proteus announcement, page-25

Bob's comment on Proteus was that the delays are due to the high pressure of the well and completion is expected early September.

In relation to Elvie, they are planning to run 3D seismic over the structure using the Geo Caspian boat (pictured in the July Review) in August as soon as it completes the seismic currently being run over the western part of the WA-482-P permit in the Carnarvon Basin. Elvie is estimated to be between 4 to 7 tcf and a large part of it is outside WA-314-P permit but as this permit is on the edge of international waters the government is not prepared to issue a permit beyond this boundaary. From a practical perspective, that means that if Elvie comes up trumps KAR can suck it dry from inside the permit area.

Other points of interest for me were that the presalt targets in Brazil may be 2 to 3 years away from being drilled as they will need to run new 3D seismic and then farm out the expensive cost of drilling 7km will require farmout.

I got the impression that although the Bilby find has turned out to be larger than expected, the permeabilty and lighter grade of the oil at Kangaroo might encourage them to develop Kangaroo earlier. Also, they are quite excited about the prospects of West kangaroo which is on the other side of the salt diapir and likely to be twice the size of Kangaroo. The different grades of oil of Kangaroo and Bilby is likely to mean seperate development of each but they expect some synergies due to their close proximity (around 17km.

In terms of upcoming appraisal wells in Brazil, 1 or 2 wells planned for Kangaroo first and in early 2014, then West Kangaroo immediately afterwards followed by Bilby.FWIW, it was clearly stated that they expect to continue to fund drilling by farm downs so IMO any CR does not seem likely. The drilling costs in Brazil have been $250mm to date with KAR's share being $25mm and they still have $200mm cash. The next round of Brazil drilling will be funded by a farm down of a further 15% for an expected $250mm of funding. They also seemed quite excited about the prospects of the Carnarvon permit and it seems that the parties that missed out on securing the permit are interested to farm in.

I think that's enough from me for now.

ANZ