Australia: Karoon Gas Enters Browse Basin Phase-2 Drilling Program

On the 4th of July, Karoon Gas Australia Ltd through ConocoPhillips, the operator of its three Browse Basin blocks, received the required approvals to commence drilling from the Australian Government’s Department of Sustainability, Environment, Water, Population and Communities (DSEWPC) and is now moving quickly into the Phase-2 drilling program.

Final drilling contracts for the five to eight well campaign are currently being negotiated. We expect the drilling program to commence in the fourth quarter 2011. Drilling operations are estimated to run for eighteen months to two years.

With the new Poseidon 3D seismic acquisition and processing completed, the Joint Venture has identified a range of exploration targets near the greater Poseidon/Kronos structure.

At least four wells are planned for the WA-315-P and WA-398-P permits, which contain the previously announced Poseidon and Kronos gas discoveries, with one well planned for the WA-314-P permit. The results of the drilling campaign will allow the size and quality of the hydrocarbon accumulations within the exploration permits to be determined in preparation for a development decision. Karoon believes that the additional new  prospects identified are of sufficient size that, if successful, would result in a meaningful increase in the capacity and economics of an eventual LNG project.

The offshore Browse Basin is located 350 km offshore from the North-Western Australian coastline.

Permit interests of the participants in WA-315-P and WA-398-P are:

Karoon Gas (Browse Basin) Pty Ltd 40%

ConocoPhillips (Browse Basin) Pty Ltd (Operator) 60%

Permit interests of the participants in WA-314-P are:

Karoon Gas (Browse Basin) Pty Ltd 90%*

ConocoPhillips (Browse Basin) Pty Ltd (Operator) 10%

*Karoon’s additional 50% interest in WA-314-P is subject to regulatory approval.

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Source: Karoon Gas, July 4, 2011;