Kimberley Oil has the rights to earn a 75% interest and is the operator of the project with Joint Venture partner Heritage Petroleum.

The Sulcis project area covers 615.2sq.km in south western Sardinia, Italy and is situated about 40km west of Cagliari, the Sardinian capital, covering the historical coal mining district of Carbonia including the large industrial port of Portoscuso.

Geologically, the permit area contains almost the entire Sulcis Basin, which holds estimated sub-bituminous coal resources of over 1,000 million tonnes. This coal-bearing sequence, the Produttivo Formation, is 150m thick and contains up to 13 coal seams with cumulative coal thicknesses of 35 to 40m. Total coal production from the basin, to date, has been 80 million tonnes.

The program proposed by the Joint Venture includes a continued comprehensive assessment of the historical geological and mining database in preparation of initial reservoir valuation drilling in the first half 2004.

The Sulcis project is located near the Portoscuso industrial center, which includes a 340MW coal fired power station and an Alcoa owned aluminum smelter, and domestic gas markets.

As announced in April, the company entered two agreements with Heritage Petroleum. One agreement covers three application areas in France (Bleue Lorraine, Gaz de Gardanne and Gaz de Saint Etienne) with the other agreement covering one application in Italy (Sulcis).

In France, it is anticipated that approval for Bleue Lorraine will be granted in the coming months while Gaz de Gardanne and Gaz de Saint Etienne are likely to be granted within the next 6 to 8 months.