Under the HOA, AWE will acquire Strike's 50% interest in Vic P/44 (containing the Casino gas field) for a cash payment of $1 million and the funding of Strike's share of expenditure for the drilling of the Casino-3 appraisal well. The drilling activity is expected to be in the 4th quarter of 2003.

There is also an optional payment of $22.5 million, payable up to 90 days after the rig release from the Casino-3 well. If AWE elects not to make the final payment, AWE will earn a 20% interest only in the Vic P/44 permit.

"The acquisition is made with the intention of providing a third cornerstone asset for the company, along with the company's existing Bass and Perth Basin interests," said AWE managing director Bruce Phillips.

"In the meantime a Casino appraisal well, currently anticipated for the 4th quarter of 2003, will add further drilling exposure to AWE over the next 6-9 months. It will add to the exciting programs already planned for the Perth and Bass basins in Australia, and the Taranaki basin in New Zealand."

The Casino gas field was discovered by a joint venture including Santos (50% and operator) and Strike Oil (50%).

The initial discovery was made in September 2002, with the Casino-1 well encountering a 50m gas column in the Waarre Formation.

The Casino-2 well, completed in October 2002 successfully appraised the discovery by penetrating a 38m gas filled sand, downdip from the discovery well.

The planned Casino-3 well will further appraise the discovery and is designed to add to the proven recoverable gas reserves in the field in order to move quickly to a commercial development decision.

Participants in Vic P/44, following completion of this transaction will be Australian Worldwide Exploration 50% and Santos (operator) 50%.