(Adds minister's comment, details of judgment; paragraphs) An...

(Adds minister's comment, details of judgment; paragraphs)

An Australian court declared void on Thursday grants the federal government made to a subsidiary of Empire Energy Group (EEG) for exploration drilling in the Beetaloo shale basin in the Northern Territory, but allowed them to be re-issued.

The grants can be re-issued by Resources Minister Keith Pitt as the court rejected challenges to the government's Beetaloo drilling grants programme and approvals for Imperial Energy's drilling under the scheme.

"This is a commonsense decision that will allow grants for the development of the Beetaloo Basin to proceed," Pitt said in a statement.

The programme had the potential to deliver thousands of jobs and billions of dollars in economic activity in Australia's remote Northern Territory, he added.

Empire Managing Director Alex Underwood was not immediately available to comment on the court's ruling.

The court voided A$21 million ($15 million) in grants to Imperial Energy, saying their issue was "unreasonable or capricious" at a time when it was considering a challenge by the Environment Centre NT Inc against the Beetaloo programme and the Imperial approvals.

However it rejected Environment Centre NT's arguments that the government should have weighed the impact on climate change and on Australia's ability to meet carbon emissions targets before setting up the programme.

Justice John Griffiths said those were not factors the government needed to consider, as the programme and the grants were for exploration drilling and not gas production.

Empire is one of several companies, including Santos Ltd (STO) and Origin Energy (ORG) , that are exploring shale acreage in the Northern Territory, which is estimated to hold 200 trillion cubic feet of shale gas resources.

Empire's shares were put on a trading halt on Thursday pending the decision. ($1=A$1.3866)