover 65 per cent of past exploration costs equal to $527,800.

“Vintage will also fund up to $70,000 of 2D and 3D seismic reprocessing to better define exploration leads,” the company said.

“The ATP 2021 farm-in is an excellent fit for Vintage mainly due to our technical team’s experience in exploring, appraising and developing oil and gas assets in the Cooper/Eromanga Basins,” Vintage MD Neil Gibbins said.

At their current price of 4.6 cents, shares in Metgasco are down from their 12-month high of 7.5 cents reached in October last year. It’s a similar story for, which has fallen from 24 cents to 13 cents over the same timeframe.

In other ASX energy news today

The Gina Rinehart-backed Lakes Oil (ASX: LKO) had some positive news for the market yesterday concerning one of its legal disputes. The company announced that the pending cancellation of its PPL550 exploration licences in Papua New Guinea has now been revoked by a local judiciary.

Legal proceedings have now been adjourned until June 7, where Dondonald Limited — a Lakes Oil subsidiary — will be seek to be compensated for time lost. “PPL 560 contains highly promising exploration targets,” Lakes Oil Chairman Chris Tonkin said.

Shares in the company were unchanged at just 0.01 cents.