Landholders began a blockade at the site last month, angry at Santos’ decision to push ahead with pilot work prior to completion of a multi-million dollar water study aimed at determining what impact coal and gas development would have on the region’s underground and surface water aquifers.

Santos claimed it had always made clear that it planned to continue exploration work while the study was being completed and that the pilot work would actually contribute much-needed data towards the study.

However landholders say Santos has now agreed to suspend all exploration until completion of the water study in a deal brokered by local Nationals MP Kevin Anderson yesterday after a week of negotiations.

Caroona Coal Action Group spokesman Tim Duddy described the deal as an “important victory”.

“…but it is really no more than plain common sense should have demanded – that is, mining and CSG exploration should not be allowed to proceed in areas with significant underground water resources until we know what the potential risks are,” Mr Duddy said.

Under the deal, Santos will complete grading works and fencing of the proposed drill site but not continue with plans to drill a pilot well.

The Namoi water study was kicked off in September last year in response to sustained lobbying by landholders wanting to know what impact coal and gas development would have on the region’s underground and surface water supplies.

A final report is due in the first half of next year.