ACCESS AGREEMENT

                                BETWEEN

           YANKUNYTJATJARA COUNCIL (ABORIGINAL CORPORATION)

                                  AND

         ANTAKIRINJA LAND MANAGEMENT (ABORIGINAL CORPORATION)
                                  AND

                              PADDY JONES
                              JEAN WOODS
                              TILLY WAYE
                             SADIE SINGER
                             LALLIE LENNON
                            JOHNNY CULLINAN

                                  AND

                      WILLIAM HERBERT LENNON SNR.
                            EILEEN CROMBIE
                              IAN CROMBIE
                              KEITH SMITH

                                  AND

                     HEMLEY EXPLORATION PTY. LTD.



                             prepared by:

            PITJANTJATJARA COUNCIL INC. (LEGAL DEPARTMENT)
                          3 Wilkinson Street,
                             P.O. Box 2189
                       ALICE SPRINGS, N.T. 0870

                         Phone: (08) 8950 5419
                         Fax: (08) 89 52 3261



<PAGE>



                               CONTENTS


Page 2             Recital

CLAUSE
1.                 Definitions

2.                 Interpretation and Other Matters

3.                 Consent

4.                 Undertaking

5.                 Initial Survey of License Area by Explorers

6.                 Consideration Given by the Explorers

7.                 Notification of Operations

8.                 Land Entry and Occupation

9.                 Identification

10.                Petroleum Operations

11.                Scouting Teams

12.                Screening and Clearance

13.                Effect of Operations on the Environment

14.                Advisory Committee

15.                Removal of Employees

16.                Instruction in Aboriginal Culture

17.                Explorer Covenants

18.                The NTPs Covenants

19.                Rights of Traditional Owners

20.                Rights of Explorer

21.                Reversion of Infrastructure

22.                Indemnity


<PAGE>




23.                Field Development and Production

24.                Petroleum Production License

25.                Force Majeure

26.                Assignment

27.                Operations

28.                Confidential Information

29.                Termination

30.                Termination of Activities

31.                Consequences of Termination

32.                Costs and Payments

33.                Disputes

34.                Term

35.                Variation

36.                Further Assurance

37.                Notices

                              Schedule 1
                    Description of the License Area


                              Schedule 2


                              Schedule 3
    Payments to the NTPs pursuant to Clause 6.1.3 of the Agreement
           in respect of Petroleum Operations under the PEL

                              Schedule 4
    Payments to the NTPs pursuant to Clause 6.1.4 of the Agreement
           in respect of Petroleum Operations under the PPL


<PAGE>



                               AGREEMENT


THIS AGREEMENT is made the 1st day of May 1998

BETWEEN:

YANKUNYTJATJARA COUNCIL (ABORIGINAL  CORPORATION):  an Association  incorporated
pursuant to the  provisions of the Aboriginal  Councils & Associations  Act 1976
(Clth) and having its principal office at 3 Wilkinson  Street,  Alice Springs in
the Northern Territory of Australia, of the first part.

-AND-

ANTAKIRINJA LAND MANAGEMENT (ABORIGINAL CORPORATION) an association incorporated
pursuant to the  provisions of the Aboriginal  Councils & Associations  Act 1976
(Clth) and having its principal office at Umoona Community Council,  Family Care
Workers Office, Coober Pedy in the State of South Australia, of the second part.

-AND-

PADDY JONES,  JEAN WOODS,  TILLY WAYE,  SADIE  SINGER,  LALLIE LENNON AND JOHNNY
CULLINAN the  registered  Native Title  Claimants on behalf of all the Claimants
referred  in the  Application  for Native  Title  Determination  known as SC97/9
lodged 21st November 1997 by  Aboriginal  Legal Rights  Movement Inc. of 321-325
King William Street Adelaide in the State of South Australia of the third part.

-AND-

WILLIAM  HERBERT LENNON SNR. EILEEN  CROMBIE,  IAN CROMBIE,  and KEITH SMITH the
registered Native Title Claimants on behalf of all the Claimants  referred to in
the  Application  for Native  Title  Determination  known as SC95/7  lodged 14th
November 1995 by Aboriginal  Legal Rights  Movement Inc. of 321-325 King William
Street, Adelaide in the State of South Australia, of the fourth part.

[the   parties   of  the  first  to  the   fourth   parts   hereinafter
collectively referred to as the Native Title Parties [ N.T.Ps j

-AND-


                                 - 1 -


<PAGE>


HEMLEY EXPLORATION PTY LTD (ACN 073 039 059) a body incorporated pursuant to the
lncorporation's  Law having  its  principal  office at ECH  House,  Suite 3, 174
Greenhill Road, Parkside in the State of South Australia  ("hereinafter referred
to as the Explorer") of the fifth part.

WHEREAS:-

A.    Yankunytjatjara  Council  (Aboriginal  Corporation)  is an Association the
      Objects  and Rules of which  include  the  protection  of the  culture and
      heritage of the Traditional Lands of its members.

B.    Antakirinja Land Management (Aboriginal Corporation) is an Association the
      Objects  and  Rules  of  which  include  the  pursuit  of a  Native  Title
      Determination  and the  protection  of the  culture  and  heritage  of the
      Traditional Lands of its members.

C.    On the  23rd  day of May  1996  the  Explorer  was  granted  by the  South
      Australian  Minister  for  Mines &  Energy  under  the  provisions  of the
      Petroleum   Act  1940  (SA),   Petroleum   Exploration   License   No.  63
      ("hereinafter  referred  to as  the  'tenement")  which  is  located  over
      portions of Pastoral  Leases  known as Lambina,  Welborne  Hill,  Wintinna
      West,   and  Mt  Willoughby  as  well  as  a  portion  of  the  Tallaringa
      Conservation Park.

D.    The Traditional  Lands are areas where the Native Title Parties  currently
      exercise native title rights includes the area boarded by the tenement.

E.    The NTPs believe that the grant of the tenement gave the Explorer no right
      to carry out Petroleum Operations on it as Sub-division B of Division 3 of
      Part 2 of the Native Title Act 1993 (CLTH) has yet to be complied with.

F.    Without waiving any other rights the NTPs may possess against the State of
      South  Australia  for failure to comply with the  provisions of the Native
      Title Act 1993  (CLTH) the NTPs enter into this  Agreement  in lieu of any
      other  agreement  they may have  entered into  pursuant to the  procedures
      under the Native Title Act 1993 (CLTH).

G.    The  parties  having  negotiated  in good faith  intend that this
      Agreement shall:-

     (a)  provide the terms and  conditions  under which the Explorer can access
          the tenement for the purpose of carrying out Petroleum Operations;

     (b)  provide an  undertaking  by the NTPs not to challenge  the validity of
          the grant of the tenement by the Minister for Mines & Energy Resources
          (SA) or the validity of the  Explorer's  right to carry out  Petroleum
          Operations  unless  there  is a  breach  of  the  provisions  of  this
          Agreement; and

     (c)  provide the  methodology  for the protection of sites of spiritual and
          cultural  significance  to the NTPs and the  protection  of sites  and
          objects under the Heritage Act 1988 (SA).

H     THE  EXPLORER'S  OBLIGATIONS  UNDER THIS  AGREEMENT ARE NOT DEPENDENT UPON
      NTPS ESTABLISHING NATIVE TITLE OVER THE TENEMENT OR HAVING A DETERMINATION
      OF NATIVE TITLE MADE BY THE NATIONAL  NATIVE TITLE  TRIBUNAL,  THE FEDERAL
      COURT OR ANY OTHER COURT OF COMPETENT JURISDICTION.

                                 - 2 -


<PAGE>



I.    The land covered by the tenement is included in Applications  for a Native
      Title  Determination  (SC 95/07)  lodged with the  National  Native  Title
      Tribunal on the 14th  November  1995 and accepted on the 29th August 1996,
      and ( SC 97/9) lodged on the 21st November 1997.

J.    NTPs having used all reasonable endeavors to identify all persons who hold
      or who may hold native  title  rights in relation to the License  Area and
      having  consulted  with those  persons,  act with their  authority for the
      purpose of entering into this Agreement.

K     SHOULD THE COMMONWEALTH NATIVE TITLE ACT OR COMPLEMENTARY SOUTH AUSTRALIAN
      LEGISLATION  BE AMENDED  TO PROVIDE  FOR THE  REGISTRATION  OF  AGREEMENTS
      BETWEEN THE  CLAIMANTS OR HOLDERS OF NATIVE  TITLE AND THIRD  PARTIES WITH
      ANY  PROPRIETORIAL  RIGHTS ON NATIVE TITLE  CLAIMED LAND,  THIS  AGREEMENT
      SHALL  BE  REGISTERED  AS IS,  OR,  IF IT  REQUIRES  AMENDMENT  TO  ENABLE
      REGISTRATION. THE PARTIES AGREE TO AMEND THE AGREEMENT ACCORDINGLY.

NOW THIS AGREEMENT WITNESSES as follows:

1.    DEFINITIONS

           In  this  Agreement  unless  the  context,  otherwise  requires,  the
           following words and expressions shall have the following meanings:

the Advisory Committee       means  the  Advisory  Committee  constituted
                             under Clause 14 hereof;

Areas of Significance        means  any  site  on the  tenement  that  is
                             identified  by the Scouting Team as being of
                             cultural,  social or spiritual  significance
                             to the  Traditional  Owners  of those  areas
                             and  includes  any   "Aboriginal   site"  as
                             defined by the Aboriginal  Heritage Act 1988
                             (South   Australia)  and  any   "significant
                             aboriginal   areas"   as   defined   in  the
                             Aboriginal   and  Torres   Strait   Islander
                             Protection Act 1984 (Cwth);

the Explorer                 means  Hemley  Exploration  Pty Ltd [ACN 073
                             039 0591 and includes any assignee  pursuant
                             to Clause 26.

License                      means,   as  the   context   requires,   the
                             petroleum   exploration   license  known  as
                             Petroleum  Exploration License No.63 granted
                             by the  Minister for Mines and Energy on the
                             23 May 1996  covering the area  described in
                             Schedule   1   hereto   and  any   petroleum
                             production   license  or  pipeline   license
                             issuing   therefrom  and  any  renewals  and
                             extensions of the same;

License                      Area means the area more particularly  described in
                             Schedule 1 hereto,  and  subsequent to the grant of
                             the petroleum  production license, the area for the
                             time being the  subject  of the  License as defined
                             herein;


                                      - 3 -

<PAGE>

License                      Year  means  such  twelve   calendar  month  period
                             commencing  on the  date  of  grant  of the PEL and
                             thereafter on each  subsequent  anniversary  of the
                             date of such grant.

