Empire Awarded Two Permits in Carnarvon Basin

Empire Oil and Gas NL through its wholly owned subsidiary, Rough Range Oil Pty Ltd, together with three Joint Applicants, Eagle Bay Resources NL, Icon Energy Pty Ltd and Rawson Resources NL have been advised by the Department of Mineral and Petroleum Resources that the Minister for State Development is prepared to grant permit applications Nos L/01-2 and IT/01-2 located in State Waters, offshore Carnarvon Basin, Western Australia.

The Joint Applicants each have a 25% equity in each of the permit areas. The acceptance of these two permit areas by Empire compliments the Company's interest in the oil prospectivity of the Carnarvon Basin.

Empire Oil & Gas NL considers that these two permit areas on the Energy Terrace of the Carnarvon Basin have the potential to contain economic oilfields. The combined permit areas are located within very shallow waters of the shelf approximately 50 kilometers west of Dampier and approximately 12 Kilometers south west of the Stag Oilfield.

Two wells in the next quarter are planned to be drilled by the Ensco 56 jackup and are located nearby to the new permit areas. These wells are Ceres No 1 located approximately 12 km north west and Allostratus No 1 located 8 km due west and have similarities prospects mapped to date in the permit application areas.

The most prospective reservoir units, the "greensand" reservoirs occur within the lower Cretaceous Muderong Shale which is the regional sealing unit in the major hydrocarbon accumulations in the Barrow and Dampier Sub Basins and also the Exmouth Sub Basin onshore. (The Muderong Shale is the sealing unit in the Company's Rough Range 1B Oil Field). The Stag and Wandoo Oilfields are on trend and to the north west of the permit applications. The presence and proximity of the Stag Oilfield, also confirms oil migration into the Shelf and is a model for oil migration into the Permits.

Empire looks forward to progressing the development of the prospects in the permit areas. Technical work planned for the next 12 months period upon official grant of the permits will include the reprocessing and the re-mapping of the existing seismic data set together with geological and other geophysical studies.