## Australia 

• The Karoon and ConocoPhillips joint venture received Government environmental approval to conduct drilling in the Browse Basin, which is now expected to start during the fourth quarter calendar year 2011. 

• Subsequent to the end of the financial year, the ‘Transocean Legend’ drilling rig was contracted by the joint venture to drill five wells in the Browse Basin permits, with options for three additional wells. 

• Processing and interpretation results from the 2,828 square kilometres of 3D seismic data acquired over the greater Poseidon trend resulted in better definition of Poseidon and several surrounding prospects. 

• Karoon increased its equity interest in the WA-314-P permit from 40% to 90%. 

## Brazil 

• Several new leads and prospects in the pre, sub and post salt formations have been defined within Karoon’s wholly owned Santos Basin Blocks, in preparation for drilling in the first half of calendar year 2012. 

• The ‘Blackford Dolphin’ semi-submersible drilling rig was contracted to drill three wells in Karoon’s wholly owned Santos Basin Blocks. 

• Karoon executed farm-in and Joint Operating Agreements with Petróleo Brasileiro SA (‘Petrobras’) to acquire a 20% interest in two Blocks, S-M-1352 and S-M-1354 in the Santos Basin, Brazil, which are subject to regulatory approvals in Brazil. 

• Discovery of hydrocarbons and a subsequent drill stem test in the Maruja exploration well in Block S-M-1352. The production test achieved an equipment constrained stabilised production flow rate of 4,675 barrels of 38 gravity API oil and 0.8 million cubic feet of gas per day through a 1/2 inch choke. 

## Peru 

• Processing and interpretation of 1,500 square kilometres of new 3D seismic data was completed. 

• Several new leads and prospects have been defined in Block Z-38 for preparation of a planned drilling program during calendar year 2012. 

• Receipt of regulatory approval to increase Karoon’s equity interest in Block Z-38 to 75%, subject to the completion of farm-in obligations. 

• Entry into the second phase of exploration in Block 144, including the acquisition of 300 kilometres of 2D seismic data. 

## Capital Raising Activities 

• A total of $292.5 million in new funding was raised through a $186.4 million share placement to sophisticated and professional investors during September 2010, $81.8 million through a share purchase plan completed during October 2010 and $24.2 million from the exercise of unlisted options throughout the year. 