Native                       Title Parties (NTPS) means the parties of the first
                             to fourth parts described  hereto and shall include
                             members of the Yankunytjatjara  Council (Aboriginal
                             Corporation),   and  Antakirinja   Land  management
                             (Aboriginal Corporation);

"native title"               has  the  same   meaning  as  that  term  is
                             defined in the Native Title Act 1993 [Clth]

the Minister                 means the  Minister  of Mines and Energy for
                             the  State  of  South   Australia,   or  his
                             successor;

the Operator                 means  Hemley  Exploration  Pty  Ltd  or any
                             additional or substituted  operator approved
                             by the NTPs under Clause 30 hereof;

Operational                  Area means any part of the License  Area upon which
                             from time to time under the terms of this Agreement
                             the  Explorer  propose  to carry  out or carry  out
                             Petroleum Operations;

PEL                          means Petroleum  Exploration  License No. 63
                             described  in  Schedule  1  hereto  and  any
                             renewals and extensions of the same;

PPL                          means any one or more petroleum  production license
                             or  pipeline  license  for which the  Explorer  may
                             apply and be granted  covering  an area  within the
                             area   described  in  Schedule  1  hereto  and  any
                             renewals and extensions of the same;

Petroleum                    has  the  same  meaning   assigned  to  that
                             expression in the Petroleum  Act.  Where the
                             term  "Petroleum"  is used  herein  it shall
                             include each and all constituents thereof;

the                          Petroleum Act means the Petroleum Act 1940 of South
                             Australia as amended or any  enactment  substituted
                             therefore   together  with  any   regulations   and
                             subordinate legislation made thereunder;







                                 - 4 -


<PAGE>



Petroleum Operations         means  operations  carried out  pursuant to,
                             or for the purpose of giving  effect to, the
                             License and,  without limiting the foregoing
                             shall   include,    drilling,    geological,
                             geophysical     and    other     exploration
                             activities,       and       the-development,
                             production,  gathering, separating, pressure
                             maintenance,      dehydrating,      heating,
                             treating,       processing,        handling,
                             transportation,  fractionation,  storage and
                             marketing  of  Petroleum  produced  or to be
                             produced  from the License  Area,  including
                             but not limited  to, the  design,  capacity,
                             installation,     operation,    maintenance,
                             repair  and  replacement  of all  facilities
                             required;

Scouting Team                means the  persons  referred to in Clause 11
                             hereof;

Seismic Lines; access road
 corridor                    means a corridor of 100 meters on either side
                             of a proposed or  existing  seismic  line  or
                             access  road  which  has  been  screened  and
                             cleared  in accordance with Clause 12 hereof;

to transfer                  means to sell, assign,  transfer,  convey or
                             otherwise   dispose   of;  and   "transfer",
                             "transferred"   and   "transferring"    have
                             corresponding meanings

Traditional                  Lands means that area of land situated within
                             the State of South Australia and included 
                             within Applications for a Native Title 
                             determination

Traditional                  Owner in relation to the Operational Area means
                             an Aboriginal person who has, in accordance with
                             Aboriginal tradition, social,   economic   and
                             spiritual affiliations with and responsibilities
                             for, the Operational Area or any part of it;

Work Site                    means  any camp site or other  living  area,
                             air strip,  water bore site or drill site in
                             the   License   Area   which  the   Explorer
                             pursuant  to the  terms  of  this  Agreement
                             propose   to   locate   or   locate   in  an
                             Operational  Area  and  includes  any  other
                             area in the  License  Area  (other  than the
                             proposed  or  actual  location  of a seismic
                             line or access  road) in which the  Explorer
                             pursuant  thereto  proposes  to carry out or
                             carry out Petroleum Operations.

2.    INTERPRETATION AND OTHER MATTERS


     2.1  The Recitals and the  Schedules to this  Agreement  shall be deemed to
          form part of this  Agreement  and shall be used in its  interpretation
          and construction.


     2.2  Unless the contrary intention appears in this Agreement-

                                 - 5 -


<PAGE>



          2.2.1 monetary references are references to Australian currency;

          2.2.2 a reference to an act or regulation  includes any  amendments to
                that act or  regulation  for the time being in force and also to
                any act or regulation passed in substitution therefore;

          2.2.3 the singular  includes  the  plural  and vice  versa  and  words
                importing  the  masculine  gender include the feminine or neuter
                gender;

          2.2.4 a reference to a person includes a firm,  company,  corporation,
                authority or body whether incorporated or not;

          2.2.5 reference to a Minister, Department,  authority,  body or person
                includes the Minister, Department, authority, body or person for
                the  time  being  performing  the functions  of  such  Minister,
                Department, authority,  body  or  person  at the  date  of  this
                Agreement; and

          2.2.6 a reference to the Explorer includes  the  employees,  servants,
                agents, contractors and  sub-contractors of the Explorer engaged
                for the purposes of the Petroleum Operations and their permitted
                invitees  and any  obligation or duty  imposed upon the Explorer
                shall, where the Explorer  have engaged an agent,  contractor or
                sub-contractor to undertake  any activity  which the Explorer is
                required or authorized  to undertake  under this  Agreement,  be
                construed as an obligation  or duty upon the Explorer to procure
                that  its agent,  contractor  or  sub-contractor  performs  that
                obligation or duty.

     2.3  The  headings  in this  Agreement  shall not be deemed to be a part of
          this  Agreement  and  shall  not  be  used  in its  interpretation  or
          construction.

     2.4  This Agreement  shall be governed by and construed in accordance  with
          the laws of the State of South Australia and each party hereby submits
          to the  jurisdiction of the  appropriate  courts of that State and the
          Commonwealth and any Courts competent to hear appeals therefrom.

     2.5  The Clauses in this  Agreement  shall  prevail  over any  inconsistent
          provisions in any Appendix or Schedule to this Agreement.

     2.6  No modification,  variation or amendment to this Agreement shall be or
          any force unless in writing and executed by each party.

     2.7  No waiver by a party of any of the provisions of this Agreement  shall
          be binding  unless made in writing and any such  waiver  shall  relate
          only to the specific  matter,  non-compliance  or breach in respect of
          which it is given  and  shall  not  apply to any  subsequent  or other
          matter, non-compliance or breach.

     2.8  This  Agreement  shall be binding upon and enure to the benefit of the
          parties and their respective successors and permitted assigns.

                                 - 6 -

<PAGE>



     2.9  Each party  agrees to execute  such  deeds and  documents  and do such
          further  acts and things as shall be  necessary to give effect to this
          Agreement.

     2.10 If any court or other competent authority declares,  or if any statute
          or regulation  renders any part of this Agreement  ineffective,  void,
          voidable, illegal or unenforceable or if by reason of a declaration by
          any Court or other  competent  authority or any statute or  regulation
          this Agreement would, if any part hereof were not omitted herefrom, be
          ineffective, void, voidable, illegal or unenforceable then:

          2.10.1  that  part   shall,   without   in  any  way   affecting   the
                  effectiveness,  validity,  legality  or enforce ability of the
                  remainder of this Agreement, be  severable  herefrom  and this
                  Agreement shall be read and construed and take  effect for all
                  purposes as if that part were not contained herein; and

          2.10.2  the parties shall attempt to renegotiate, in good faith,  that
                  part.

3.    CONSENT

     Subject to the  provisions of this  Agreement  and in  particular  Clause 4
     hereof, the NTPs hereby grant their permission to the Explorer to carry out
     Petroleum  Operations under and in accordance with this Agreement upon that
     part of the License Area, situated on the Traditional Lands.

4.    UNDERTAKING

     Having used their best endeavors and having acted with the authority of all
     those  holders or  potential  holders  of native  title as  referred  to in
     Recital  J, the NTPs  undertake  that  should  any other  person,  group or
     association lodge an Application for a Native Title  determination the NTPs
     shall use their best endeavors to:-

     (a)  bring this Agreement to the attention of such applicant; and

     (b)  have such  applicant  sign an Annexure to this  Agreement  binding the
          applicant to its terms and conditions  including an  acknowledgment of
          the intent of this Agreement as referred to in recital H.

5.    INITIAL SURVEY OF LICENSE AREA BY EXPLORERS

     5.1  It is  acknowledged  between the parties that at the date of execution
          of this Agreement the Explorer has not been afforded an opportunity to
          enter upon the  tenement for the  purposes of  undertaking  an initial
          survey ("the Survey") of the License Area.

     5.2  Notwithstanding the provisions of this Agreement relating to screening
          and clearing of Operational Areas, the NTPs acknowledge that, in order
          to efficiently  carry out the purposes of this  Agreement,  it will be
          necessary  for the  Explorer to enter onto the tenement to undertake a
          detailed  Survey of the License  Area and the  parties  agree that the
          conditions contained in Clause 12 hereof do not apply to the Survey

                                 - 6 -

<PAGE>



     5.3  Within  twenty  one days of the  execution  of this  Agreement  by all
          parties,  the Explorer  shall,  pursuant to this Clause 5, provide the
          NTPs with sufficient  details of the proposed Survey to allow the NTPs
          to determine whether a Scouting Team or

          Liaison Officer will be required in order for  the  Explorer to  carry
          out any part or parts of the survey.

6.    CONSIDERATION GIVEN BY THE EXPLORERS

     6.1  in  consideration  for the  permission  hereby  granted by the NTPs in
          respect of the  carrying out of  Petroleum  Operations  in the License
          Area, the Explorer hereby covenants that:

          6.1.1 the Explorer shall grant to the NTPs such rights and  privileges
                as set out in this Agreement; and

          6.1.2 subject  to compliance  on the  part  of  the  NTPs  with  their
                obligations hereunder,  the Explorer  will comply with the terms
                and  conditions on its part  herein  contained  and  shall  make
                payments  to the NTPs of the  amounts  to  which  the  NTPs  are
                entitled from time to time as provided in this Agreement;

          6.1.3 subject to Clause 6.1.2 the Explorer shall make  payments to the
                NTPs in relation to Petroleum  Operations  carried  out pursuant
                to the PEL in accordance with Schedule 3 hereto;

          6.1.4 subject to Clause 6.1.2  where a PPL is applied  for and granted
                under Clause 24 herein, the Explorer  shall make payments to the
                NTPs in relation to Petroleum Operations carried out pursuant to
                the PPL in accordance with Schedule 4 hereto.

     6.2  In the  event  that at the  time a  Petroleum  Production  License  is
          granted to the Explorer there is:

          6.2.1. a native title  claimant[s]  who has not become a party to this
                 Agreement; and

          6.2.2. no  determination  of  native  title  in  relation  to the land
                 covered  by the Petroleum Production  License  by the  National
                 Native Title Tribunal, Federal Court of Australia, or any other
                 relevant  court with competent jurisdiction;  then the Explorer
                 shall execute a trust deed ('the Trust Deed') with the
                 Australian Legal Rights Movement Inc.  of  231235  King William
                 Street, Adelaide, S.A. 5000 ('the ALRM') providing (inter alia)
                 for -

          6.2.3  the  benefits paid under this Agreement in relation to Schedule
                 4 pursuant to Clause 6.1.4 to be paid in to a trust  fund to be
                 administered by the ALRM as trustee, pending  the determination
                 of native title; any  interest  accruing  under  the trust fund
                 shall accrue to the trust fund; and

                                 - 7 -


<PAGE>




          6.2.4  upon a determination of native title over the License Area, all
                 monies held at that time in trust by ALRM pursuant to the Trust
                 Deed, are to be paid to the native title  claimant or claimants
                 in  whose  favor  the  native  title  determination is  made in
                 accordance with its or their instructions.

     6.3  In the event of a determination  of native title over the License Area
          by the National Native Title  Tribunal,  Federal Court of Australia or
          any other relevant Court with competent  jurisdiction  wholly in favor
          of a native title claimant or claimants not a party to this Agreement,
          this Agreement shall thereupon terminate.

7.    NOTIFICATION OF OPERATIONS

     7.1  Subject to the  provisions of Clause 12.10 hereof,  the Explorer shall
          provide the NTPs at least one month in advance of Petroleum Operations
          being conducted in the Operational  Area particulars in writing of the
          following parts of the proposed operational program, namely:-

          7.1.1 the proposed location of seismic lines and access roads;

          7.1.2 the proposed approximate location of Work Sites;

          7.1.3 the  proposed   method   of   seismic   operations   and   other
                consequential operations,  including  exploration  drilling  and
                testing and the proposed use of seismic lines and  access  roads
                in such operations,

          7.1.4 the major items of equipment proposed to be used;

          7.1.5 the proposed  method of disposal of any waste  material  arising
                out of Petroleum Operations;

          7.1.6 the proposed method of minimizing  environmental  disturbance or
                pollution, including oil spills and blowouts;

          7.1.7 the proposed  site and  nature of any  buildings  or  structures
               (including pipelines and associated facilities); and

          7.1.8 any other aspect of the Operational  Program  which is likely to
                have adverse impact upon or cause substantial disturbance to any
                part of the  tenement  which  may  effect the way of life of the
                NTPS.

