Figure 7 below shows the location of WA-359-P in the Dampier Basin and its proximity to existing oil and gas fields. For a geological description of WA-359-P see Section 7 of the Information Memorandum.



WA-359-P, in the Dampier Basin offshore from Western Australia, covers an area of approximately 1,200 kms² in water depths of less than 500 metres.

A small 2D seismic survey was recently acquired in the permit.

A wholly-owned subsidiary of MEO, North West Shelf Exploration Pty Ltd, farmed into the Exoil and Cue Energy 50% interests in the permit to earn a 60% interest. This is to be achieved by MEO meeting the Year-3 commitment to acquire 250 line kms of new 2D seismic (now completed) and by funding 90% of the cost of drilling the first exploration well in the permit.

By 31 December 2008, MEO was required to make an election to drill the exploration well in WA-359-P or withdraw from the permit. In Q3 2008, MEO announced that it had granted Resource Development International Ltd (“RDI”) an option to earn a 35% interest in the permit. The proposed farmout by MEO to RDI does not affect the Company’s interest and did not relieve MEO of its obligations to elect to drill a well within the prescribed period. However, Exoil and Cue Energy have agreed to a 12 month deferral of the date by which MEO must elect (or not) to drill the exploration well and fulfil the Year 5 work obligation. In consideration for granting the deferral, MEO is required to reprocess sufficient existing 3D seismic to ‘firm up’ the Hephaestus lead into a drillable prospect.
Included in the terms of the farmout to MEO, the Company is required to make an election of whether to fund 5% of its 20% interest in the well - that election must be made within 90 days of the date that MEO makes its election to drill the well in WA-359-P. If the Company elects not to fund that 5% cost, its interest dilutes to 15% and that 15% is then fully carried through 100% of the cost of the well.

The permit is not subject to Native Title claim.