• I 361001 I I OIL AND GAS m I TASMANIA I I AN INVESTMENT I OPPORTUNITY I MICROFILMED I FICHE No.Ol4I£5- I GREAT SOUTHLAND MINERALS PTY LTD ACN 068 650 386 I October 1996 I I CONTENTS The Investment Proposal The Taxation Benefit I Details of the Company Memorandum and Articles Financial Statements I The Exploration Agreement The Agency Agreement The Application for Approval I Application for Shares I I, I, I • 361002 I The following information explains in some detail our proposal for participants wishing to capitalise on an oil and gas exploration program in Tasmania and at the same time I receive a substantial tax deduction The principal objective ofthis proposal is to raise sufficient capital for the company I "Great Southland Minerals P/L" to complete its exploration program. The company is seeking ten investors, each contributing $250,000, to fund its on-going I exploration program. I THE PROPOSAL I INVESTOR / ~ I Agreement A Agreement B Great S~land ~anian I Minerals PIL Management Services PIL I How TO INVEST I The investor enters into an agreement (Agreement A) with Great Southland I Minerals P/L which enables him/her to carry out exploration for oil and gas under the company's licences I 2 The investor enters into an agreement (Agreement B) with Tasmanian Management Services P/L for it to carry out and administer the exploration and I drilling program on behalf ofthe investor. 3 The investor deposits on trust $250,000 with Tasmanian Management Services I P/L, which - on behalf ofthe investor - then contracts a seismic company and a drilling company to carry out the exploration program, arranges all associated I works, and organises the interpretation ofthe data. 4 The investor will be entitled to receive 5% ofall nett income derived from this I exploration program for a maximum period of 5 years 5 The investor will be entitled to purchase 2.5% ofthe issued share capital of I Great Southland Minerals PIL, at $3 per share, totalling $5,576 Therefore the total amount invested is $255,576, ofwhich $250,000 is a tax deduction I NB Tasmanian Management Services PIL is presently contracted to Great Southland Minerals PIL (GSM) to provide management expertise. Its directors are I Dr Julian Amos (Managing Director, GSM) Mr David Walker (Company Solicitor, GSM) I I • 361003 I PRIvATE OFFER I We must stress that this is a private otTer, and will not be offered to the general public or more than twenty (20) people. The offer is only open for a limited period. The company is currently continuing exploration work and may withdraw this offer at any I time. I I THE COMPANY Great Southland Minerals Pty Ltd ACN 068 650 386 is a private company dedicated to I the exploration for oil and gas in the onshore Tasmanian Basin I ATTACHMENTS Attached to this proposal are the company articles and company certificate, financial I statements and balance sheet, copies ofAgreements A and B, an application for Ministerial Approval, and an Application Form for shares. I Also attached are two documents: a company profile detailing activity to date, and details ofthe company's on-going exploration program. I I INVITATION I Interested parties or investors are invited to inspect the current drilling program. I DISCLAIMER I Note: Exploration is considered to be a speculative activity. Therefore investing in exploration has to be considered as a speculative investment. The company, its I directors and shareholders do not guarantee the return ofcapital or performance ofthis investment otTer. Investors must clearly understand the nature ofthis I investment offer and that total loss ofcapital invested is a possibility. The company believes the investment in this offer to be an appropriate tax deduction I and has obtained advice to this effect. However taxation advice should be sought and obtained by the investor to confirm whether the taxation deductibility applies to their I particular circumstances. I I • 361004 I I GARITY HURD & PARTNERS PTY LTD A.C.N. 009 562 878 I CHARTERED ACCOUNTANTS I 2nd September, 1996. JlliIJMD I The Directors Great Southland Minerals Pty Ltd 24 Jackson Street I GLENORCHY TAS 7010 I Dear Sirs, RE: TAXATION DEDUCTION I OIL & GAS EXPLORATION The Income Tax Assessment Act (ITAA) provides for significant income tax I concessions for those engaged in oil and gas exploration pursuant to Division 10AA. Specifically Section 124AH of the ITAA allows for a deduction from income from any I source of expenditure incurred in exploration and prospecting. Such expenditure can include geological, geophysical and geochemical surveys and exploration and appraisal I drilling (S 124AH(7)) To qualify for a deduction you must be engaged in prescribed petroleum operations I which are defined as operations carried out for the purpose of obtaining petroleum products