     7.2  If the NTPs are not reasonably  satisfied with the  particulars of the
          Petroleum  Operations  given  pursuant to Clause 7.1 hereof,  the NTPs
          may,  prior  to the  proposed  commencement  of  Petroleum  Operations
          request the  Explorer  to provide,  and the  Explorer  shall  provide,
          further  particulars  of  such  proposed  operations  insofar  as  the
          particulars  relate to the impact upon or  disturbance  to any part of
          the tenement or the way of life of the NTPs.

                                 - 8 -

<PAGE>



     7.3  The Explorer shall also give notice to the NTPs if the Explorer at any
          time proposes to implement a substantial change in the existing method
          of Petroleum Operations.

     7.4  In the event  that the NTPs have a specific  objection  to any part of
          the particulars of the Petroleum  Operations  supplied by the Explorer
          under Clause 7.1, or to any substantial change therein of which notice
          has been given under Clause 7.3,  the NTPs shall refer such  objection
          to the Advisory  Committee  within thirty days of being  supplied with
          such particulars or given such notice,  and that part of the existing,
          intensified or changed operational program to which objection is taken
          shall not commence until the Advisory  Committee has reached unanimous
          agreement. Objection may only be taken where the matter objected to is
          likely to have an adverse impact upon or cause substantial disturbance
          to any part of the tenement or the way of life of the NTPs. If no such
          specific  objection is raised  within the said thirty day period,  the
          NTPs  shall be  deemed to have  consented  to the  proposed  Petroleum
          operations, subject to Clause 12 and other relevant provisions of this
          Agreement.


8.    LAND ENTRY AND OCCUPATION

     8.1  Upon the execution of this Agreement and until the termination of this
          Agreement  or,  (subject  to Clause 21 hereof)  earlier  cessation  or
          completion of Petroleum Operations,  the Explorer,  their contractors,
          sub-contractors,  employees, agents and visitors shall be permitted in
          accordance  with the terms and  conditions  of this  Agreement  and in
          particular to the provisions of Clause 12, to:

          8.1.1 enter upon that part of the Traditional  Lands  situated  in the
                License   Area  at  all  times  and  commence  and  proceed with
                Petroleum Operations  necessary to  enable it  to carry out  its
                duties in a satisfactory and efficient manner;

          8.1.2 construct necessary  access roads across the  Traditional  Lands
                adjacent to the License Area so as to gain access to the License
                Area; and

          8.1.3 use and draw water from agreed sources and failing agreement, as
                determined by the Advisory Committee pursuant to Clause 14.

     8.2  The  NTPs or any  authorized  agent  of the  NTPs  possessing  written
          authority for such purposes from the NTPs may specify in writing, upon
          reasonable  grounds,  that a person  or class  or  persons  may not be
          permitted  access to the License  Area and the  Explorer  shall ensure
          that, as far as is possible within their power, such person or persons
          shall not enter upon the License Area

9.    IDENTIFICATION

     9.1  The  Explorer  shall  notify  the NTPs of the names of all  employees,
          contractors,  agents, and visitors who will be working on, or visiting
          the  License  Area,  such  notice  to be given  fourteen  (14) days in
          advance in writing.

                                 - 9 -


<PAGE>



     9.2  The Explorer shall inform all of its  contractors,  employees,  agents
          and visitors,  of the  obligation  upon them to remain within  seismic
          line  access  corridors  or Work Sites  which have been  screened  and
          cleared in accordance  with Clause 12 of this  Agreement and to comply
          with those conditions consistent with this Agreement.

10.   PETROLEUM OPERATIONS

      The Explorer shall at all times upon the License Area:

     10.1 comply  with the  provisions  of the  Petroleum  Act and the  licenses
          granted to it thereunder;

     10.2 conduct  itself  in  accordance  with  good  and  accepted  oil  field
          practice;

     10.3 ensure that it Petroleum  Operations cause minimum  disturbance to the
          Traditional  Lands and the way of life of the NTPs  living  within the
          Traditional Lands; and

     10.4 use good and  accepted  oil  field  practice  to avoid  oil  spills or
          blowouts.

11.   SCOUTING TEAMS

           The NTPs in  consultation  with the  Explorer,  shall arrange for the
           formation of one or more  Scouting  Teams which shall be  constituted
           and remunerated in accordance with the provisions set out in Schedule
           2 hereof and shall undertake the duties of screening and clearance as
           set out in Clause 12 hereof.

12.   SCREENING AND CLEARANCE

     12.1 The parties  acknowledge  that this Agreement is made for the purpose,
          inter alia, of providing a workable and effective arrangement to avoid
          disputes and differences in relation to Areas of Significance.

     12.2 In order to protect Areas of Significance, the Explorer shall with the
          particulars  supplied or in the notice  given  under  Clause 7 hereof,
          request  clearance from the NTPs before proceeding with any land based
          Petroleum  Operations in an Operational Area or part thereof which has
          not already  been  screened  and cleared by the NTPs  pursuant to this
          Agreement .

     12.3 Subject to Clause 12.4,  upon receipt of the aforesaid  particulars or
          notice,  the NTPs shall, in conjunction with the Explorer undertake at
          the expense of the Explorer and in accordance with this Agreement, the
          Organization and implementation of a screening program by the Scouting
          Team  of the  Operational  Area  or part  thereof  referred  to in the
          aforesaid particulars or notice ("the Area to be Screened").



                                - 10 -


<PAGE>



     12.4 Where the NTPs receive a request for clearance pursuant to Clause 7 or
          this Clause 12 in respect of an  Operational  Area or part thereof and
          the  Operational  Area or part  thereof  has been the subject of prior
          screening and clearance in accordance with the terms and conditions of
          this  Agreement,  the NTPs shall by notice in  writing  within two (2)
          weeks of the request so notify the Explorer that such Operational Area
          or part thereof  shall be deemed to have been  screened and cleared in
          accordance with the requirements of this Agreement.

     12.5 Subject to religious and/or  ceremonial  obligations of members of the
          NTPs, the tasks of the Scouting Team shall be to:

          12.5.1 determine whether proposed seismic lines,  access roads or Work
                 Sites are likely to be in Areas of Significance;

          12.5.2 give advance warning to the Explorer's  representative attached
                 to the  Scouting  Team  to enable  any  representative  of  the
                 Explorer to  relocate  parts  of seismic  lines,  access roads,
                 or Work sites, in order to avoid Areas of Significance;

          12.5.3 show  reasonable  diligence in  preparing  for and carrying out
                 such work, while the Explorer meets its obligations pursuant to
                 this Agreement; and

          12.5.4 make every  reasonable  endeavor to proceed  with its work at a
                 rate  that  will  avoid  any  standby of the line clearing  and
                 seismic operations.

     12.6 The representative of the Explorer attached to the Scouting Team shall
          be  responsible  for marking the track of the proposed  seismic lines,
          access roads and Work Sites and for relocating  these where there is a
          likelihood of Areas of  Significance  being disturbed by the Petroleum
          operations.  The NTPs will notify the  Explorer in writing of the name
          of the anthropologist who shall be responsible for coordination of the
          Scouting Team operations.

     12.7 The NTPs shall ensure that any  Traditional  Owners  accompanying  the
          Scouting  Team shall have  knowledge  of the Area to be  Screened  and
          shall have sole  responsibility  on behalf of the NTPs in  determining
          whether  there are any  Areas of  Significance  within  the area to be
          screened and the Explorer shall ensure that the area to be screened is
          appropriately  flagged,  including the track of seismic line or access
          road and the perimeter of a Work Site.

     12.8 The Scouting  Team and the Explorer  will discuss the methods by which
          the Explorer may proceed with Petroleum  Operations  without  entering
          any Areas of Significance.

     12.9 In the event that it is necessary to deviate any proposed seismic line
          or access road,  such deviation shall be made as small as possible and
          any  deviated  line or road will be returned to the  original  planned
          line or road as soon as practicable,  bearing in mind the proximity of
          any Areas of  Significance  and the need to minimize unduly sharp line
          deflections. In the event that relocation of a proposed drill site for
          an exploration appraisal or development well is being considered,  any
          movement  of the  proposed  drill  site shall be  minimized  so far as
          possible.

                                - 11 -


<PAGE>



     12.10In the event that the Explorer wishes to make minor  modifications  or
          additions  to any part of the program of  Petroleum  Operations  or an
          existing  cleared  seismic line or access road, or to use any existing
          water  source,   the  Explorer  shall  immediately   notify  the  NTPs
          accordingly  and request that the Scouting  Team screens such proposed
          modifications, additions, Work Site or water source in accordance with
          the provisions of this Agreement.  In such case the NTPs shall as soon
          as possible  and in any event not later than seven days after  receipt
          of such request,  either notify the Explorer in writing of its consent
          to such modifications, additions, Work Site or water source, or ensure
          the  commencement by the Scouting Team of the screening of those areas
          as  requested  by the  Explorer,  or refer  such  notification  to the
          Advisory Committee for its determination and advice.

     12.11The Explorer  shall follow the flagged  seismic lines and access roads
          as closely as  practicable  but in any event shall  remain  within the
          seismic  line/access road corridors.  Any deviation beyond the seismic
          line/access road corridor shall require a further scouting exercise.

     12.12Upon  screening  and  clearance  of an  Operational  Area or any  part
          thereof by the  Scouting  Team,  the  Explorer  shall be  entitled  to
          commence Petroleum Operations without being required to obtain further
          clearance  except as  otherwise  provided in Clauses  12.10.  Where an
          Operational  Area or any part  thereof has been  screened  and cleared
          subject  to  compliance  with  conditions  (if any)  specified  by the
          Scouting Team, the Explorer shall conduct Petroleum Operations thereon
          only in accordance with such conditions.

     12.13A representative  of the Explorer shall accompany the Scouting Team at
          all times  during  its  scouting  tours and  within  seven days of the
          completion of each scouting tour, the NTPs will notify the Explorer in
          writing of the Scouting Team's decisions  concerning the acceptability
          of proposed locations of the Explorer seismic lines,  access roads and
          Work Sites.  Such  notification  will specify the  proposed  locations
          which have been  screened  and cleared for use by the Explorer and the
          conditions (if any) attached to that use.

     12.14The  Explorer  shall  be  absolutely  entitled  to rely on  clearances
          notified by the NTPs pursuant to Clause 12.13 and Petroleum Operations
          conducted in accordance  with such  clearances as notified by the NTPs
          shall foreclose any future claims that such operations interfered with
          any Area of Significance.

     12.15Neither  the NTPs nor any member of the  Scouting  Team or Teams shall
          be required to disclose to the  Explorer or the  Operator the location
          of any cultural information in relation to any Area of Significance.

     12.16During the term of this Agreement and while  Petroleum  Operations are
          conducted  within the License  Area,  the  Explorer  shall  engage the
          service  of a Liaison  Officer as needed to be  nominated  by the NTPs
          whose duties and functions shall include:

          12.16.1 liaising  between the NTPs and the Traditional  Owners and the
                  Explorer with respect to such matters as the  parties may from
                  time to time  agree;  coordinating  those  Traditional  Owners
                  from  time  to  time forming part of the Scouting Team; and




                                     - 12 -

<PAGE>




          12.16.2 liaising with the Explorer during tours by the Scouting Team.

     12.17The costs and expenses of  employment  of the Liaison  Officer and the
          reasonable  expenses incurred by him or her in carrying out his or her
          duties shall be at the expense of the Explorer.

