At the AGM today the boys seemed very confident, but kept a lid...

At the AGM today the boys seemed very confident, but kept a lid on it. So many good things to report, but will give a summary of those not specifically noted in the presentation material that should be read very carefully by all shareholders:

1. The intro of new directors - just so impressive who they now have on the Board - eg Jose Barbosa, previously CEO of Petrobas - and David Whittam as Exploration Manager Australia, previously in senior positions with BHPP and Woodside

2.Don(?) Talbot gave a rousing endorsement of KAR's management and said that since Ken Talbot began buying KAR shares about 4 years ago, NOT ONE of their 26.7 million shares has been sold - they are in it for the long term. (Because it's such a good investment.)

3.The drilling program of 5-8 wells in the Browse and at least three each in Brazil and Peru commencing in the next 12 months indicates that KAR will be drilling more wells than any other company in the world over this period (in conjunction with its JV partners.) The total cost of this exploration will come close to $1 billion.

4.The reason for the IPO in Brazil failing was that KAR believed they could get US$3 per bbl for prospective resources but because two major offerings for Brazil exploration equity had just been concluded, they were offered only $2 per bbl and so KAR walked. What a great move - the prospective resources are now at least double what was believed only 12 months ago.

5.Serious players are now evaluating the Brazil and Peru data rooms. KAR hope to have a final agreement for consideration in December to farm out 30% of their Brazil tenements on something like a 2:1 cost sharing (Petrobas, for example, would earn 30% if they pay 60% of the cost of the wells, leaving KAR to finance 40%.)

6. Mark said that their seismic now indicates that the prospective resources are double what they had believed earlier, in Brazil and Peru. Many new prospects were indicated also in NW Aust, with WA 314 P indicating a multi-TCF target (ie may be worth another couple of billion dollars)

7. Mark emphasised that they won't be trying to hit good gas flows with every well in the Browse, although the next well should be good. Appraisal wells indicate the size of the field and give a lot of data that helps determine the size of the resource - "if we don't hit gas, it's not a negative - it doesn't matter".

8.The pre-salt prospects are getting more interesting and it's possible that the oil found in deeper water also extends into the presalt tenements in KAR's leases.

9.The oil discovered onshore Peru is the same as that tested in KAR's extensive offshore leases, giving support to their belief that they have potentially very large resources in Peru.

10. KAR have released an Expressions of Interest for drilling Peru. They hope to conclude a drilling contract by year end, with drilling commencing in H2, 2012.

11.KAR's cash position looks sufficient for roughly 18 months (so unlikely to be a cap raising soon). Should get some cash flow from Maruja (20% equity) from perhaps as early as mid 2012.

12. Bob stressed the importance of having no safety or environmental issue with their drilling campaigns, citing that the GOM disaster nearly broke a company as big as BP. So Conoco Phillips will ensure that the Ocean Legend for Browse drilling will be fitted out to exacting standards.

13. After Bob's marketing tour recently, he came away with the impression that only Tullow Oil has value enhancing prospects as large as Karoon's!!!!

Incredible value at $4.