MEMORANDUM
                                  
                PETROLEUM EXPLORATION LICENCE NO. 63


1.    This  Licence granted on 23 May 1996 is hereby entered  on  the
  Petroleum Registry

2.    A  security in the sum of $15,000 has been pledged with respect
  to this licence.

3.   Interests in the licence are:

     Hemley Exploration Pty Ltd  100%


A.J. Andrejewskis
Chief Executive Officer
DEPARTMENT OF MINES AND ENERGY
Delegate of the Minister for Mines and Energy

23/5/96
                                  
                                  
                         PETROLEUM ACT 1940

PETROLEUM EXPLORATION LICENCE NO 63


I, ANDREW JOSEPH ANDREJEWSKIS, Chief Executive Officer, Department of
Mines  and  Energy (CEO) in the State of South Australia pursuant  to
the  provisions  of  the Petroleum Act, 1940 and all  other  enabling
powers,  for and on behalf of Stephen John Baker, Minister for  Mines
and  Energy  (Minister), pursuant to delegation dated 14  June  1995,
(refer Government Gazette dated 15 June 1995 page 2845), HEREBY GRANT
to  HEMLEY EXPLORATION PTY LTD (ACN 073 039 059) of C/- Pannell  Kerr
Forster,  191 Flinders Street, Adelaide SA 5000 (hereinafter referred
to as the Licensee) a Petroleum Exploration Licence in respect of the
area set out below, to have effect for a period of five years and  to
expire  oti,-22@ -Aa& 2001 but carrying the rights of  renewal  under
the Petroleum Act 1940.

                         DESCRIPTION OF AREA

The land comprised in this licence is that part of the State of South
Australia described in the Schedule hereto being:

a)    land  that now is or was formerly the subject of a grant  of  a
  freehold estate or of a perpetual Crown lease where such an estate or
  lease was first granted before 31 December 1993

(b)   land  which  is  or was formerly subject to a lease  under  the
  Pastoral Land Management and Conservation Act 1989 (or any preceding
  legislation in relation to leases for pastoral purposes) except that
  this  licence  does not authorize the undertaking  of  any  act  or
  activity on such land that would be inconsistent with the rights of
  Aborigines preserved or conferred by section 47 of that Act.

or

c)    land  (other  than  any reserve under the  National  Parks  and
  Wildlife Act 1972) which has been, before 31 December 1993, reserved
  or dedicated for a public purpose and used before that date for that
  purpose in a manner wholly inconsistent with the continuing existence
  of common law native title rights.

                             CONDITIONS


1.   The Licensee shall at all times comply with:-

a)   the provisions of the Petroleum Act, 1940 and of any regulations
  for the time being and from time to time in force under the Act; and

b)    all directions given to it under the Act or the regulations for
  the time being and from time to time in force under that Act.
2.During  the ten-n of the licence, the Licensee shall carry  out  or
  cause  to  be  carried  out  exploratory  operations  on  the  area
  comprised  in  the licence in accordance with such work  programmes
  as  are  approved  by  the  Minister  from  time  to  time.   These
  exploratory operations shall include but not necessary  be  limited
  to:-

a)   in the first year of the term of the licence, Aerial Geological-
  Geomorphic  mapping  program, review all  data  available  and  the
  drilling of one stratigraphic well to a minimum depth of 1,800 metres
  at  a  total estimated cost of $645,000 (six hundred and forty five
  thousand dollars).

b)    in  the  second year of the term of the licence, plan  detailed
  seismic   survey,  record  a  minimum  of  70kml  of  seismic   and
  interpretation  of  seismic data and contour  mapping  at  a  total
  estimated  cost  of  $340,000  (three hundred  and  forty  thousand
  dollars).

c)    in  the  third  year of the term of the licence,  evaluate  the
  stratigraphic  well  data, prepare an environmental  impact  report
  prepare a drilling site by constructing an access road, the drilling
  of  one  exploration  well and evaluation of  results  at  a  total
  estimated  cost of $1,700,000 (one million, seven hundred  thousand
  dollars).

d)    in  the fourth year of the term of the licence, plan a drilling
  program for drilling a second well, prepare an environmental impact
  report, prepare a drilling site by constructing an access road, the
  drilling  of an exploration well to an anticipated depth  of  2,500
  metres  at a total estimated cost of $1,770,000 (one million  seven
  hundred and seventy thousand dollars).

e)    in  the fifth year of the term of the licence, review all data,
  prepare  a study on the potential of the petroleum reservoir  zones
  encountered and tested in both wells at a total estimated  cost  of
  $300,000 (three hundred thousand dollars).