     12.18The parties acknowledged that there is no contractual  relationship of
          any sort whatsoever as between the Explorer and any person employed or
          engaged  by the  NTPs to form  part of any  Scouting  Team,  and  that
          nothing  contained in this  Agreement will be interpreted or deemed to
          constitute any employment or contractual  relationship as between such
          persons and the  Explorer.  The NTPs will ensure  compliance  with the
          Workers  Rehabilitation  and  Compensation  Act 1986, the Occupational
          Health,  Safety and Welfare Act 1986, the Income Tax  Assessment  1936
          (Cwth) and any other  legislation  relevant to the terms or basis upon
          which the NTPs engage or retain any person to this Agreement.

13.   EFFECT OF OPERATIONS ON THE ENVIRONMENT

13.1       The parties  acknowledge  that a further purpose of this Agreement is
           to:

          13.1.1 provide a workable and  effective  arrangement  to minimize the
                 physical, ecological and social effect of Petroleum  Operations
                 conducted by the Explorer  in  Operational  Areas from  time to
                 time

          13.1.2 provide that all reasonable  steps are taken to ensure the most
                 effective regeneration of the  Operational  Areas and any other
                 parts of the Traditional Lands affected by Petroleum Operations
                 and

          13.1.3 ensure  observance  of all both  Federal  and State  government
                 requirements in relation to the environment.

     13.2 in order to achieve  the objects  stated in Clause  13.1 the  Explorer
          undertakes to comply with the requirements of the Petroleum Act and in
          particular  to  comply  with  Regulation  16 of the  regulations  made
          thereunder.

14.   ADVISORY COMMITTEE

     14.1 In order to provide for the smooth working of this Agreement,  and the
          continuous  co-operation of the parties  hereto,  the parties agree to
          form an Advisory Committee, consisting of two members appointed by the
          Explorer,  and two members  appointed  by the NTPs.  Each member shall
          have the right to  appoint a proxy to attend on his or her  behalf and
          to invite a  reasonable  number  of  non-members  to attend  committee
          meetings having regard to the matters under discussion.

                                - 13 -


<PAGE>



     14.2 The Advisory  Committee shall meet on a regular basis and in any event
          whenever  any member of either party  requests a Committee  meeting on
          twenty one days notice (or such other period as the members may agree)
          to be given,  together  with  details of agenda to the  members of the
          Committee.

     14.3 The  Committee  shall meet at such place and in  accordance  with such
          procedures  as the  Committee  shall  determine  from time to time and
          shall keep  minutes  which shall be supplied to the  Explorer  and the
          NTPs.

     14.4 Unless  otherwise  specified,  the  majority  decision of the Advisory
          Committee shall be the determination of the Committee. In the event of
          a deadlock the matter will be resolved as a dispute in accordance with
          Clause 33.

     14.5 The Explorer shall observe and act in accordance with the decisions of
          the Advisory Committee determined in accordance with this Clause 14.

     14.6 Costs and expenses  incurred by the parties relating to the attendance
          of their  respective  members at  meetings of the  Committee  shall be
          borne equally between the parties unless  otherwise  determined by the
          Committee.

     14.7 The functions of the Advisory Committee shall include:-

          14.7.1  maintaining   liaison  between  the  Explorer  and  the  local
                  Yankunytjatjara and Antakirinja people;

          14.7.2  reviewing the working of this  Agreement  and the  progress of
                  Petroleum Operations hereunder;

          14.7.3  making determinations under Clause 12.10 hereof;

          14.7.4  receiving and  hearing any  specific  objection  or  complaint
                  relating to any part of the Petroleum Operations; and

          14.7.5  making recommendations  to the  Explorer  in  relation  to the
                  employment of,  and  appropriate  training for Yankunytjatjara
                  and   Antakirinja   people  and  other  people  entering   the
                  Operational Areas for the purposes of the Petroleum Operations
                  and in particular, using its best endeavors to ensure that  no
                  incidends occur  which  degrade,  prejudice  or  besmirch  the
                  customs, lifestyle, race or character of the   Yankunytjatjara
                  and Antakirinja people.

     14.8 The parties agree that they will at all times use their best endeavors
          to  carry  out the  provisions  of this  Agreement  so that  Petroleum
          Operations may be conducted  efficiently  and with adequate  regard to
          the  aspirations  and welfare of the  Yankunytjatjara  and Antakirinja
          people affected by the Petroleum Operations.

     14.9 The Explorer  shall use its best  endeavors in  consultation  with the
          NTPs to promote the training referred to in Clause and to utilize  the
          services of Yankunytjatjara and Antakirinja people in connection  with
          the Petroleum Operations.

                                - 14 -

<PAGE>



15.   REMOVAL OF EMPLOYEES

     15.1 Unless  the  NTPs  otherwise   agree,  the  Explorer  shall  take  all
          reasonably steps to ensure immediate  removal from the License Area of
          any  contractor,  employee,  agent, or visitor of any of the Explorer,
          who:

          15.1.1 has  recklessly  or  willfully  trespassed  on or  in  any  way
                 interfered with any Area of Significance;

          15.1.2 has   recklessly  or  willfully   moved  outside  any  Seismic
                 line/access road corridor or Work Site;

          15.1.3 has violated any of the conditions set out on the  contractor's
                 employee's, agents or visitors  identification  card or permit;
                 or/and

          15.1.4 has acted in a drunken  and  disorderly  manner on the  License
                 Area or  has supplied  liquor in  an  unauthorized  fashion  to
                 members of the NTPs;

     15.2 In the  event of a dispute  between  the NTPs and the  Explorer  as to
          whether a person  has acted in a manner  justifying  removal  from the
          License Area the matter  shall be referred to the  Advisory  Committee
          for determination.

16.   INSTRUCTION IN ABORIGINAL CULTURE

     16.1 the Explorer shall promote among non-Aborigines  employed in Petroleum
          Operations, a knowledge,  understanding and respect for the tradition,
          language and culture of the Yankunytjatjara and Antakirinja people.

     16.2 The Explorer shall ensure that:

          16.2.1 all   non-Aboriginal   employees   and   personnel   are  given
                 appropriate   instruction on  aspects of  Yankunytjatjara   and
                 Antakirinja   traditions,   history   and  culture  by  way  of
                 background and orientation;
 
          16.2.2 all "on-site" supervisory staff are given an initial course and
                 periodic refresher courses of a more comprehensive and advanced
                 nature than the instructions envisaged in Clause 16.2.1 above.

     16.3 The Explorer shall consult and have regard to the views of the NTPs in
          relation to the  formulation  and  presentation of the instruction and
          courses  referred to in Clause 16.2 hereof.  The NTPs shall,  whenever
          requested by the Explorer to do so, give all reasonable  assistance to
          the Explorer in attaining  the  objectives of this Clause 16 and shall
          be reimbursed by the Explorer for all reasonable  expenses incurred by
          it in so doing.

                                - 15 -

<PAGE>



17.   EXPLORER COVENANTS

           The  Explorer  covenants  with the NTPs that in  connection  with the
           conduct of Petroleum Operations by it on the License Area it shall;

     17.1 keep  each Work  Site to the  minimum  area  considered  necessary  to
          conduct efficient Petroleum Operations;

     17.2 take all proper precautions to reduce fire risk on the License Area;

     17.3 not make any break in any of the NTPs fences without  either  promptly
          installing an adequate gate or making good the break; and

     17.4 ensure  all well  sites are  capped or  sufficiently  fenced off after
          drilling so as to prevent injury to persons or stock.

18.   THE NTPs COVENANTS

     18.1 The NTPs covenant with the Explorer that the NTPs shall:

          18.1.1 not interfere with the conduct of Petroleum Operations upon the
                 License Area except in accordance with this Agreement; and

          18.1.2 not lodge or make any  objections  to the grant of a renewal of
                 the PEL to the Explorer for which the  Explorer may apply under
                 the Petroleum Act in respect of the  License  Area, or, subject
                 to the  Explorer complying with this Agreement, to the granting
                 to it of a PPL or any renewal or extension thereof of a PPL.

     18.2 The NTPs further  covenant that they having used their best  endeavors
          to make a full and  proper  search for the  Traditional  Owners of the
          License Area they  acknowledge that the Explorer has entered into this
          Agreement on the basis that the NTPs represent all Traditional  Owners
          of the License Area and the NYPs hereby indemnify and keep indemnified
          the Explorer in respect of any loss, damage or delay occasioned by any
          future  claim  made,  pursuant  to the Native  Title Act 1993  (Cwth),
          and/or the Native Title (South Australia) Act 1994 by a third party or
          third parties in respect of the License Area.

19.   RIGHTS OF TRADITIONAL OWNERS

     19.1 The  Explorer  acknowledges  that the  members of the NTPs who are the
          Traditional  Owners,  have the right except  where their  presence may
          cause  danger  to health  and  safety,  or where  their  presence  may
          interfere with the conduct of efficient Petroleum Operations:

          19.1.1 to move freely  throughout the Operational  Areas including all
                 roads thereon;

                                - 16 -


<PAGE>



          19.1.2 to establish  residents  within  reasonable  proximity to other
                 residences in any place in the Operational  Areas  where  other
                 people reside; and

          19.1.3 to   pursue   customary  and  traditional   activities  in  the
                 Operational Areas.

     19.2 The NTPs,  members and agents shall be permitted  the use of all roads
          constructed for the purpose of Petroleum  Operations provided such use
          does not interfere with the conduct of efficient Petroleum Operations.

     19.3 The use of roads in  accordance  with this clause  shall be subject to
          reasonable  control by the  Explorer  for the purpose of safety and to
          priority  of  use  by  the  Explorer  for  the  purpose  of  Petroleum
          Operations.

20.   RIGHTS OF EXPLORER

           Subject  to this  Agreement  the  Explorer  shall  have the  right to
           conduct  Petroleum  Operations in the License Area in accordance with
           the terms of this Agreement freely and in an efficient manner without
           disturbance or interruption from the NTPs, in order to discharge it's
           legal obligations and duties in respect thereof,  in particular under
           the  Petroleum  Act and the  License  and any  other  legislative  or
           administrative requirements relating to the carrying out of Petroleum
           Operations.

21    REVERSION OF INFRASTRUCTURE

     21.1 Within the period of twelve calendar months, or such other time as may
          be agreed  between the parties,  after of the Explorer  ceases to have
          any  right  to  conduct  operations  pursuant  to the  PEL  under  the
          Petroleum  Act in the License  Area,  and it holds no other  tenements
          under the Petroleum Act in the License Area the Explorer  shall remove
          from the License Area all infrastructure or facilities constructed for
          the  purposes of  Petroleum  Operations,  which are capable of removal
          other than those which the NTPs agree may remain thereon.

     21.2 In the event that the NTPs agree that any or all of the infrastructure
          or facilities  remain,  the Explorer shall not be liable for any state
          or  condition  of repair for such  infrastructure  or  facilities  not
          removed  from the License  Area and the NTPs hereby waive and releases
          the Explorer from any claim demands costs or expenses made or incurred
          by the NTPs in respect of such  infrastructure  or facilities and will
          indemnify the Explorer against any claims demands suits or proceedings
          of any third party  arising out of the state or condition of repair of
          such infrastructure or facilities.

     21.3.Any  infrastructure  or facilities the NTPs do not agree should remain
          and are not  removed  by the  Explorer  within  the  period  of twelve
          calendar  months as  aforesaid  shall  become the property of the NTPs
          without  any payment or  assumption  of any  mortgage,  lien or charge
          thereof on the part of the NTPs.

     21.4.Upon  acquisition  by the NTPs of such  infrastructure  or facilities,
          the NTPs shall  become  responsible  for the  maintenance  thereof and
          shall maintain where necessary, repair and renovate such facilities as
          required. - 17 -

<PAGE>



22.   INDEMNITY

Subject  to  Clause  12.17  herein,  the  NTPs  and its  employees,  agents  and
contractors  shall be  indemnified  by the  Explorer in respect of all  actions,
suits, claims, demands, or cost of third parties arising out of or in connection
with any work  carried  out by or on behalf  of the  Explorer  pursuant  to this
Agreement or relating to the NTPs  activities  except  where such action,  suit,
claim, demand or cost arises out of the negligence or willful act or omission of
the NTPS, its employees, agents or contractors.

