Ann: Santos Basin JV Partner Update-KAR.AX, page-57

Pacific Exploration and Production Company

The financial mess that Karoon's equity partner "Pacific Exploration and production company " (Pacific)
finds itself in must be of concern to Karoon and the market generally.
The two latest reports from Pacific to the Toronto Exchange being the Full year accounts ending 31 December 2015 and the 1st Quarter 2016 do not report a positive picture.
Page 36 of the full year accounts shows the amount of "impaired assets" as at 31 December 2015 as US $ 4.64 Billions. Of this figure US$ 412Million relate to "exploration and evaluation assets in Brazil".
No mention of the location or type of exploration assets in Brazil that are now impaired

Petrobas

The financial plight of Petrobas is also amazing and Petrobas' decision to sell some US$2 Billions of Offshore Brazil exploration assets might be of interest to Karoon.
Petrobas' latest accounts show some staggering figures:
For instance : "Roll forward FX losses US$30.7 Billion"
Contingent Liabilities -with the following rider " possibility of loss is not considered remote" US 47.4 Billions of which their tax liability is about US$32.8Billion.

Comment

The data suggests that for both Pacific and Petrobas , Brazilian oil exploration assets are seen as either impaired and or for immediate sale.