Karoon Spuds Emu-1 Well, Offshore Brazil

Karoon has kicked off the drilling of its second Santos Basin exploration well, with the spudding of the Emu-1 exploration well at 04:30 hours (Brazilian Summer Time) BRST on 10 February 2013.

Emu-1 is located within Blocks S-M-1102 and S-M-1037, and has multiple targets at several geological levels including the Santonian, Campanian and Miocene. The well is expected to continue into the beginning of April 2013 with results being released as they become available.

Upcoming Well Program

Bilby-1 is expected to be the third well in the Santos Basin exploration drilling campaign. This well is located in Block S-M-1166 and also has multiple targets at several geological levels, including the Santonian, Campanian and Eocene.

Completion of the three Santos Basin wells will satisfy the minimum work commitments for Block SM-1101, S-M-1102, S-M-1037, S-M-1165 and S-M-1166.

Block Background

Karoon’s Santos Basin Blocks are located 112 kilometres off the coast of the Santa Catarina region of Brazil, south of Rio de Janeiro, in 400 metres of water depth. The first Santos Basin exploration well, Kangaroo 1, discovered oil in Eocene aged rocks. This discovery will be appraised in a follow up well to be drilled as soon as a suitable drilling rig can be sourced and mobilised to the Kangaroo-2 location. The Santos Basin has recently yielded multiple oil discoveries and is becoming an exciting area for exploration. Karoon was awarded 100% participation in the Blocks during 2008. The five Blocks total 865 square kilometres. In the period since acquiring the Blocks Karoon has completed a large array of technical work including Wide Azimuth 3D Seismic.

In the shallow water Santos Basin, several recent discoveries have also been made which have similar geological characteristics to Karoon’s Blocks, such as the Sabia, Piracuca, Tiro, Sidon, Guaiama, Panoramix and Vampira discoveries all in the same trend as the previously discovered Merluza, Mexilhao and Caravela fields. These fields have collective in place resources in the billions of barrel of oil equivalent in-place.

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February 11, 2013