Magellan Petroleum Australia and Santos Offshore have agreed to extend the closing date of the sale of Santos’ 40% stake in the Evans Shoal gas field, offshore Austalia’s Northern Territory.

The gas field, which is located 325km north-west of Darwin, is estimated to contain seven trillion cubic feet of recoverable gas reserves.

The extension will allow Magellan to continue to obtain the customary approvals to complete the transaction as stated in the Evans Shoal Agreement dated 25 March 2010.

The agreement, which was amended last month, provides an extension of the transaction through to May this year, with a $10m additional contribution towards the original closing payment.

Magellan said that methanol production is the best development option for the field, given the high CO2 content of Evans Shoal gas.