Ann: Brazil Field Trip Presentation, page-4

Slide 32 was great to see. We have speculated for a while on here about Karoon getting access to the surrounding fields of Neon via the marginal fields bill that was brought in earlier this year and this is the first sign of that being resurrected. Slide 32 has a very similar composition to that which was shown on the below (from a 2015 Operations Review by KAR.

I'm hopeful that they will declare Neon commercial within the next 6 months or so, and then see bolt on acquisitions via the marginal fields access of the other fields. It could great a fairly large complex of discoveries that feed into the 1 stand alone FPSO. I suspect this might also drive the decision making around what to do with the Bauna FPSO.

I can't seem to find it right now (hopefully someone can point it out) but there was a release (not sure if it was by KAR directly or via a broker) that showed the expected production profile by year of Bauna / Patola, and by the time of the current end of term of the FPSO (2028), I'd probably expect production to be sub 20k bopd by then, so it was certainly interesting to see an option on Slide 28 of a possible Bauna tie back to a Neon FPSO. That would seem a very logical scenario if Bauna was essentially winding down via natural production decline whilst we bring Neon and the surrouning discoveries around Neon online. It would provide a significant pipeline around this area in the Santos basin for KAR for the next 10 years, as natural production declines occur, new production comes online to replace it, whether thats from Piracuca (the most explored field below) or regaining access to the Bilby / Taipan block that we had to give up as part of our licence requirements several years ago.

The 1 thing people say about KAR, is that the valuation is held down due to the reliance on 1 asset with a relatively short field life. Neon and the surrounding complex changes that whole rhetoric, as it could lead to an ongoing 25-50k daily production profile for the next 15-20 years with the potential of what they could bring online.

Its exciting to see what KAR does with this area, on top of further acquisitions outside of this area of the Santos basin, whether within Brazil or outside into the GOM.