Recon Exploration Pty. Ltd. has successfully completed initial testing of a new method for processing and interpretation of AGSO's (Australian Geological Survey Organization, formerly Bureau of Mineral Resources) aerial gamma-ray spectrometer data for petroleum exploration in the Canning Basin, Western Australia and the Otway Basin, Victoria. Count-rate data for potassium and uranium were normalized to the thorium count rate for each sample to suppress unwanted effects of variations in surface lithology or soil type, soil moisture, vegetation cover, and counting geometry.The Canning Basin test area included five producing oil fields. All except one clearly exhibit significant and characteristic radiometric anomalies which include negative normalized potassium and more positive normalized uranium values. The Otway Basin test areas included PPL-1 commercial gas production which is associated with a group of significant radiometric anomalies similar to those in the Canning Basin. These results are similar to extensive ongoing tests in the U.S. and are explained in terms of well-understood geological, geochemical, and geophysical models.Based on 69 wells in the three test areas, it is estimated that the chance of encountering hydrocarbons (economic production or shows) in wells within the radiometrically favorable zones is about 2.6 times greater than outside the favorable areas.