KAROON ENERGY LTD — Interim / Quarterly Report 2013

Apr 30, 2013

==> picture [704 x 399] intentionally omitted <==

May Review 2013

Karoon Gas ‐ Snapshot

==> picture [70 x 70] intentionally omitted <==

1

Brazil farmed‐out 35% equity to Pacific Rubiales Energy Corp (PRE) (subject to regulatory approval)

Santos Basin Exploration Drilling Campaign progressing

• Oil discovery at Kangaroo‐1

• Emu‐1 oil shows  Bilby‐1 drilling ahead

Australian Browse Basin Drilling progressing – 6‐7 wells Poseidon field:

• Zephyros‐1 gas discovery (Kronos‐1 look‐ alike)

• Boreas‐1 gas discovery flows at 30.2 mmscf per day (facility constrained)

• Kronos‐1 gas discovery flows at 26 mmscf per day (facility constrained)

WA‐482‐P and WA‐314‐P 3D seismic planned for mid year

==> picture [721 x 153] intentionally omitted <==

Karoon Review

May 2013

Investor Information

==> picture [355 x 239] intentionally omitted <==

----- Start of picture text -----

2
----- End of picture text -----

Substantial Shareholders

	Substantial Shareholders
Rank 1	Name Wellington Management Company LLP	%ISC 11.90
2	Talbot Group	11.89
3	Robert Hosking	5.66
4	FMR LLC	5.34
5	Paradice Investment Management Pty Ltd	5.23

Karoon Review

==> picture [70 x 70] intentionally omitted <==

==> picture [356 x 221] intentionally omitted <==

==> picture [356 x 177] intentionally omitted <==

----- Start of picture text -----

 221 million shares
 11 million unlisted options
 Market capitalisation approx A$928 million @ A$4.20
 Cash at bank A$210 million as at 30 [th] April 2013
 Company in S&P/ASX 200 Index
----- End of picture text -----

May 2013

Past. Present. Future.

==> picture [70 x 70] intentionally omitted <==

3

What we have done

Australia

• 2005 ‐ Acquired WA‐314‐P and WA‐315‐P (100%)

• 2006 ‐ Farm‐out to ConocoPhillips

• 2007 ‐ Acquired WA‐398‐P (40%)

• 2009 ‐ Discovery of Poseidon

• 2010 ‐ Discovery and production test at Kronos‐1

• 2012 ‐ Discovery and production test at Boreas‐1

• 2012 ‐ Farm‐in to North Carnarvon Basin WA‐482‐P (100%)

• 2013 ‐ Discovery at Zephyros‐1

Brazil

What we are doing

Australia

• Appraisal and exploration drilling 6 ‐ 7 wells 2012‐2014

• Browse Basin ‐ farming‐out an interest in WA‐314‐P

Brazil

• Santos Basin, drilling of 3 wells. Commenced December 2012

• Currently drilling Bilby‐1

• Sourcing rig for Kangaroo discovery well

Peru

• Tumbes Basin‐farming‐out an interest in Z‐38

• 2007 ‐ Awarded 5 Blocks in the Santos Basin Brazil

• 2010 ‐ Acquired wide azimuth 3D seismic survey (first in Brazil)

• 2012 ‐ Farm‐out 3 wells ‐35% to Pacific Rubiales Energy Corp*

• 2013 ‐ Discovered 42 API oil column at Kangaroo‐1

• 2013 ‐ Emu‐1 well drilled(oil &gas shows)

Peru

• Preparations continuing for a minimum two well drilling program expected to commence by early 2014 in Peru Tumbes Basin Z‐38

Where we are going

• Early entry into highly prospective basins, with high equity, larger potential targets and a proven petroleum systems

• 2008 ‐ Farm‐in to Z‐38

• 2009 ‐ Acquired 2D seismic

• 2010 ‐ Acquired 3D seismic

• Realise best economic outcome for shareholders by leveraging off large equity positions in early stage projects

*Subject to regulatory approval

Karoon Review

May 2013

Key personnel

==> picture [70 x 70] intentionally omitted <==

BOARD AND SENIOR MANAGEMENT 4

ROBERT HOSKING – EXECUTIVE CHAIRMAN Founding Director and shareholder of Karoon Gas with 35 years of commercial experience. Involved in the oil and gas industry for 18 years. Founding Director and shareholder of Nexus Energy

CLARK DAVEY – INDEPENDENT NON‐EXECUTIVE DIRECTOR

30 years oil and gas accounting experience with PWC and private consulting. Energy and Resources tax specialist including experience with structuring and PRRT

MARK SMITH – EXECUTIVE DIRECTOR AND EXPLORATION MANAGER

30 years experience as a Geologist and Exploration Manager in petroleum exploration and development, mainly with BHPB in Australia, Southeast Asia and North America

SCOTT HOSKING – COMPANY SECRETARY AND CFO

International financial and commercial management background with corporate finance expertise

JOSE COUTINHO BARBOSA – NON‐EXECUTIVE DIRECTOR

38 years experience in Petrobras Group, including director of Exploration and Production, CEO of Braspetro, the international subsidiary of Petrobras, and acting CEO of Petrobras SA in several instances and Managing Director.

