Deal stalls as miners talk

A court dispute between Gingin farmers Gavin and Sheila Drew and Empire Oil and Gas (Empire) could still go ahead after a land purchase settlement was stalled by negotiations between Empire and a neighbouring miner.

Empire this month agreed to purchase 200 hectares of the Drews' land to produce natural gas.

The deal, which came after an eight-month fight and would have prevented a court hearing, was expected to be finalised by June 15.

However, Empire hit a hurdle this week after the settlement was delayed by its discussions with mineral sands explorer Image Resources.

Image Resources has access rights to a parcel of the Drews' land through which Empire plans to construct a pipeline easement.

Empire managing director Craig Marshall confirmed the purchase was being held up by negotiations between his company and Image Resources.

Time is running out for Empire to finalise land access issues because the company's Department of Mines and Petroleum licence expires at the end of the month.

In a statement to the ASX, Empire said it expected the negotiations to be finalised by the end of this week and the deal to be signed next week.

Image Resources earlier this year obtained agreement to an option to purchase about 300ha of the Drews' property if its drill results were successful.

Image executive director George Sakides did not want to comment on negotiations with Empire but said that parcel of land held promise for his company.

A court hearing to reach a compensation agreement was scheduled for May 31 but adjourned until today.

Lawyer for the Drews, Philip Brunner, said if Empire did not sign off on the land purchase deal by today the matter would go to Midland Magistrate's Court.

"The matter is due back in court and if the issue isn't resolved between Empire and Image, the court may be forced to make a decision," he said.

Mr Brunner said if the case between Empire and the Drews did get to court, he would most likely seek further adjournment to alter his case.

He said land access and trespass issues raised in the initial case against Empire would probably be withdrawn if the matter proceeded past today.

Mr Drew said the matter was out of his hands but he expected an agreement to be signed off in the next fortnight.