Karoon Farms‐Out 50 Pct Interest in WA‐482‐P to Apache

Karoon Gas FPSO Pty Ltd, a wholly owned subsidiary of Karoon Gas Australia Ltd, has entered into a Farm‐out Agreement to farm‐out a 50% interest in Carnarvon Basin Exploration Permit WA‐482‐P to Apache Northwest Pty Ltd a wholly owned subsidiary of Apache Corporation.

Pursuant to the Farm‐out Agreement, Apache will acquire a 50% interest in the Permit on the following terms:

1. Pay Karoon US$9.04 million in reimbursement of seismic acquisition costs;

2. Fund 90% of the drilling costs for one exploration well capped at a value of US$63 million. This exploration well will fulfill the Permit Year 3 work obligations;

3. Assume operatorship of the Permit;

4. Commit to drill an exploration well in first half calendar year 2015.

”We are delighted to welcome Apache as a joint venture partner in the Permit. Apache is an established and significant operator in the Carnarvon Basin with an active 13 well off‐shore Western Australian drilling program in 2014. Apache brings to the table an excellent track record of bringing projects into production in Australia and they are one of the largest suppliers of gas into the heavy industrial based Western Australian domestic gas market. This transaction is a significant milestone for Karoon, and a further endorsement on Karoon’s ability to identify exciting, very large early stage exploration opportunities,” said Mr Robert Hosking, Executive Chairman.

Press Release, May 16, 2014