EDWARD MUNKS – SOUTH AMERICA DIRECTOR AND COO OF KGA

32 years international experience. Was fundamental in the acquisition of the Karoon Group’s exploration portfolio in South America. Also responsible for the company’s South American operations

STEPHEN POWER – NON‐EXECUTIVE DIRECTOR

25 years as a commercial lawyer providing advice to participants in the resources industry in Australia and overseas

TIMOTHY HOSKING – GENERAL MANAGER – SOUTH AMERICA

10 years experience. Instrumental in the acquisition and consolidation of the South American assets including responsibility for the government and private oil and gas company relationships, which have resulted in Karoon’s current South American portfolio. Coordinated all field operations in Peru and Brazil

GEOFF ATKINS – INDEPENDENT NON‐EXECUTIVE DIRECTOR

40 years experience in investigation planning design, documentation and project management of significant port harbour and maritime projects.

KEY PEOPLE

DENNIS HINING – DRILLING MANAGER – SOUTH AMERICA

40 years experience in the oil and gas industry. Former head of ExxonMobil Worldwide Ventures Group for Deepwater Exploration Drilling, Drilling Engineer for Shell Oil. Experienced in Brazilian deep pre‐salt development projects

JORGE CAMERGO – ADVISOR TO THE BOARD 34 years of experience in the oil and gas industry. Former President of Statoil and ASA in Brazil. Worked for Petrobras for 27 years

BRIAN LUECKE – EXPLORATION MANAGER – SOUTH AMERICA

GERMAN BARRIOS – ADVISOR TO THE BOARD

40 years International and US experience in the oil and gas industry with Phillips 25 years experience. Partner of Barrios Fuentes Abogados – a law firm in Peru Karoon Review May 2013 Petroleum, IEDC, ARCO and Anzoil specialising in oil and gas law

Brazil assets – Regional Activity

==> picture [70 x 70] intentionally omitted <==

5

Location:

Santos Basin, Brazil. 300‐450m water depth. On trend with Piracuca, Newton, Muluza, Maruja, Tiro and Sidon fields.

Prospective resource:

12 prospects and leads firmed up including 2 in pre‐salt section.

Current Karoon Net Unrisked Mean Prospective Resource in the Post salt, total 454 million barrels.

Pre‐salt values subject to additional work.

Karoon discovered resource:

Kangaroo oil field (to be appraised) Gross contingent 3C 337 million bbls.

Maruja oil field.

Interest:

100% interest in 5 blocks (reducing to 65% subject to regulatory approval and options in the farm‐out to Pacific Rubiales Energy Corp.

20% interest in Block S‐M‐1352 (Subject to final regulatory approval)

Forward plans: Complete last of 3 well, program. Bilby‐1

Karoon Review

==> picture [498 x 393] intentionally omitted <==

----- Start of picture text -----

Karoon/PRE Kangaroo oil
discovery Jan 2013
----- End of picture text -----

==> picture [242 x 30] intentionally omitted <==

----- Start of picture text -----

May 2013
----- End of picture text -----

Brazil assets – Activity Summary

==> picture [70 x 70] intentionally omitted <==

==> picture [721 x 417] intentionally omitted <==

----- Start of picture text -----

6
Santos Basin Farm‐out:
Agreement for Pacific Rubiales
Energy Corp to acquire a 35%
interest in Karoon’s wholly owned
Santos Basin Exploration Blocks, S‐
M‐1101, S‐M‐1102, S‐M‐1037 , S‐M‐
1165.
Pacific Rubiales Energy Corp:
 Pay US$40 million in cash
consideration.
 US$210 million in carried well
costs.
 35% of all costs over and above
the well carry commitment.
Drilling order:
1. Kangaroo‐1 (oil discovery)
2. Emu‐1(oil & gas shows)
3. Bilby (now drilling)
----- End of picture text -----

