Under the terms of a Farmin Agreement signed in Beijing, CNOOC, advised by Freehills, will acquire a 50 per cent interest in Exoma's 26,840 km² of acreage located in the central Queensland Galilee Basin. The $50 million contribution will go towards exploration and appraisal expenditure during the Farmin Period, expiring in 2013.

Exoma has also granted CNOOC an option to acquire 86.6 million shares of the company at 31.5 cents a share.

CNOOC's investment in the projects will allow Exoma to accelerate its exploration program for its Galilee Basin permits, which are believed to host very large coal seam gas and shale gas resources. Exoma's Chairman, Brian Barker, is confident that the gas resources "will underpin one or more large downstream gas development projects serving both export and domestic gas markets for many years."

The Corrs team was led by partners John Kelly and Jeremy Horwood, with special counsel Paul Careless.

The Freehills team was led by partner Stuart Barrymore with partners Simon Reed and Nick Heggart, along with special counsel Jau-Shi Liew and solicitors James Sippe and Jane Ballard.

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"It is a significant transaction for CNOOC representing the first exploratory higher risk investment in Australia in on-shore unconventional gas, with rights to assume operatorship and the potential acquisition of equity in Exoma," said Barrymore.

"It represents another signal of CNOOC's commitment to participate in the development of Australia's hydrocarbon resources ... The importance of this is evident from the Australian ambassador's participation in the signing ceremony, and highlights the significant bilateral linkages between the two countries."