On January 13, 1981, the government of the State of South Australia granted to Shoreline Exploration Company Permit EPP18 for hydrocarbon exploration on a 2,000 square mile area covering the northern offshore portion of the Otway Basin. The permit area was selected by Shoreline on the basis of onshore exploration experience since 1959. Because of the area's thick sequence of Tertiary and Upper and Lower-Cretaceous sediments, as well as other factors described in this report, it appears to be the most promising part of the basin.