==> picture [476 x 30] intentionally omitted <==

----- Start of picture text -----

Karoon Review
----- End of picture text -----

May 2013

Brazil Santos Basin – Drilling results

==> picture [70 x 70] intentionally omitted <==

7

==> picture [704 x 355] intentionally omitted <==

----- Start of picture text -----

Kangaroo‐1 Oil Discovery
Kangaroo‐1 Indicative
Pressure data confirms a 25 metre oil Kangaroo‐2
column in Eocene interbedded sands. location
Oil measured at 42 degrees API.
Petrophysical analysis estimates
reservoir porosities in the range 25 to
32% with permeabilities tested in two
sands at 100 to 300md.
Post drill Seismic interpretation
indicates additional updip
hydrocarbon potential with a gross
column in the structure of
approximately 600 metres.
Deeper Eocene to Maastrichtian
interbedded sands are expected to be
within the hydrocarbon column
higher in the structure.
200m
Negotiations are underway to secure
a rig to drill an updip appraisal well as
soon as possible. Seismic strike section AA over the crest of the Kangaroo field. Purple horizon is Near Top
Eocene reservoir. Green line shows Oil Water Contact extrapolated over the field.
----- End of picture text -----

Karoon Review

May 2013

Brazil assets ‐ Contingent & Prospective Resources

==> picture [70 x 70] intentionally omitted <==

8 Kangaroo contingent resources: Assessed in accordance according to PRMS standards. 1C value is low as the well intersected the column near the OWC and no updip oil can be included in this category. Additional Eocene level Prospective Resources: The following table provides an arithmetic summation of the Eocene level total prospective resources range for the prospects, Bliby Wallaby and Taipan.

Prospective resource:

Karoon predrill Net Unrisked Mean Prospective Resource in the Post salt, total 942 million barrels. Pre‐salt values subject to additional work.

==> picture [523 x 314] intentionally omitted <==

==> picture [284 x 75] intentionally omitted <==

==> picture [234 x 75] intentionally omitted <==

Karoon Review

May 2013

Brazil Santos Basin – Bilby‐1Drilling

==> picture [70 x 70] intentionally omitted <==

9 Bilby Prospect: Target intervals indicated in yellow (sandstones). Targets are the Eocene Campanian and Santonian sand intervals which show a good seismic DHI (Direct Hydrocarbon Indicator). Gross Prospective resource total for all levels – mean 110 mmbls to high case 170 mmbls. Primary target mean 50 mmbls to high case 110 mmbls.

==> picture [543 x 197] intentionally omitted <==

==> picture [543 x 196] intentionally omitted <==

==> picture [476 x 30] intentionally omitted <==

----- Start of picture text -----

Karoon Review
----- End of picture text -----

==> picture [242 x 30] intentionally omitted <==

----- Start of picture text -----

May 2013
----- End of picture text -----

Brazil Santos Basin – Presalt potential

==> picture [70 x 70] intentionally omitted <==

10

Stingray & Great White Prospects:

Additional large pre‐salt prospects can now be explored with acreage retention assured with the Kangaroo success and oil shows in the Emu well.

3D seismic (MAZ) prestack depth migration, allows the identification of large closed pre‐ salt tilted fault blocks.

Presalt seismic expression matches reservoir sequence characteristics in proven fields to the east.

Multi‐billion barrel potential with 400m of relief in the Stingray and Great White prospects.

Karoon is planning new targeted 3D to improve resolution.

==> picture [538 x 393] intentionally omitted <==

Karoon Review

May 2013

Santos Basin

Indicative development model and economics

==> picture [70 x 70] intentionally omitted <==

11

==> picture [665 x 387] intentionally omitted <==

Karoon Review

May 2013

Santos Basin

Indicative development model and economics

==> picture [70 x 70] intentionally omitted <==

12

==> picture [654 x 258] intentionally omitted <==

==> picture [654 x 130] intentionally omitted <==

Karoon Review

May 2013

Australian Assets

==> picture [70 x 70] intentionally omitted <==

==> picture [43 x 20] intentionally omitted <==

----- Start of picture text -----

13
----- End of picture text -----

==> picture [665 x 263] intentionally omitted <==

==> picture [665 x 131] intentionally omitted <==

==> picture [721 x 30] intentionally omitted <==

----- Start of picture text -----

Karoon Review May 2013
----- End of picture text -----

Australian assets – Browse Basin

==> picture [70 x 70] intentionally omitted <==

14

Location:

Browse Basin, Australia. 450‐600m water depth. On trend with Torosa, Brecknock and Calliance gas condensate fields. Other fields: Icthys, Argus, Prelude and Burnside.

