1.   Lay solid foundations for the Board and Management

The Board of Directors has the over-all responsibility for the management and governance of the company. The Board sets and implements the objectives and strategy of the company. The management company assists in carrying out these tasks and provides day to day accounting, administration and management services.

The Board reviews the reports of the management company on the operational and financial performance of the company. There are no formal statements as to the delegated authority of management. However the Board reviews all operations of the company and monitors and manages business risk, and ensures adherence to appropriate ethical standards.

2.    Structure of the Board

Directors' qualifications and experience are outlined in the Directors' Report. No members of the current Board are considered independent by current definitions. There are no executive Directors at present, nor do any Directors draw any salary. Consultants are retained as and when required.

The Board comprises the minimum number of Directors, due to the size of the company and for reasons of cost-effectiveness.

Whenever appropriate, the size and composition of the Board may be reviewed to achieve the company’s longer term aims and objectives.

It has not been considered necessary to establish a Nomination Committee, due to the size of the company. The company has neither special procedures nor policy in place in respect of the appointment or retirement of Directors, apart from the provisions of the company’s constitution.

The Board has not established any committees to evaluate the performance of Directors and has not adopted formal performance
enhancement evaluation procedures, due to the size of the company.

There are no set procedures for Directors to seek independent professional advice at the company's expense but each Director would be able to seek independent advice and any request for payment of such costs would be treated on a case by case basis.

3.   Promote ethical and responsible decision-making

The Board expects all Directors to perform their duties in a manner which is ethical, responsible and objective and at all times endeavour to maintain and improve the performance and reputation of the company. A code of conduct as recommended in best practice recommendations 3.1 and 10.1 has not been formally established as the Board consistently ensures that all members of the Board have a clear understanding of their duties, responsibilities and their accountability to the company, its shareholders and stakeholders for their conduct.

The company has issued a policy guideline concerning trading in company securities by Directors, officers and consultants which imposes certain restrictions on trading and which, inter alia, requires the person to pose the question: "Is it right to deal at this stage?"

4.   Safeguard integrity in financial reporting

Auditors of the company can be nominated by shareholders. There are no other procedures in place at present. There is no formal Audit Committee, as the majority of Directors are involved in performing the functions of an Audit Committee and reviewing the adequacy of existing audit arrangements.

5.   Make timely and balanced disclosure

The Board, through its continuous disclosure policy, the maintenance of a web site, and the holding of annual meetings, where shareholders are encouraged to participate, seeks to keep shareholders fully informed of significant developments in an efficient and timely manner.

The company aims to provide relevant and timely information to its shareholders and the broader investment community in accordance with its continuous disclosure obligations under the ASX Listing Rules.

The Board has established policies and procedures to ensure compliance with ASX Listing Rules disclosure requirements and accountability at Director and management level for that compliance. The Board believes that the formalisation of these policies and procedures in a written form per best practice recommendation 5.1 is not necessary as the Board is satisfied that all Board members are acutely aware of the importance of making timely and balanced disclosure.

The Chairman and/or the Company Secretary have been nominated as the persons responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX and the public.

6.   Respect the rights of shareholders

The Board encourages the participation of shareholders at Annual General Meetings to ensure a sound rapport between shareholders and the company. The Board ensures that the Auditor attends Annual General Meetings. On request, information is made available to shareholders by e-mail, facsimile or post.

7.   Recognise and manage risk

Usual standards of identifying significant business risks are applied by the Board. Exploration for oil and gas can be viewed as high risk/high reward speculative activity. The Directors' collective experience and knowledge are relied upon in managing significant risks in such a way as to ensure that no single project would jeopardise the company’s total operations.

Specific areas of risk are identified in view of the inherently risky exploration industry and depending on the sovereign risk of any specific country in which the company may be operating.

Appropriate confirmations were received from the Chairman and Chief Financial Officer that the financial reports are based on sound systems of risk management and internal controls and policies developed by the Board.

Relative to its operations and size, the Board has not established a risk management committee but believes that the company has adequately identified potential business risks and continues to operate effectively in material respects in relation to financial reporting risks.

Business risk

The Board monitors and receives advice as required on areas of operational and financial risk, and considers appropriate risk management strategies. Specific areas of risk that are identified are regularly considered at Board meetings. Included in these areas are performance of activities, continuous disclosure obligations, asset protection and financial exposures.

8.   Remunerate fairly and responsibly

Disclosure of remuneration policy and procedures:

8.1 The Board is responsible for determining and reviewing the remuneration for themselves, within parameters approved by shareholders, and of executives and consultants when appointed.  At this stage no performance hurdles have been imposed as there are no executive Directors.

8.2 As described in the Directors' statutory report, the Board is comprised of non-executive Directors. The administration is outsourced and the company retains the services of experienced consulting Geologists on a part-time basis at competitive rates.

8.3 Directors, without a Remuneration Committee, have agreed that the present modest remuneration scale of a maximum of $8,000 per Director per annum should remain in place, which is below the aggregate amount approved by shareholders.

8.4 Although the Chairman often acts in an executive capacity, he receives no remuneration for that function. Remuneration of executives and consultants, when appointed, would be determined by market conditions. No equity based payments or other benefits were paid to Directors or consultants during the year under review.