for the purpose of gaining or producing assessable income. As this is the company's dominant purpose, Great Southland Minerals Pty Ltd would qualify for I deductions. Further, where a person sublets a petroleum right to another person in a "farm out" I arrangement and that right entitles the sublessee to a proportion of the product ofthe exploration then the sublessee would be engaged in prescribed petroleum operations and entitled to a deduction for any qualifying exploration expenditure. It is appropriate I however, that any person who "farms in" on your operation seek their own advice in this regard. I Yours faithfully, I GARITY HURD & PARTNERS PTY. LTD. I 1 JO HAMPDEN ROAD A MEMBER FIRM OF THE FELSERS I HOBART 7000 TASMANIA AUSTRALASIA ACCOUNTANCy GPO BOX 392D. HOBART 7001 GROUP WITH REPRESENTAnON IN TELEPHONE (03) 6234 7533 ALL STATES AND ASSOCIATED I FACSiMILE (03) 6223 7631 INTERNAT!ONAl FIRMS • 361005 I THE COMPANY STRUCTURE I Board of Directors I The company is run by an 8 member Board. Officers include: Chairman Dr Gordon Wise I Managing Director Dr Julian Amos Company Secretary Jason Slot I Accountants Garity Hurd, Chartered Accountants Solicitors Barnett and Walker, Solicitors I It has eleven shareholders. I FINANCIAL STRUCTURE Great SoutWand Minerals P/L has I • a nominal capital of$1 million, made up of 1 million shares at a par value of$1 each I • presently on issue 55,866 fully paid shares I COMPANY ASSETS I The assets ofthe company are the exploration licences and the data collected I Exploration Licences The company owns three exploration licences covering most ofthe prospective part of I the Tasmanian Basin. These are EL 1/88, EL 9/95 and EL 21/95 The Tasmanian Mines Department automatically renews these licences, subject to an annual works program being completed to its satisfaction. The Department has agreed I to a proposal from the company to regard the works program for all licences as though they are the one licence I Data Research conducted by the company, either directly or through sponsorship, and the I drilling program undertaken to date has proven the prospectivity ofthe Tasmanian I Basin. For further details, see the attached company profile. • Quantities of natural gas have been found in the exploration wells drilled to date I • An oil seep has been discovered by the Mines Department within the company's licence area I I • 361006 I FINANCIAL POSITION I The company is free ofdebt. All capital raised will be spent on ongoing activities I EXPENDITURE TO DATE Prior to the establishment ofthe company, money spent on the project amounted to I over $4.5 million. Company shareholders have spent an additional $1.5 million. Other companies, organisations and groups that have been involved in the project include I BHP Shell AGSO BMR I Tasmanian Mines Department CSIRO Condor Oil University ofTasmania I PRESENT ACTIVITY I The company has presently contracted GOMICK Drilling P/L to drill an exploratory hole at Bruny Island, in the south ofTasmania. Quantities ofnatural gas, comprising methane and hydrogen, have been encountered. The Premier ofTasmania, Tony I Rundle MHA, has inspected the site, and expressed enthusiasm and support for the company's activities I An oil seep has recently been discovered in the Huon area by the Tasmanian Mines Department, showing all ofthe "fingerprints" ofa significant oil show. The seep falls within the company's licence boundaries. The company is excited by this find and has I proposed a drilling program to further investigate this discovery I THE TASMANIAN MARKET FOR OIL AND GAS I Commercial quantities ofgas will find a ready market in Tasmania. • The state is presently considering its future power options • Major companies presently operating in Tasmania have expressed great interest in I the company's exploration program • The HEC has commented that it would wish to enter into negotiations with the I company, on the discovery ofcommercial quantities ofgas I CAPITAL REQUIREMENTS The company is seeking an amount up to $2.5 million to assist it in its ongoing exploration program. This funding will provide sufficient capital to carry out I appropriate seismic work, to drill a further 6 exploration holes, and to provide appropriate administrative and technical support. I Such a program will go a long way to prove up the extent ofprospectivity and the commercial opportunities ofthe Tasmanian Basin I I I 361007 I I I Certificate of Registration on Change of Name AUSTRALIAN S[CLJRIT1ES I Corporations Law Sub-section 171 (12) COMMISSION I This is to certify that GREAT SOUTH LAND OIL PTY. LTD. I Austl'alian Company Number 068 650 386 did on the third day of April 1995 change its name to I GREAT SOUTH LAND MINERALS PTY LTD I Australian Company Number 068 650 386 The company is a proprietary company.