Karoon in Quest for Rig, Partner for Exploration Offshore Peru

Karoon Gas Australia has announced that it has passed final regulatory hurdles to commence drilling in Block Z‐38 located in the offshore Tumbes Basin, 10 kilometresfrom the north west coast of Peru. Directorial Resolution N° 163‐2013‐MEM/AAE was passed on the 19 June 2013 and approved the Environmental Impact Study to drill up to 10 exploration and 10 appraisal wellsin Block Z‐38. 

Karoon is currently in the planning stage to drill at least two wells in Peru and long lead items are being delivered. The approval of the Environmental Impact Assessment allows Karoon to actively search for a drilling unit to start the first exploration drilling campaign. The campaign is expected to commence late in the first half of calendar year 2014 and discussions are underway to farm down Karoon’s 75% interest in the Block.

The upcoming drilling campaign is the result of four years of geotechnical work including 2D and 3D seismic  acquisition, processing and interpretation, the recovery of drop cores, offset well analysis and regional geological studies. Northern Peru has produced over 1.6 billion barrels of oil since 1863, making it the second oldest oil producing region in the world. Oil samples recovered from drop cores in Block Z‐38 and nearby production prove the presence of oil and gas within Block Z‐38 however, the exploration drilling in the Block will be the first drilling in waters over 150metresin 20 years. The water depth is approximately 400metres. Karoon has Degolyer and MacNaughton certified gross mean prospective resource of 2.4 billion barrels of oil equivalent, distributed over 15 prospects, with three main prospects having over 300 million barrels each. Recent work has provided additional prospectivity in similar geology to the nearby Corvina and Albacore fields, located in Block Z‐1.