Karoon discovered resource:

Updated third party reviewed Contingent Resource assessments are expected to be available towards the end of the drilling programme.

Prospective resource:

Outside greater Poseidon trend 8 prospects identified with Total Mean Unrisked Prospective Resource of 15 tcf.

Interest:

40% in WA‐315‐P and WA‐398‐P 90% in WA‐314‐P

Forward Plans:

Drilling order: 1. Proteus 2. Grace

*Additional wells to be determined

Program to continue into 2014. Farm‐out an interest in WA‐314‐P.

Objective:

Define resource and progress to LNG development FEED stage.

Karoon Review

==> picture [487 x 200] intentionally omitted <==

==> picture [487 x 200] intentionally omitted <==

==> picture [242 x 29] intentionally omitted <==

----- Start of picture text -----

May 2013
----- End of picture text -----

Australian assets – Browse Basin

==> picture [70 x 70] intentionally omitted <==

15

==> picture [349 x 274] intentionally omitted <==

==> picture [367 x 274] intentionally omitted <==

Zephyros‐1 results:

Zephyros‐1, located to the south west of other Greater Poseidon wells successfully tested a large tilted fault bock. The well penetrated a gas bearing reservoir sequence very similar to that evaluated in Kronos‐1. Extensive coring and wireline evaluation was carried out to gather all necessary data from the well. MDT pressure measurements indicate a deep gas water contact hundreds of metres below the TD of the well, very similar to that seen in Kronos‐1.

Note: This data represents the views of Karoon Gas and do not necessarily represent the view of ConocoPhillips.

Karoon Review

May 2013

Australian assets – North Carnarvon Basin

==> picture [70 x 70] intentionally omitted <==

16

WA‐482‐P

Location:

North Carnarvon Basin, Australia. 400‐2000m water depth. On trend with North Carnarvon Basin Mungaroo plays and Phoenix gas discovery. Prospective resource: 10 prospects and leads with billion barrel of oil equivalent potential.

Interest: Earning 100% Terms:

Farm‐in from Liberty Petroleum Corp. Earn 100% by completing years 1 and 2 work program of geological and geophysical studies and acquisition of 2010 sq km 3D seismic.

Forward Plan: Acquire seismic Farm Out

==> picture [543 x 393] intentionally omitted <==

Karoon Review

May 2013

Australian assets – North Carnarvon Basin

==> picture [70 x 70] intentionally omitted <==

17 WA‐482‐P Prospect example: Prospective at a number of levels from Lower Jurassic Nth Rankin beds to Triassic, Top and Intra‐Mungaroo Formation levels. 10 kms DELAMBRE 1 RMS AMPLITUDE MAP NORTH RANKIN BEDS Karoon Review May 2013

Peru assets – Block Z‐38 – Tumbes Basin

==> picture [70 x 70] intentionally omitted <==

==> picture [721 x 422] intentionally omitted <==

----- Start of picture text -----

18
Location:
Tumbes basin water depths 300‐
1000m. Close to fields that have
produced over 1.6 billion barrels
of oil.
Prospective resource range:
16 prospects and leads identified
with current Net Unrisked Mean
Prospective Resources totalling
1.92 billion barrels.
Interest:
75% equity in Z‐38 subject to
completion of farm‐in terms with
Pitkin Petroleum Plc (formally
Vamex).
Forward Plans:
Farm‐out to begin 2 [nd] quarter
2013.
Drill a minimum of 2 wells
expected to start early 2014. Rig
currently being sourced.
Perspective resource estimates represent current interpretations by Karoon of available exploration data and are subject to material change and reinterpretation as exploration and appraisal proceeds
----- End of picture text -----

==> picture [476 x 29] intentionally omitted <==

----- Start of picture text -----

Karoon Review
----- End of picture text -----

==> picture [242 x 30] intentionally omitted <==

----- Start of picture text -----

May 2013
----- End of picture text -----

Peru assets – Tumbes Basin Drilling candidates

==> picture [70 x 70] intentionally omitted <==

==> picture [721 x 421] intentionally omitted <==

----- Start of picture text -----

19
Merluza Marina
H40 Merluza, Marina and Marlin Prospects
Target
Baleen
Target Target sand intervals indicated in yellow
H50
Target
H60
Targets MARINA
H55
Targets
H70 MERLUZ
Targets A
Marlin MARLI
H80 N H80
Target Marlin
Target
BALEEN
downdip
Merluza‐1 will test three overlying Marina‐1 will test five overlying Marlin Prospect Zoritos level Bonito Prospect
prospects, Balenn, Merluza H60 Mean prospect levels, H40, H50, H55,
Prospective Resource 51 mmbls H70. Mean Prospective Resource 124 Mean Prospective Resource
mmbls 360 mmbls
Baleen (all) – Mean Prospective Resource Mean Prospective Resource 392
189 mmbls mmbls
----- End of picture text -----