23.   FIELD DEVELOPMENT AND PRODUCTION

The  parties  acknowledge  that at any time  during or after  completion  of the
Petroleum Operations carried out pursuant to PEL, the Explorer may wish to apply
for a PPL under the  Petroleum  Act in  respect  of the whole or any part of the
License Area. In the event of the Explorer so applying,  and a PPL being granted
by the Minister,  unless the parties  otherwise  agree,  the  provisions of this
Agreement  including the  Principles of Agreement  contained in Schedule 5 shall
apply in relation to the conduct of Petroleum Operations on the PPL so granted.

24.   PETROLEUM PRODUCTION LICENSE

     24.1 Where the Explorer  intends to make  application  for a PPL within the
          License Area pursuant to the Petroleum  Act, the Explorer shall notify
          the NTPs of it's intention to lodge such application, at least 30 days
          prior to lodgement with the Minister and shall at that time provide to
          the NTPs technical and financial data as set out in Schedule 5 herein.

     24.2 Where  notification  is received by the NTPs pursuant to Clause herein
          the  NTPs  shall,  subject  to the  terms  and  conditions  set out in
          Schedule  5  herein  and  in  particular  upon  the  payment  of  past
          exploration  expenditure  as  provided  for in  that  Schedule  5,  be
          entitled to elect to take up to a maximum 10%  participatory  interest
          in any joint  venture in respect of the PPL  PROVIDED  HOWEVER THAT if
          the  NTPs   elect  to  take  up  any   participatory   interest   that
          participatory interest must be not less than 1 %.

24.3       Where the Explorer makes  application for the grant of a PPL pursuant
           to the Petroleum Act it shall forward a copy of that  application and
           all relevant supporting documentation to the NTPs, and the NTPs shall
           consent  to  the  grant  of  the  PPL  where  the  application  is in
           accordance with the terms contemplated in this Agreement,

     24.4 Where the Minister grants to the Explorer a PPL the provisions of this
          Agreement  mutatis  mutandis  shall  apply in  respect  of any work or
          activities  conducted by the  Explorer  within the License Area for so
          long  as the  PPL  shall  exist  and any  obligations  on the  parties
          pursuant to the Act shall be deemed to have been met.




                                - 18 -


<PAGE>



25.   FORCE MAJEURE

     25.1 In the event that the  performance of the Agreement by either party is
          prevented or delayed in whole or in part by acts of God,  flood,  fire
          or damage caused by lightning,  storm,  tempest,  unseasonable  rains,
          strikes,  lockouts or other industrial  disturbance,  riots, blowouts,
          laws,  rules,  regulations,  or directions of a governing  body having
          jurisdiction  over the License  Area,  religious  or other  ceremonial
          activities  of members of the NTPs,  inability to obtain  equipment or
          material or any other causes  which by the  exercise of due  diligence
          that the party is unable to prevent  or  overcome  ("force  majeure"),
          this  Agreement  shall  nevertheless  continue and remain in force and
          effect but that party shall not be in default hereunder for as long as
          it  continues  to be  prevented  or delayed as aforesaid by such force
          majeure  and the time  within  which such party is required to perform
          any work to satisfy any  obligations  hereunder shall be extended by a
          period  equivalent  to that  during  which  such  prevention  or delay
          continues provided that:

          25.1.1 the  cause of the force  majeure  as far as  possible  shall be
                 remedied with all reasonable dispatch by such party;

          25.1.2 neither party shall be required to settle any strike,  lockout,
                 or other  industrial   disturbance  on  terms  that it does not
                 regard as satisfactory.

          25.2 The party  affected  by any event of force  majeure as  aforesaid
               shall forthwith give notice in writing thereof to the other party
               of the occurrence of such event and the cessation thereof.

26.   ASSIGNMENT

          26.1 Except as  otherwise  provided  in this  Clause 26, the  Explorer
               shall not transfer the whole or any part of its interests, rights
               or obligations under this Agreement.

          26.2 The  Explorer  may  transfer  the  whole  or  any  part  of  it's
               interests,  rights or obligations under this Agreement subject to
               the  conditions   hereinafter   specified,   to  any  financially
               responsible  person or persons or  corporation  (having regard to
               the  extent of the  financial  obligations  to be  assumed by the
               proposed transferee) selected by the Explorer.  The conditions of
               such transfer are:

               26.2.1 The NTPs have  given  their  consent  in  writing  to such
                      transfer,  which   consent   shall   not  be  unreasonably
                      withheld, and  if  there  are  no  grounds  for reasonably
                      withholding such consent, then such consent shall be given
                      as expeditiously as possible  and in any  event  not  more
                      than 30 days from the date of notification of the proposed
                      transfer.   If  the  NTPs withhold  their   consent,  such
                      withholding  must  be  accompanied by   a  written  notice
                      stating in detail the  reasons  thereof  and  such  notice
                      shall be  given  as  expeditiously as  possible and in any
                      event not  more than 30 days from the date of notification
                      of the proposed transfer;


                                - 19 -


<PAGE>



          26.2.2 the proposed  transferee  shall execute in favor of the NTPs an
                 agreement or  covenant  undertaking  to observe and comply with
                 all the obligations or the Explorer to this Agreement.

27.   OPERATIONS

     27.1 For the purposes of fulfilling its obligations under the License,  the
          Explorer may  exercise all its rights and perform all its  obligations
          under this Agreement  through an Operator.  The Explorer may from time
          to time  request the  approval of the NTPs to the  appointment  of the
          Operator and such approval  shall not be  unreasonably  withheld.  The
          NTPs shall notify their  approval or  disapproval  of such an Operator
          within 28 days of receipt  of such  request  (and no such  appointment
          shall take  place  until such  approval  is given.)  The NTPs shall be
          entitled  to deal with the  Operator  as though the NTPs were  dealing
          with the Explorer.

     27.2 The NTPs shall be  entitled  to select and engage all such  employees,
          agents and independent  contractors as are necessary and desirable for
          the  carrying  out  of any or all  of  their  obligations  under  this
          Agreement.

28.   CONFIDENTIAL INFORMATION

     28.1 No party  shall  advertise,  publish or  release to anyone  other than
          another party any information  concerning this Agreement or any matter
          or thing done or required to be done pursuant thereto. All information
          supplied  pursuant to this Agreement by one party to this Agreement to
          another party to this Agreement (including all information relating to
          Areas of Significance) shall be confidential and shall not be released
          to a party without the other party's' written consent PROVIDED HOWEVER
          THAT:

          28.1.1 the  Explorer  shall  be free to make  such  reports  as may be
                 required either by the rules of any Stock Exchange in Australia
                 or elsewhere  on which shares of such Explorer are listed or by
                 the laws and  regulations  of any  government  or  governmental
                 agency having jurisdiction over such matter or Explorer;

          28.1.2 the Explorer may disclose such information  except  information
                 identifying   Areas  of  Significance   to  a  third  party  in
                 connection with bona  fide  discussions  regarding  a  proposed
                 sale of all or part of such Explorer's interest in the  License
                 to that third party  or  when   necessary  in  connection  with
                 efforts  to  obtain   funds   to  carry   out  such  Explorer's
                 reponsibilities hereunder but  all  such  disclosures  shall be
                 made on a confidential basis; and

          28.1.3 the NTPs or the Explorer may disclose such  information  to any
                 of its bona fide consultants subject  to their  agreeing  to be
                 bound by the provisions of this Clause 28.



                                - 20 -


<PAGE>



29.   TERMINATION

     29.1 The NTPs may terminate  this Agreement by giving to the Explorer three
          months notice in writing only on the following conditions:

          29.1.1 in the event that the  Explorer  fails to pay any monies due to
                 the NTPs and such default continues for more than 30 days after
                 receipt of notice of failure to pay, except in the case where a
                 bona fide dispute  as  to  the  liability  or  amount of monies
                 payable has arisen;

          29.1.2 if the  Explorer is in breach of any term or  condition of this
                 Agreement and, if such breach is  capable  of  being  remedied,
                 fails to remedy or commence to  remedy  such  breach  within 30
                 days after receipt of a notice given by the NTPs in  writing of
                 such breach.

     29.2 It is specifically agreed and understood that this Agreement shall not
          terminate  because of any change or reduction of the NTPs entitlements
          to payment under any PEL or PPL covering the License Area or' any part
          thereof,  so long as the  Explorer  is in  compliance  with the  terms
          hereof.

30.   TERMINATION OF ACTIVITIES

     30.1 The Explorer shall notify the NTPs one month prior to any surrender of
          the PEL (or PPL) pursuant to the Petroleum Act.

     30.2 A surrender  under  Clause 30.1 is  effective on and from the date the
          PEL (or PPL) is effectively surrendered pursuant to the Petroleum Act.

     30.3 In the event of such  surrender  by the  Explorer,  the consent of the
          NTPs to the grant of the PEL (or PPL) shall be deemed to be  withdrawn
          and to be of no effect as of the effective date or surrender.

     30.4 The Explorer shall cease Petroleum Operations  immediately the PEL (or
          PPL) expires or is surrendered, withdrawn, revoked or cancelled.

     30.5 Upon the surrender  withdrawal  revocation or  cancellation of the PEL
          (or the PPL) as the case may be:

          30.5.1 the  Explorer  shall pay to the NTPs all monies then payable or
                 accrued which are due to it pursuant to this Agreement;

          30.5.2 except to the extent that entry or  occupation  is required for
                 the  purposes  of Clause 21  the  Explorer,   their  employees,
                 servants,   agents, contractors  and/or  sub-contractors  shall
                 immediately and permanently leave the License Area;

          30.5.3 each party shall remain liable to the other party in respect of
                 any liability it has to the other as a consequence of any prior
                 breach of this Agreement;

                                - 21 -

<PAGE>



          30.5.4 nothing in this  Agreement  shall be  construed  as imposing an
                 obligation on  the  Explorer  to  carry  out   or complete  the
                 Petroleum Operations;

          30.5.5 except as provided in Clause 31 this Agreement  shall terminate
                 when the parties have complied with Clause 30, the PEL (or PPL)
                 has  terminated  or has  been surrendered, withdrawn,  revoked,
                 cancelled, as the case may be, whichever occurs earlier;

          30.5.6 the parties  obligations under Clause 13.2, shall to the extent
                 referred to therein survive any termination of this Agreement

31.   CONSEQUENCES OF TERMINATION

Upon termination of this Agreement pursuant to Clauses 6.3 or 30;

     31.1 the rights of the Explorer  hereunder,  unless  otherwise  provided in
          this  Agreement,  shall  thereupon  cease  without  prejudice  to  any
          liability in respect of any  antecedent  breach or default  under this
          Agreement; and

     31.2 the Explorer shall, without prejudice to its obligations under Clauses
          13 and  21.1  hereof,  be  relieved  of  all  obligations  under  this
          Agreement  except those  obligations  which arose prior to the date of
          such termination.

32.   COSTS AND PAYMENTS

     32.1 The  Explorer  shall not be liable  to pay the wages and  expenses  of
          persons  employed  by the NTPs,  to the  extent  that  such  wages and
          expenses are already funded by a State or Commonwealth Government.

     32.2 The NTPs shall  prepare and provide to the Explorer on a monthly basis
          or at such other times as may be agreed between the parties,  detailed
          accounts in respect of scouting activities  undertaken by the Scouting
          Team at the request of the Explorer in accordance with the schedule of
          fees set out in  Schedule 2 hereto  and, in the absence of any dispute
          as to the amount so claimed by the NTPs,  the  Explorer  shall  within
          thirty  days of  receipt of such  invoice,  pay to the NTPs the amount
          claimed.

