Thursday, 27th May 2010 (ASX Code: KAR) ASX ANNOUNCEMENT...

Thursday, 27th May 2010

(ASX Code: KAR)

ASX ANNOUNCEMENT

Kronos-1 PROGRESS REPORT NO 13

Confirmed equipment constrained maximum sustained production test flow rate of 26 million standard
cubic feet a day from the Kronos-1 Well

At 0600 hrs today, Karoon advises that production test of the Kronos-1 exploration well was complete and the
testing string was being removed from the well. Since the last report, testing operations included a multi-rate
flow test followed by a pressure build-up and bottom hole reservoir fluid sampling.

The maximum sustained flow rate attained during the multi-rate test was 26MMscf/d through a 32/64 choke,
with a flowing wellhead pressure of 3900 psia. As with the previously released clean up flow rates, the flow
rates achieved were equipment constrained. A Condensate-Gas Ratio of 9.5bbl/MMscf was measured at the
surface, along with a 10% CO2 content taken from the gas flow on a volume basis.

Based on an analysis of the well test data, Karoon believes that future production wells drilled adjacent to the
Kronos-1 location have the potential to flow at commercial rates in excess of 100 MMscf/d.

Future Plan

Well data from the three wells drilled on the greater Poseidon structure will be analysed over the coming
months, together with the new Poseidon 3D seismic data which is currently being processed. Further
appraisal and exploration well locations will be identified for the re-commencement drilling in early 2011.

Karoon's assessment of the Contingent Resource and Prospective Resource potential will be independently
assessed when a full analysis is completed in the coming months.

As planned, the current Karoon/ConocoPhillips drilling campaign will finish with this well and exploration and
appraisal drilling will recommence in the acreage in the first quarter 2011.