Karoon Drills Ahead at Santos Basin Prospect (Brazil)

Karoon Gas Australia Ltd advises that as at 6:00 hours BRST on 15th of January, 2013, the Kangaroo-1 well had been drilled to a depth of 1840 mRT and 13 3/8 inch casing has been cemented and the company is now preparing to drill ahead in 12 ¼ inch hole.

Since the last report, the 20 inch casing was installed and the 17 ½ inch was drilled to 1840 mRT where the 13 3/8 inch casing was run. The well is being drilled with the Blackford Dolphin semi-submersible drilling rig.

The Kangaroo-1 well is located within Blocks S-M-1101 and S-M-1165 and has multiple targets at several geological levels. The well drilling is expected to continue into February 2013 with results being released as they become available.

The Kangaroo-1 well is located within Blocks S-M-1101 and S-M-1165 and has multiple targets at several geological levels, including the Campanian, Maestrichtian, Eocene and Miocene aged rocks. The well drilling is expected to continue for the majority of the first quarter 2013 with results being released as they become available.

Upcoming Well Program

The Emu-1 and Bilby-1 wells are expected to be the second well and third wells in the Santos Basin exploration drilling campaign. These wells are located in Blocks S-M-1102, S-M-1137 and S-M-1166, and between them have multiple targets at several geological levels, including the Santonian, Campanian, Maestrichtian, Eocene and Miocene. Completion of these three wells will satisfy the minimum work commitments for Block S-M-1101, SM- 1102, S-M-1037, S-M-1165 and S-M-1166.

Press Release, January 17, 2013

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