     32.3 The Explorer shall make payment to the NTPs of amounts in respect of:

          32.3.1  Exploration  payments in  accordance  with the  provisions  of
                  Schedule 3 herein;

          32.3.2  Compensation  payments in  accordance  with the  provisions of
                  Schedule 4 herein;

          32.3.3 Annual advance payments and/or dividends payments in accordance
                 with the provisions of Schedule 5 herein.

                                - 22 -


<PAGE>



     32.4 In the  event of a dispute  as to the  amount or  amounts  claimed  or
          payable pursuant to Clauses 32.2 and 32.3 herein,  the matter shall be
          referred to the Advisory  Committee for  resolution and in the absence
          of  agreement  the  matter  shall  be  referred  for   arbitration  in
          accordance with Clause 33 hereof.

33.   DISPUTES

     33.1 If any dispute or difference  arises between the Explorer and the NTPs
          in  connection  with  this  Agreement,   or  the  rights,   duties  or
          obligations of any party hereunder,  the parties shall meet to discuss
          the  dispute or  difference  and  endeavor to  amicably  resolve  such
          dispute or  difference  by  themselves.  The  parties  may,  by mutual
          agreement, appoint an independent mediator to assist them to negotiate
          a resolution of such dispute;  the cost of the independent mediator to
          be agreed  upon by the  parties  in advance  and to be met  equally by
          them.

     33.2 If after discussions the parties are unable to resolve such dispute or
          difference,   the  matter  shall  be  referred  to  arbitration.   The
          arbitrator shall be agreed upon between the parties hereto and failing
          agreement  within one month of one party giving notice of intention to
          arbitrate to the others,  shall be nominated by the  President for the
          time being of the Law Society of South Australia.

34.   TERM

This  Agreement  shall  commence  on the date first  appearing  herein and shall
continue  for the  duration  of any PEL held by the  Explorer  in respect of the
License Area or, in the event of  application  by the Explorer for, and grant to
the  Explorer  or, a PPL or PPL's for the  duration  of the PPL,  PPL's or until
terminated in accordance with Clauses 6.3, 29 or 30 herein.


35.   VARIATION

The parties  may from time to time by  agreement  in writing add to,  substitute
for,  cancel or vary any of the  provisions of this Agreement for the purpose of
more  efficiently or  satisfactorily  implementing  or  facilitating  any of the
objects of this Agreement.

36.   FURTHER ASSURANCE

Each of the parties hereto will sign, execute,  make and do all such assurances,
documents,  acts and things as may be necessary for effectually carrying out the
terms of this Agreement

37    NOTICES

     37.1 Any notice,  request or other demand or writing  required or permitted
          to be given hereunder may be duly served or at the option of the party
          giving the notice may be  validly  and  sufficiently  given if sent by
          telex, facsimile or post addressed to:



                                - 23 -


<PAGE>



In the Case of the Explorer to:
Hemley Exploration Pty Ltd
C/- Mc Donald & Co.
262-266 Pirie Street
PO Box 3216 Rundle Mall
ADELAIDE SA 5000

Telephone: (08) 82722355
Facsimile: (08) 82720533

In the case of Yankunytjatjara Council (Aboriginal
Corporation) to:
Principal Legal Officer,
Pitjantjatjara Council Inc.,
PO Box 2189
ALICE SPRINGS NT 0871

Telephone: (08) 89 505418
Facsimile: (08) 89523261

In the case of Antakirinja  Land  Management  (Aboriginal  Corporation)
to:
Principal Legal Officer,
Aboriginal Legal Rights Movement Inc., Native Title Unit,
321 - 325 King William Street,
ADELAIDE, S.A. 5000

Telephone (08) 8212 1244
Facsimile (08) 8211 7424

In the case of PADDY JONES, JEAN WOODS,
TILLY WAYE, SADIE SINGER, LALLIE LENNON and
JOHNNY CULLINAN to:

Principal Legal Officer,
Aboriginal Legal Rights Movement Inc., Native Title Unit,
321 - 325 King William Street,
ADELAIDE, S.A. 5000

Telephone (08) 8212 1244
Facsimile (08) 8211 7424







                                - 24 -


<PAGE>



In the case of WILLIAM HERBERT LENNON Snr,
EILEEN CROMBIE, IAN CROMBIE and KEITH SMITH to;

Principal Legal Officer,

Aboriginal Legal Rights Movement Inc.,
Native Title Unit,
321-325  King William Street,
ADELAIDE, S.A. 5000

Telephone [08[ 82121244
Facsimile [08] 82117424

37.2  FOR THE PURPOSES OF THIS  AGREEMENT A NOTICE SERVED ON THE EXPLORER BY THE
      PRINCIPAL LEGAL OFFICER, ABORIGINAL LEGAL RIGHTS MOVEMENT INC NATIVE TITLE
      UNIT  PURPORTING TO BE FOR AND ON BEHALF OF THE NTPS SHALL BE DEEMED TO BE
      SERVED ON THE EXPLORER
      BY THE NTPS.






























                                - 25 -


<PAGE>



IN WITNESS  WHEREOF the parties  have set their hands and seals the day and year
first hereinbefore written.

THE COMMON SEAL of
YANKUNYTJATJARA
COUNCIL  (ABORIGINAL  CORPORATION)  was hereto affixed with the authority of the
Executive Board in the presence of five members thereof, who hereby certify that
this act is done in  conformity  with a resolution  of  Yankunytjatjara  Council
(Aboriginal Corporation)

THE COMMON SEAL of
ANTAKIRINJA LAND
MANAGEMENT
(ABORIGINAL
CORPORATION) was hereto affixed with the authority of the Executive Board in the
presence of three members  thereof,  who hereby certify that this act is done in
conformity with a resolution of Yankunytjatjara Council (Aboriginal Corporation)


















                                - 26 -


<PAGE>



      Signed by the said PADDY JONES in the presence of:


      Signed by the said JEAN WOODS in the presence of:

      Signed by the said TILLY WAYE in the presence of:

      Signed by the said SADIE SINGER in the presence of:

      Signed by the said LALLIE LENNON in the presence of:

      Signed by the said JOHNNY CULLINAN in the presence of:


      Signed by the said WILLIAM LENNON Snr in the presence of:

      Signed by the said EILEEN CROMBIE in the presence of:

      Signed by the said IAN CROMBIE in the presence of:

      Signed by the said KEITH SMITH in the presence of:
















                                - 27 -


<PAGE>





THE COMMON SEAL of
HEMLEY  EXPLORATION  PTY LTD was affixed hereto dated this 9th day of APRIL 1998
in the presence of:




---------------------
DIRECT

---------------------
SECRETARY






                                - 28 -



<PAGE>



                               Schedule


Description of the License Area:

All that part of the State of South Australia bounded as follows:-

Commencing at a point being at the intersection of latitude  27(Degree)00'S  and
longitude  134(Degree)10'E,  thence  south to latitude  28(Degree)10'S,  west to
longitude 133(Degree)31'E,  south to latitude 28(Degree)35'S,  west to longitude
133(Degree)00'E,  north to the southern  boundary of the  Pitjantjatjara  Lands,
thence generally north easterly along the boundary of the said lands to latitude
27(Degree)00'S,  and east to a point of  commencement,  all within latitudes and
longitudes being geodetic and expressed in the terms of the Australian  Geodetic
Datum as defined on page 4984 of the Commonwealth Gazette No. 84 dated 6 October
1966.




AREA: 10930 square kilometers (approximately)


                                - 29 -


<PAGE>


                              Schedule 2


1.   The NTPs will provide a Scouting  Team or Teams to undertake  screening and
     clearing of  Petroleum  Operations  within the License Area if and when the
     requirement  arises in  accordance  with  Clause 7 of this  Agreement.  The
     composition  of the  Scouting  Team or Teams  may vary from time to time as
     determined by the NTPs in consultation  with the Explorer provided that the
     Scouting  Team or Teams  will at no time  comprise  more than four male and
     four female members of the NTPs.

2.   The NTPs will ensure that both a male  and/or a female  anthropologist  are
     available  to join the Scouting  Team  depending on the part of the License
     Area  under  consideration  at any  given  time  and the  Area or  Areas of
     Significance that may be therein.

3.   The male anthropologist  appointed by the NTPs will coordinate the Scouting
     Teams  provided for in Clause 11 of this  Agreement and will be responsible
     for  conveying  the  results  of the  Scouting  Team's  determinations  and
     assessments of the Explorer's  Petroleum Operations under the terms of this
     Agreement.

4.   Subject to this  Agreement,  the NTPs will ensure that the Scouting Team is
     available to undertake additional  anthropological assessment in respect of
     campsites  and bore  sites as and  when  such  sites  are  required  by the
     Explorer in the course of carrying out the Petroleum Operations. Where such
     additional  anthropological  assessment  is required,  the NTPs will ensure
     that the Scouting Team  operates on a regular work schedule that  coincides
     with the work schedule of the Explorer.

5.   The NTPs will arrange suitable camping facilities for the Scouting Team.

6.   The NTPs will ensure that a  Traditional  Owner or Owners (but in event not
     exceeding three persons) with first hand knowledge of Areas of Significance
     in the particular  Operational Area,  together with the appropriate support
     equipment, are available for Scouting purposes.

7.   The NTPs will provide an all terrain  four-wheel  drive  vehicle for use by
     the Scouting Team while it is undertaking  the  anthropological  assessment
     and  thereafter  for use by the Liaison  Officer in carrying out his or her
     duties pursuant to this Agreement.  Provided however that in the event that
     the Scouting  Team and the Liaison  Officer are both doing work  associated
     with the Scouting  Operations at the same time,  they will share the use of
     the vehicle.

8.   The said  vehicle will be insured by the NTPs and equipped by the NTPs with
     sufficient spare parts.

9.   The  NTPs  will  cause a  log-book  to be kept  and  will  ensure  that the
     following information is recorded in the log book in relation to the use of
     the 4 WD vehicle:

     (a)  date;

     (b)  place of departure;

     (c)  destination;

     (d)  reason for the journey; - 30 -

<PAGE>



     (e)  name of driver; and

     (f)  number of  kilometers  traveled in respect of each occasion that the 4
          WD  vehicle  is used  for or  incidental  to the  carrying  out of the
          Scouting  Operations  and will  make  the  log-book  available  to the
          Explorer upon request.

10.  The Explorer  will  reimburse  the NTPs for its costs in: (a) employing the
     services of the persons comprising the Scouting Team; (b) providing food to
     the Scouting Team; and (c) providing a 4 wheel drive vehicle for use by the
     Scouting Team in accordance with the scale set out in paragraph 12 herein.

11.  In the event that there are at any time more than three Traditional  Owners
     forming part of the Scouting Team the Explorer shall not be responsible for
     the  expense of the  additional  persons in such  group,  unless  otherwise
     agreed between the parties.


12.  Remuneration

     12.1 Scouting Team Members:

          12.1.2 The NTPs  members  (max.  four male and four  female at any one
                 time) Duty rate

     12.2 Food for  Scouting  Team:  

          The  Explorer  will pay the NTPs the sum of  $30.00  per day by way of
          food allowance in respect of each member of the Scouting Team for each
          day that such member is on duty in the License Area or  travelling  to
          or from the License Area.

