Dear Pegasus

Thank-you for the two letters received by mail. For what it's worth, you raised a few points of interest that any shareholder would certainly like to have resolved.

In the main however, I may not have done all the research required to have full view on what I was getting into but, I was certainly aware that Karoon was an Exploration Company. I knew that there was more than one Hosking on the books and the good performance in the past has certainly been due to some of their efforts. I am not looking for stability, "a Telstra" who churns through iPhone launches and brings in the slow profits. Karoon is my exciting play, a little "je ne sais quois" if you will. They have had a good hit rate with drilling campaigns and I'm aware of the potential bumps in the road. Don't get me wrong, the "plug and abandon" words in an announcement after weeks of nervous anticipation still hurt, but I was in control when I pressed the buy button.

It's been a difficult year with the SP movement but I was impressed by the Origin sale and there's a lot of cash to fund the campaigns in the medium term. Kangaroo will hopefully be defined more accurately and for the benefit of all, let's hope there's some upside to what's expected. What's not to like? I note you have drawn attention to the fact that the Chairman has reaped great rewards for himself. Is this much different to many of the others in a similar position? Perhaps he actually did something to get there. I have given him the benefit of the doubt.

Thank-you for your bold approach and radical new "vision" that we don't quite understand. As mentioned above, that's not why I got into Karoon in the first place. I shall be voting against your recommendations and nominations. I vote for excitement, for Kangaroo, and for Peru! I may just be young enough to see something decent come out of that one as it's been a little quiet there recently.

Your pleas have not fallen upon deaf ears however, there are still issues to be sorted out and it's through actions such as these that we can call upon the management team to re-focus on how they are carrying out "our" business. I believe some good will come of it anyway.

My votes may also be small in number but I will certainly make them count. It may be prudent to also point out that if you are so unhappy that the share price is trading at a 40% discount to net asset value, then even at today's price, you are more than welcome to take mine off of me at $5 a pop. You are after all confirming that this is the "fair price" of the company and that it is essentially due to "poor management" that the SP is so low.

If I had the cash, I would be topping up at these crazy levels. I will take comfort in the fact that I will be potentially looking at a good 50% return over the next 12 - 24 months.

Please don't call me, or write me again, unless your letter starts by offering to take my shares off my hands at the aforementioned price.

Yours sincerely,
Photis