Karoon Gas Australia Updates on Grace-1 Drilling

Karoon Gas Australia said that on 20 January, Grace‐1 was drilling ahead at 4,844 metres in the 6‐1/2” hole section. The current hole section is expected to contain the primary Lower Plover formation target.

Since the 3rd January 2014 Grace‐1 progress report, remaining of rig post tropical Cyclone Christine was completed along with scheduled Blowout Preventer (BOP) testing and minor post cyclone equipment repairs.

On completion of the rig preparation and repairs, drilling from 4,767 metres resumed in the 6‐1/2” hole section. Current well depth is 4,844 metres.

Grace‐1 is the fourth well in the current exploration program, located in permit WA‐314‐P on a separate structural trend to the previously announced Greater Poseidon gas discoveries. The well is located in a crestal position on a large fault block approximately 35 kilometres north of the Poseidon field.

ConocoPhillips is the operator of the jointly held WA‐314‐P Browse Basin permit in which Karoon Gas Australia holds 90%.

The Transocean Legend semi‐submersible rig is drilling the exploration well.

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Press Release, January 21, 2014