Karoon Review

May 2013

Peru Maranon Basin – Block 144

==> picture [70 x 70] intentionally omitted <==

==> picture [721 x 416] intentionally omitted <==

----- Start of picture text -----

||||||
|---|---|---|---|---|
|20|
|Location:|
|Maranon|Basin,|Peru.|On|
|trend|with|Situche|Central|oil|
|field.|Close|to|under‐capacity|
|oil|export|pipeline|and|major|
|navigable rivers.|
|Prospective resource range:|
|3 prospects being evaluated.|
|Interest:|
|100% equity.|
|Forward Plans:|
|Acquire|2D|seismic|in|the|
|south|and|east|to|better|
|define structure.|
|Objective:|
|Define prospective resource|
|size prior to drilling.|
|Block currently in force|
|majeure, pending|
|enviromental approval.|
|Perspective resource estimates represent current interpretations by Karoon of available exploration data and are subject to material change and re‐interpretation as exploration and appraisal proceeds|

----- End of picture text -----

==> picture [721 x 30] intentionally omitted <==

----- Start of picture text -----

Karoon Review May 2013
----- End of picture text -----

Activity summary

==> picture [70 x 70] intentionally omitted <==

21
	KAROON ACTIVITY
	KAROON ACTIVITY
		2013				2014
	Indicative time line(@April 2013)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	BROWSE BASIN(Aust)
	Drilling (firm)
	Zephyros‐1
	Proteus‐1
	Grace‐1
	Drillingoptions
	3D Seismic interpretation
	NORTH CARNARVON BASIN(Aust)
	3D Seismic acquisition
	Processing3D Seismic data
	3D Seismic interpretation
	Well option
	SANTOS BASIN(Brazil)
	Kangaroo‐1
	Emu‐1
	Bilby‐1
	DrillingPhase‐2 ‐planning& approvals
	Kangaroo‐2 ‐proposed
	TUMBES BASIN(Peru)
	3D Interpretation
	Drilling‐planning& approvals
	Drilling
	MARANON BASIN(Peru)
	Drilling‐planning& approvals
	New 2D Seismic acquisition &processing
	Interpretation

Karoon Review

May 2013

DeGolyer & MacNaughton Assessment

==> picture [70 x 70] intentionally omitted <==

22
	Summary of DeGolyer and MacNaughton assessments of Karoon's Prospective and Contingent Resource Base as of 30th September 2009 and September 2012			Low Estimate	Best Estimate	High Estimate	Mean Estimate	Risked Mean Estimate	Number of Prospects and Leads
	GAS	Net Contingent Gas Resource
		Assessment date
		September 2009	Poseidon Wet Gas (Tcf)			7.60			1
		Net Prospective Oil Resources
		September 2009	Total Net Australia Browse Basin Wet Gas (Tcf)	1.80	4.50	11.20	5.80	1.60	7
	OIL	Net Prospective Oil Resource
		September 2012	Brazil, South America Oil (billion barrels)	0.46	0.86	1.54	0.94	0.25	12
		September 2012	Peru, South America Oil (billion barrels)	0.59	1.59	3.71	1.92	0.32	19
			Total Net Prospective Oil Resource (billion barrels)	1.04	2.45	5.25	2.86	0.56

Note: Excludes North Carnarvon Basin Permit WA‐482‐P, Maruja and Pre‐Salt Prospects in Brazil, and takes into account current interest in Z‐38 and the Pacific Rubiales Energy Corp farm‐out deal.

Karoon Review

May 2013

Disclaimer

==> picture [70 x 70] intentionally omitted <==

23

• This presentation has been prepared by Karoon Gas Australia Ltd for professional and sophisticated investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. The presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person.

• No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Karoon Gas Australia Ltd, its directors, employees or agents, nor any other person accepts liability, including without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies.

• Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance.

• The distribution of this document in jurisdictions outside Australia may be restricted by law. Any recipient of this document outside Australia must seek advice on and observe any such restrictions.

• Petroleum exploration relies on the interpretation of complex and uncertain data and information which cannot be relied upon to lead to a successful outcome in any particular case. Petroleum exploration is inherently uncertain and involves significant risk of failure. All information regarding Prospective resource estimates and other information in relation to Karoon’s assets is given in the light of this caution.

Karoon Review

May 2013