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QUEBEC - The already sky - high stock of Junex Inc. (TSXV:JNX) gained another 27 per cent Wednesday after the junior exploration company announced it has agreed to settle a dispute over its drilling rights in the vicinity of a potentially major new natural gas play.

Junex shares traded as high as $4.34 - a record - in moderately heavy volume at the TSX Venture Exchange. They gave up some of their early gains but were still up 92 cents or 25 per cent at $4.22 with more than 2.5 million shares exchanged

The stock had been trading well below $1 earlier this year until last month, when Denver-based Forest Oil announced a "significant" gas discovery in the Utica Shale between Montreal and Quebec City.

Forest Oil has accumulated 109,000 net hectares under lease or farmout, meaning it has access to or can acquire rights to the gas under various agreements with several companies, including Junex.

Junex announced Wednesday that it has signed a letter of intent to settle litigation regarding a drilling permit for the Nicolet property which covers 22,000-hectares (54,363 acres).

In accordance with the out-of-court settlement, Junex will now be able to earn a 50 per cent interest in the Utica and Lorraine Shale sections of the Nicolet property by drilling to two exploration wells within 18 months.

"We are pleased that this settlement will allow us to clarify our rights concerning a permit located in the heart of the recent developments that occurred in the Utica Shale. We believe that this agreement will allow us to define the potential of this permit and to create value for our shareholders" said Junex president Jean-Yves Lavoie.

Although its share price has more than tripled in a matter of weeks, Junex has a relatively small market value at about $150 million.

One of Canada's largest oil and gas companies, Talisman Energy Inc. (TSX:TLM), said this week it will be investing in pilot projects this year in the St. Lawrence Lowlands. Talisman has a market value of more than $26 billion.