3.    Within sixty days after the end of each year (being the  period
  of twelve calendar months ending on the anniversary of the date upon
  which this licence comes into force), the Licensee shall submit  to
  the  Minister a full and complete written statement of  expenditure
  actually made or caused to be made by the Licensee during due  year
  upon  approved  exploratory operations.         This  statement  of
  expenditures  shall  be  accompanied by a written  opinion  on  the
  veracity of the statement from an auditor whose qualifications  and
  independence from the Licensee are acceptable to the Minister.

4.    In  the event that the Licensee during any year of the term  of
  this  licence  (a  year being the period of twelve calendar  months
  ending on the anniversary of the date upon which the licence  comes
  into  force)  fails  to  comply  with  the  exploratory  operations
  requirements of this licence, it is an express term of this licence
  that  the  Minister then may at his discretion either  cancel  this
  licence  or authorize such variation to these requirements  as  the
  Minister thinks fit.

5.    An application to drill a well within the area comprised in the
  licence shall include written proposals of the Licensee, in relation
  to  the  bringing  under control of the well,  in  the  event  that
  effective control of the well is lost, and to the clean-up  of  oil
  spills, including financial proposals such as well control insurance,
  public liability insurance or other means to cover the costs involved
  in such operations.

6.Not  less  than thirty days before the commencement  of  each  year
  (being  the  period  of  twelve  calendar  months  ending  on   the
  anniversary of the date upon which this licence comes into  force),
  the  Licensees must arrange to meet, in person, with the CEO or his
  representative  to  review  the  progress  of  the   programme   of
  exploration  for  the  current  licence  year,  and  to  present  a
  proposal  for  the  programme of exploration  for  the  forthcoming
  year.

7.    If  at  any time the work being carried out or intended  to  be
  carried out by, or at the cause of, the Licensee is in the opinion of
  the CEO not in accordance with the sound principles and practices of
  petroleum exploration, he may give the Licensee written directions as
  to  the  work  carried out or intended to be carried out,  and  the
  Licensee shall comply with those directions.

8.     In   addition  to  the  reports  specified  in  the  Petroleum
  Regulations, 1989, the Licensee shall promptly prepare and submit to
  the  CEO  in  a  form acceptable to him, detailed  reports  on  all
  exploratory operations done or caused to be done by or on behalf of
  the Licensee within and in relation to the licence area.

Signed by the Chief Executive Officer,

Department of Mines and Energy at Adelaide

this 23 day of May 1996

                                             Chief Executive Officer
                                      Department of Mines and Energy
                                        Delegate of the Minister for
                                                    Mines and Energy

Signed sealed and delivered
by the said LICENSEE at Adelaide

this 15th day of May 1996

The Common Seal of HEMLEY EXPLORATION PTY LTD
was hereto affixed by


                PETROLEUM EXPLORATION LICENCE NO. 63

                            THE SCHEDULE

                         Description of Area

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

Commencing at a point being the intersection of latitude 27 00'S  and
longitude  134 IO'E,  thence  south  to  latitude  28 IO'S,  west  to
longitude  133 3  I'E, south to latitude 28135'S, west  to  longitude
133'00'E, north to the southern boundary of the Pitjantjatjara Lands,
thence  generally northeasterly along the boundary of the said  Lands
to latitude 27 1 OO'S, and east to the point of commencement, all the
within latitudes and longitudes being geodetic and expressed in terms
of   the  Australian  Geodetic  Datum  as  defined  on  p.  4984   of
Commonwealth Gazette number 84 dated October 6, 1966.

AREA: 10,930 square kilometres approximately.