what a legend!

Thursday, 8 September 2011

(ASX Code: KAR)

ASX ANNOUNCEMENT


?TRANSOCEAN LEGEND? SEMI SUBMERSIBLE DRILLING CONTRACT SIGNED FOR 5-8 WELL 2011-2013 PHASE-2
BROWSE DRILLING PROGRAM.

A drilling contract has been signed with Sedco Forex International Inc. on the 8th September securing the ?Transocean
Legend? semi-submersible drilling rig to complete the planned Phase-2 Browse Basin exploration drilling program in the
WA-314-P, WA-315-P and WA-398-P permits jointly held by ConocoPhillips and Karoon Gas. The contract comprises five
firm wells (fulfilling permit commitments) with options for three additional wells (5-8 wells). Drilling is expected to
commence in the fourth quarter of 2011 and is estimated to run for eighteen months to two years
ConnocoPhillips is the operator of the jointly held WA-314-P, WA-315-P and WA-398-P Browse Basin permits containing
the previously announced Poseidon and Kronos gas discoveries.
The five to eight well drilling program will target the Poseidon trend as well as surrounding prospects, including one
prospect in WA-314-P late in the program.
The first well will be be Boreas-1, a crestal well in WA-315-P on a large tilted fault block east of the Poseidon-1 fault block.
The results of the drilling campaign will allow the size and quality of the hydrocarbon accumulations within the
exploration permits to be determined in preparation for a development decision. Karoon believes that the additional new
prospects identified are of sufficient size that, if successful, would result in a meaningful increase in the capacity and
economics of an eventual LNG project.
Pursuant to the 2006 Farmin Agreement between Karoon and ConocoPhillips (Browse Basin) Pty Ltd, ConocoPhillips will
be funding 80% of the drilling and testing costs for the initial $125 million of expenditure within WA-315-P.
Based on current forcasted costs Karoon will have sufficient capital at its disposal to complete all drilling activities for the
planned program. Karoon is currently well advanced in the process of completing the farmout of its Santos Basin and
Peruvian assets, and expects to have reduced financial exposure to both drilling campaigns. A list of potential famin
partners will be shortlisted in the near future and negotiations are continuing.