     12.3 Four Wheel Drive Vehicle:
          The Explorer will pay to the NTPs the sum of 55 cents per kilometer in
          respect of the total number of kilometers  recorded in the log-book as
          having been  traveled by the 4 wheel drive  vehicle  where the vehicle
          was being used by the  Scouting  Team or the  Liaison  Officer  for or
          incidental to the carrying out of the Petroleum  Operations,  provided
          that the Explorer will not be required to pay the abovementioned  rate
          per kilometer in respect of kilometers recorded in the log-book unless
          the information referred to in paragraph 9 hereof has been recorded to
          the satisfaction of the Explorer










                                - 31 -


<PAGE>



                              Schedule 3

         Payments to the NTPs pursuant to Clause 6.1.3 of the Agreement
                in respect of Petroleum Operations under the PEL


1.   The  Explorer  agrees to pay to the NTPs an amount  equal to the  following
     percentages of Annual  Exploration  Expenditure  (as  hereinafter  defined)
     ("AEE");

     1.1  2.55% of such amount of AEE which is less than or equal to $500,000.00
          per annum; and

     1.2  1.5% of such amount of AEE which exceeds $500,000.00 per annum.

"Annual Exploration Expenditure" means:

All expenses  incurred in any one year in respect of exploration  carried out on
the License  Area as are  required to be  reported to the  Minister  pursuant to
Subsections  18d and e of the Petroleum Act, save and excluding such expenses as
may  reasonably be defined as  administrative  or  managerial in nature;  legal,
accounting and/or consultants fees;  off-site travelling costs together with any
other  expenses  which may  reasonably  be  characterized  as off-site  expenses
whether  or not such costs may be, or may be  required  to be,  included  in any
report of exploration expenditure provided to the Minister.

2.   Notwithstanding  the above  provision,  the Explorer will make a guaranteed
     minimum  payment of  $20,000.00  in  respect  of a  calendar  year in which
     on-site Petroleum Operations are carried out pursuant to the PEL.

3.   Subject to the terms and conditions set out in the Agreement,  the Explorer
     shall:

     3.1  prior to 23 May 1998 make the initial payment of the amount set out in
          paragraph 2 herein and  thereafter  annually  for the duration of each
          the PEL;

     3.2  within  ninety (90) days of the end of each calendar year make payment
          to the NTPs of the amount or  amounts  set out in  paragraph  1 herein
          less an amount in respect of any minimum payment pursuant to paragraph
          2 herein already made.

          If the report  pursuant to Sections 18d and 18e has not been forwarded
          to the Minister for Mines & Energy  within ninety (90) days of the end
          of each  calendar  year,  the Explorer is to make its best estimate of
          AEE  and  make  any  payment  due  on  the  basis  of  that  estimate,
          adjustments  shall be made within one month after the final  report to
          the Minister is submitted.

4.   For the purposes of this  Schedule  each  calendar  year shall be deemed to
     commence  as at the  date  of  grant  of the PEL  and  subsequently  on the
     anniversary of the date of such grant.


                                - 32 -


<PAGE>


                              Schedule 4

    Payments to the NTPs pursuant to Clause 6.1.4 of the Agreement
           in respect of Petroleum Operations under the PPL

1.   Application of Schedule 4

     Save as otherwise  provided in the  Agreement and in particular as provided
     in Schedule 5 hereto,  this Schedule shall apply to payments to the NTPs in
     the event  that the NTPs  elect not to  exercise  or is deemed  not to have
     exercised its rights pursuant to Clause 24.2 of the Agreement.

2.   Compensation Payments

Subject  to  paragraph  4 the  Explorer  shall pay to the NTPs in respect of the
production of all Petroleum, the following amounts by way of compensation:


     2.1  in respect of production up to and including  8,000,000 barrels of oil
          (or  barrels of oil  equivalent),  1% of the value at the well head of
          Petroleum produced and sold;


     2.2  in respect of production  from 8,000,001 to 14,000,000  barrels of oil
          (or barrels of oil equivalent),  1.5% of the value at the well head of
          Petroleum produced and sold;



     2.3  in respect of production from 14,000,001 to 20,000,000  barrels of oil
          (or  barrels of oil  equivalent),  2% of the value at the well head of
          Petroleum produced and sold;

     2.4  in respect of production from 20,000,001 to 30,000,000  barrels of oil
          (or barrels of oil equivalent),  2.5% of the value at the well head of
          Petroleum produced and sold;

     2.5  in respect of production  in excess of  30,000,001  barrels of oil (or
          barrels  of oil  equivalent),  3% of the  value  at the  well  head of
          Petroleum produced and sold.

3.    Calculation of Payments

The payments referred to in paragraph 2 herein are to be calculated as follows:

     3.1  Value  at the  well  head  of  Petroleum  produced  and  sold is to be
          calculated  in the same way that "value at the well head of Petroleum"
          is calculated pursuant to section 35(6) of the Petroleum Act where the
          sale price is bona fide and to an arms length purchaser  PROVIDED that
          the  "Guidelines  for Payment of Royalty and Provision of Information"
          issued by the Department of Mines & Energy of South Australia,  a copy
          of which is annexed  to this  Schedule  4,  shall be  applied  mutatis
          mutandis as if the reference to the royalty rate of 10% therein were a
          reference to the relevant percentage rate of compensation  referred to
          in paragraph 2 herein;

     3.2  subject only to paragraphs 3.3 and 3.4 herein,  the minimum sale price
          of oil shall be deemed to be $24.00 per barrel (the "floor price");

                                - 33 -

<PAGE>



     3.3  in the event of an  increase  in the sale  price of oil per  barrel of
          $2.00 or more above the floor price,  which increase  remains constant
          for a  minimum  period  of 30  consecutive  days,  then for each  such
          increase  of  $2.00  the  percentage  production  payments  set out in
          paragraph  2 herein  shall  increase  correspondingly  by an amount of
          0.125%;

     3.4  subject  to  paragraph  3.2  herein,  where the sale  price of oil per
          barrel decreases by $2.00 or more, which decrease remains constant for
          a  minimum  period  of  thirty  consecutive  days,  then for each such
          decrease  of  $2.00  the  percentage  production  payments  set out in
          paragraph  2 herein  shall  decrease  correspondingly  by an amount of
          0.125%;

     3.5  a ceiling  sale price of $45.00  per barrel of oil shall  apply to the
          percentage  increases  referred  to in  paragraph  3.3  herein  and no
          percentage  increase shall apply to sale price  increases in excess of
          $45.00 per barrel.

4.   Conversion rates from Oil to other Petroleum products

For the  purposes  of the  determination  of the  barrels of oil  equivalent  as
referred to in paragraph 2 herein, the following conversion table shall apply:

Petroleum Product             Volume          Equivalent to:
-----------------        ----------------    -----------------

Crude Oil                1 Barrel            1 B.O.E.
Sales Gas                1 Petajoule         174.937 B.O.E. x 10 3
Condensate/Naphtha       1 Barrel            0.935 B.O.E.
LPG                      1 tonne             8.458 B.O.E.


5.   Identification of Field Size

     5.1  The Explorer  shall  within a reasonable  time period and in any event
          within 5 years  from the date of grant of the PPL,  prepare a reserves
          assessment  report of the  producible  field,  subject  of the PPL and
          shall provide to the NTPs a copy of the report.

     5.2  The NTPs shall, within a period of six months from the date of receipt
          of the report  referred to in  paragraph  5.1  herein,  be entitled to
          dispute the finding made therein.

     5.3  In the event that the NTPs disputes the assessment in accordance  with
          paragraph  5.2 herein,  it shall  provide to the  Explorer a notice of
          dispute in writing  setting  out  detailed  reasons  for such  dispute
          within the said six month period.

     5.4  Where the NTPs do not notify the Explorer in accordance with paragraph
          5.3 herein,  the NTPs shall be deemed to have  accepted  the  Explorer
          report and the Explorer  shall be entitled to base their  calculations
          in respect of adjustment of compensation payments set out in paragraph
          6 herein on that assessment.




                                - 34 -


<PAGE>



     5.5  Where the NTPs notify the Explorer  pursuant to  paragraph  5.2 herein
          and an agreement  as to the volume of reserves  assessed in respect of
          the relevant  producible field cannot be reached,  the matter shall be
          resolved  by  reference  to an  independent  expert  appointed  by the
          parties who shall  determine  the extent of reserves and whose opinion
          shall be final and  binding  on the  parties.  Costs in respect of the
          appointment of the  independent  expert shall be borne equally between
          the Explorer and the NTPS.

6.   Adjustment of Compensation Payments - Field Decline

     6.1  If in the  Operator's  opinion the relevant field has gone or is to go
          into decline,  the Operator shall give the NTPs notice to that effect,
          and:

          6.1.1  the parties  shall  meet  and  negotiate  and  use  their  best
                 endeavors to agree upon a date on and from  which the  relevant
                 field has gone or is to go into decline (the "Relevant Date").

          6.1.2  the Relevant Date shall be determined on the basis of the field
                 reserves  assessment report referred to in paragraph 5.1 herein
                 which  shall  set  out the estimated  remaining  reserves  as a
                 percentage of  the  total estimated field and shall further set
                 out the point at which  the field  shall be deemed to have gone
                 or is to go into decline as a percentage of the total estimated
                 field (the "Relevant  Percentage")  PROVIDED  HOWEVER that  the
                 Relavant Percentage  shall be no less than 50% and no more than
                 70% of the total estimated field;

          6.1.3  if within 60 days from the  giving of the notice referred to in
                 paragraph 6.1 herein,  the parties  are  unable  to  agree, the
                 Chief Executive Officer of Mines & Energy South Australia shall
                 be requested to nominate and appoint an  independent  qualified
                 reservoir engineer who shall carry out a study to determine the
                 Relevant Date on and from which the relevant  field has gone or
                 is to go into decline and  who in  so  doing  shall  act  as an
                 expert and whose opinion and study shall be final  and  binding
                 on the parties.

     6.2  On and as from the Relevant Date, compensation payments to the NTPs as
          set out in paragraph 2 herein shall be reduced by an amount of 0.5% of
          the value at the well  head of  Petroleum  produced  and sold for each
          additional 10% of the total  estimated field produced in excess of the
          Relevant  Percentage,  PROVIDED HOWEVER that the minimum percentage of
          compensation  payable to the NTPs pursuant to this paragraph  shall be
          1.5% of the value at the well head of petroleum produced and sold.

7.    Time for Payment

Payments due to the NTPs as  calculated in  accordance  with  paragraphs 2 and 3
herein  shall be made by the Explorer  and/or the Operator  within 30 days after
the last day of each  calendar  month in which the Petroleum in respect of which
such compensation  applies was sold, or within 30 days after the last day of the
calendar  month in which  payment is actually  received by the party selling the
Petroleum or other Product, whichever is the earlier date.

                                - 35 -


<PAGE>



8.    Adjustment of Compensation Payments

     8.1  The  Explorer  shall at the  Explorer's  expense  provide to the NTPs,
          within 90 days after the end of each License Year  commencing with the
          License Year in which  production  of Petroleum  first occurs from the
          License  Area, a report  setting out the amount of Petroleum  produced
          and sold  during  the  preceding  License  Year,  calculations  of the
          proceeds  attributable  to the NTPs in accordance with this Schedule 4
          for such year, and providing such other  information as the NTPs shall
          reasonably request.

     8.2  If any such report  indicates that payments  actually made to the NTPs
          were less than the amount  reflected as being  payable,  the amount of
          the  difference  plus  interest at 2 percentage  points above the then
          prevailing  interest  rate as  charged  by the ANZ bank for loans less
          than  $100,000.00   shall  be  promptly  adjusted  by  an  appropriate
          balancing payment to the NTPs .

     8.3  If any such report  indicates that payments  actually made to the NTPs
          were greater than the amount reflected as being payable, the amount of
          the difference shall be promptly adjusted by an appropriate  deduction
          from the first month or months, as appropriate, payment to the NTPs of
          its due entitlements pursuant to this Schedule 5.

