Karoon Farms into North Carnarvon Basin Permit, Australia

Karoon Gas Australia through its subsidiary Karoon Gas (FPSO) Pty Ltd, executed final agreements for Karoon to acquire a 100% interest in WA-482-P in the North Carnarvon Basin, Australia, from USA Indepedent Liberty Petroleum Corporation.

In consideration for the equity in the Permit, during the first two work permit years, Karoon will manamgent the permits and be solely responsible for the programmes, budgets and expenditure on the Permits.

Karoon has conducted a significant amount of due diligence over this acreage before its recent award to Liberty, and is pleased that it has the opportunity to add prospective acreage at the beginning of the exploration lifecycle to complement its more mature exploration acreage which has reached the drilling phase.

Karoon believes that the transaction was executed on favorable terms allowing Karoon freedom to explore the block in the early stages but avoid a large capital commitment if it chooses to exit before Year 3.

Key Terms

• Karoon is required to meet the year 1 and 2 work program commitments, as outlined below:

o Year 1: License 3,800 km² of reprocessed 3D seismic data and approximately 5,000 line km of reprocessed 2D seismic data; and

o Year 2: Acquire and process 2,010 km² of 3D seismic data.

• Following completion of the second year of the Permit term, Karoon has withdrawal rights under the farmin agreement and would be removed from title after Year 2 and, importantly, before Year 3 well commitment in is due.

If Karoon elects to acquire the Permit, such assignment will be conditional on regulatory approval.

• Liberty is entitled to certain milestone cash bonuses and a royalty in the event of production.

• Karoon is responsible for conducting all operations on the Permit during the farmin period.

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LNG World News Staff, September 21, 2012