9.    Auditing

     9.1  The Explorer shall cause to be kept and maintained  complete books and
          records in respect of the NTPs entitlements  pursuant to this Schedule
          4 and shall retain such books and records for at least five years.

     9.2  The NTPs,  upon at least  thirty days  advance  written  notice to the
          Explorer  and/or any  interested  third  party or third  parties  (the
          "Third Party"), shall have the right, at its sole expense to audit the
          books and related  records for any License Year or proportion  thereof
          within the 12 month  period  following  the end of the License Year to
          which they relate.

     9.3  All bills and statements  rendered to the NTPs by the Explorer  and/or
          the Third Party during any License Year shall conclusively be presumed
          to be true and correct  after 12 months  following the end of any such
          License  Year  unless  within the said 12 month  period the NTPs takes
          written exception thereto and make claim for adjustment.

     9.4  The conducting of an audit shall not extend the time for the taking of
          written exception to and the adjustment of accounts as provided above.

     9.5  If any such audit  demonstrates  that  amounts  owing to the NTPs have
          been  underpaid  by more than 10%  then,  provided  the NTPs  protests
          within six months from the close of the calendar  year being  audited,
          in addition to promptly  making a balancing  payment with  interest to
          the NTPs , the Explorer  and/or the Third Party,  shall in  accordance
          with their respective  participation  interests reimburse the NTPs for
          the expense of the audit.




                                - 36 -


<PAGE>



                              Schedule 5

         Principles for Agreement on the grant of a Petroleum
                          Production License


1.    Definitions

Unless  otherwise  defined in this Schedule,  the Definitions of Clause 1 of the
Principal Agreement apply to this schedule.

  1.1 "Principal  Agreement"   Means the Agreement signed by the  NTPs  and  the
                               Explorer  on  ___  day of ________ 1998;

  1.2 "Petroleum  Operations"  Means the  operations  for  the  exploration  and
                               recovery of Petroleum, by the  Explorer  and  the
                               License Area and any  production therefrom;

  1.3 "Petroleum Operations
       Area                    Means  the  area of land required for the purpose
                               of the Petroleum Operations, including any access
                               roads   and airstrips on the tenement;

  1.4 "Joint Venture
       Agreement"              Means any agreement  entered into by the Explorer
                               and   a  third  party  or  third  parties  and/or
                               production  within  the License Area (the "JVA")

  1.5 "Joint Venture
       Participants"           Means all parties  (excluding  the NTPs)  to  the
                               JVA (the "JV Participants")

2.    Principles of Agreement

     2.1  Subject  to the Act and the  terms  and  conditions  of the  Principal
          Agreement the parties wish to record  certain  principles of agreement
          setting out terms and  conditions  as to payments  and other terms and
          conditions for the purpose of Clause 23 of the Principal Agreement.

     2.2  It is acknowledged  that at the date these principles have been agreed
          the  location,   quantity  of  reserves  and  characteristics  of  any
          Petroleum  deposits which may be discovered  are entirely  unknown and
          that,  between the date hereof and the date of an application  for and
          the grant of PPL, economic conditions (including government levies and
          taxes)  affecting the  development of Petroleum  wells and the sale of
          Petroleum products may alter considerably.

     2.3  The parties have agreed that any agreement entered into by the parties
          pursuant to Clause 23 of the Principal  Agreement  shall contain terms
          and conditions  incorporating  the principles set out in this Schedule
          and where the matter is not specifically  dealt with in this Schedule,
          as agreed.


                                - 37 -


<PAGE>


3.    Option to Take up Participatory Interest

The election right afforded to the NTPs in Clause 24 of the Principal  Agreement
shall be exercised as follows:

     3.1  The Explorer  shall by notice in writing advise the NTPs 30 days prior
          to lodging an  application  for grant of a PPL within the License Area
          with the Minister,  of their intention to lodge such application ("the
          Date of Notification").

     3.2  The  notification  referred to in paragraph  3.1 herein shall  include
          such  technical and financial  information  as necessary to enable the
          NTPs  to  make  an  informed  decision  whether  or not to take up its
          participatory   interest  pursuant  to  Clause  24  of  the  Principal
          Agreement and in particular such information  shall include details of
          past exploration  expenditure,  a copy of the PPL application,  and an
          assessment of  anticipated  future  expenditure in relation to the PEL
          and PPL.

     3.3  The NTPs may, within 30 days of the date the Date of Notification,  by
          notice given in writing to the Explorer and/or the JV Participants (as
          the case may be), make a once only election to take up a participatory
          interest  of up to 1 0 % but in any  event no less than 1 % in the JVA
          and  failure to so notify  the  Explorer  and/or  the JV  Participants
          within the said time period shall be deemed to be a forfeiture  on the
          part of the NTPs of their election  rights  pursuant to Clause 24.1 of
          the Principal Agreement.

          In  the  event  that  at the  time  of the  election  there  is no JVA
          applicable in respect of the License  Area,  the Explorer and the NTPs
          agree to enter into an  agreement  with each other for the  conduct of
          Petroleum  Operations within the License Area and such agreement shall
          be deemed a JVA as that term is defined in this Schedule S.

     3.4  The  NTPs  election  to take up its  participatory  interest  shall be
          conditional upon the NTPs entering into an undertaking to bear 100% of
          the costs and obligations of its  participatory  interest and the NTPs
          shall within 30 days of the Date of Notification,  pay to the Explorer
          and or the JV  Participants  an amount in respect of past  exploration
          expenditure  proportional to the NTPs elected  participatory  interest
          and failure to make such payment  within the said time period shall be
          deemed  to be a  forfeiture  on the part of the  NTPs of its  election
          rights   pursuant   to  Clause  24.2  of  the   Principal   Agreement,
          notwithstanding  any  notice  which may have been  given  pursuant  to
          paragraph 3.3 herein.

          For the purpose of this paragraph 3.4 "past  exploration  expenditure"
          shall include all costs charges and expenses related to the operation,
          administration and management of the PEL up to the date of election by
          the NTPs as provided for in Clause 24.2 of the Principal Agreement.

     3.5  Subject to paragraphs  3.3 and 3.4 herein,  the NTPs shall be entitled
          to take up their participatory  interest in any existing or subsequent
          JVA in respect of the License Area and the Explorer  covenant that, in
          the event that the  Explorer  enters  into a JVA with a third party or
          third  parties  prior to the Date of  Notification,  the terms of such
          agreement will be such as to protect the possible future participatory
          interest of the NTPs and will provide an appropriate mechanism whereby
          the NTPs is guaranteed the opportunity to elect to take up an interest
          in such JVA of up to 1 0%; - 38 -

<PAGE>



     3.6  3.6.1  Where a JVA applies in  respect  of  the  whole  of the License
                 Area, the NTPs  election  right  relates  only to the first PPL
                 applied for within  the  License  Area  and once  exercised  or
                 forfeited  cannot  subsequently   be  exercised in  respect  of
                 additional PPL's applied for  or  granted  within  the  License
                 Area.

          3.6.2  However, should the License Area be divided into sub-blocks  or
                 sub-areas then the NTPs shall have an election right in respect
                 of the first  PPL applied  for within each relevant  subarea or
                 sub-block.  Once  exercised  or  forfeited  in  respect  of any
                 particular sub-block  or sub-area  the  election  right  cannot
                 subsequently be exercised in respect of additional PPLs applied
                 for or  granted  within  that particular  sub-area or sub-block
                 but may be  exercised in  respect of  the first PPL applied for
                 within any  other-sub  area or sub-block  in respect  of  which
                 the  election  right  has not been  exercised  or forfeited.

     3.7  Subject to the anticipated  production from the PPL being  sustainable
          at the rate of 2500 barrels of oil (or oil  equivalent)  per day which
          decision  shall be made by the  Explorer  and where the NTPs  elect to
          take  up  its  participatory  interest,  the  Explorer  and/or  the JV
          Participants  shall cause to be made to the NTPs, upon commencement of
          actual  production  following  the  grant of a PPL an  annual  advance
          payment  of  the  following  sums  to be  deducted  from  compensation
          payments payable to the NTPs in any one production year:

          3.7.1where  annual  production  is less  than or equal  to  10,000,000
               barrels  of oil  (or  barrels  of  oil  equivalent),  the  sum of
               $100,000.00;

          3.7.2where annual  production is greater than 10,000,000 but less than
               or  equal  to  20,000,000  barrels  of  oil  (or  barrels  of oil
               equivalent), the sum of $150,000.00;

          3.7.3where annual  production  is greater than  20,000,000  barrels of
               oil (or barrels of oil equivalent), the sum of $200,000.00.

     3.8  The NTPs agree to comply with all of its obligations under the JVA and
          in particular agrees:

          3.8.1to satisfy any  shortfall  between  annual  advance  payments and
               obligations  in  respect  of  its  participatory   interest  (the
               "shortfall") from predicted production compensation payments; and

          3.8.2where   compensation   payments  are  insufficient  to  meet  the
               shortfall,  from any  dividend  payable to the NTPs in respect of
               its participatory interest in any one License Year.

4.    Application of Schedules 3 and 4 to these Principles of Agreement

Whether or not the NTPs elects to take up its  participatory  interest (or fails
to exercise its right to do so), compensation payments to the NTPs shall be made
in  accordance  with the terms of payment set out in Schedule 3 of the Principal
Agreement,  and where the NTPs elects to take up its participatory interest, the
payments referred to in Schedules 3 and 4 of the Principal Agreement shall be in
addition  to any  dividend  to which the NTPs may be  entitled in respect of its
participatory interest in the JVA.

                                - 39 -


<PAGE>



5.    Participation and Voting Rights

The NTPs  participation  in a JVA shall be on the same terms and  conditions  as
apply to other JV Participants  and the Explorer  covenants that any JVA entered
into shall  allow for the NTPs upon  taking up its  participatory  interest,  to
exercise full voting rights, and further covenants that no special voting rights
shall be given to any other JV Participant  without the express agreement of the
NTPs thereto.

6.    Independent Audit

Upon the giving of prior  notice to the  Explorer,  the NTPs  shall,  through an
independent auditor reasonably acceptable to the explorer, and whose appointment
shall be to the cost of the NTPs  have the  right to be  provided  with and have
access to inspect and copy information  relevant to the calculation of statutory
royalties  and to  the  calculation  of any  payments  payable  pursuant  to the
Principal Agreement and or this Schedule.

7.    Term of Agreement

The parties shall ensure that subject to Clause 30 of the  Principal  Agreement,
the JVA shall  continue in force until the  expiration of twenty-one  years from
the date of grant of the PPL.

8.    Extension of Term

The NTPs agree that, provided the Explorer has substantially complied with their
obligations  under the JVA, it will at the request of the  Explorer  made within
five years  prior to the date upon which the JVA  terminates  under  paragraph 7
herein,  enter  into good faith  negotiations  with the  Explorer  and any other
relevant  party or  parties  with a view to  reaching  agreement  on  terms  and
conditions for a renewal of the JVA after expiration  thereof,  and that it will
commence such negotiations within thirty days after receiving such request.

9.    Arbitration

In the event that the  parties  cannot  agree on the terms and  conditions  of a
renewal of the JVA then either the  Explorer  or the NTPs may serve  notice upon
the other requiring that they or it submit to arbitration to determine the terms
and  conditions for a renewal of the JVA and the  arbitrator's  decision will be
binding on the parties.

10.   Additional Terms and Conditions

In addition to the foregoing, the JVA shall contain such terms and conditions as
may reasonably relate to the Petroleum  Operations and to the use and occupation
of  the  tenement,   including   terms  and  conditions   dealing  with  matters
specifically dealt with in the Principal  Agreement which may be applied mutatis
mutandis or otherwise amended to fit the circumstances of the JVA.




                                - 40 -