Karoon’s Santos Basin Blocks are located 112 kilometres off the coast from the Santa Catarina region of Brazil, south of Rio de  Janeiro. The Basin has recently yielded multiple oil discoveries. Discoveries announced in the period since Karoon acquired the  first of its Santos Basin Block interests include the Tupi, Carioca, Libra, and other large-scale pre-salt oilfields. During late 2009,  Petrobras announced the discovery of a 550 million barrel in place resource in the Piracucá field, just five kilometres to the north- east of Karoon’s blocks. During the last three years, other discoveries have also been made in similar geological features to the prospects mapped in  Karoon’s current acreage such as Tiro, Sidon, Guaiama, Panoramix and Vampira fields. Karoon is analysing all available exploratory  information from these discoveries. This new information, when utilised alongside recent seismic data, has contributed to the  delineation of prospects within the acreage. Karoon’s economic assessments of its blocks indicate that new fields could be  rapidly brought into production due to the relatively shallow water depths of 300-400 metres and proximity to existing oil and gas  infrastructure.  During 2010, Karoon completed a proprietary, wide azimuth (‘WAZ’) 3D seismic acquisition program, covering an area of 750  square kilometres. This was the first application of WAZ technology in Brazil. This specialised method of acquiring 3D seismic is  designed to better image above, around and under salt bodies in the basin. In addition, Karoon merged its existing conventional  3D data, purchased in 2009, with the WAZ into one combined dataset to provide a full multi-azimuth (‘MAZ’) 3D survey. This data  benefits from the application of other state-of-the-art technology, which is yielding excellent structural imaging below the salt. The  data is being processed to provide the best possible imaging of structure and amplitude plays that will provide Karoon with the  best chance of success in the upcoming drilling campaign.  During September 2011, Karoon received the final processed seismic dataset. Intermediary products were made available earlier  to commence interpretation ahead of the completion of final delivery, primarily to assist with well planning. This newly acquired  seismic data fulfilled the first period work program commitments for the blocks and is being used by Karoon for the upcoming  drilling campaign.  Figure 1 on the following page shows a comparison of seismic quality for the ‘old’ pre-existing 3D in the area with the new 3D  data after it has been exposed using the technology outlined above. This snapshot demonstrates the progress made through  processing and the greatly improved imaging of the salt illuminating both the sub-salt and pre-salt play potential.  Seismic Acquisition, Processing and Interpretation Karoon Gas Australia Ltd  Annual Report 2011 7 Santos Basin Blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 & S-M-1166 Two Petrobras oil discoveries  form the BM-S-40 field. Tertiary reservoirs estimated  to contain 120 million barrels.  Repsol and partners  report latest well  discovered light oil. The  well is located west of  Panoramix and may be  an extension to the field. Corcovado 2009 Presalt  oil discovery Petrobras  and BG currently being  appraised. Petrobras and ANP  drilled two pre-salt  oil discoveries in  the government  designated pre-salt  exclusion area. Franco  estimated to be  4 billion barrels. Petrobras oil and gas discovery targeting pre-salt.  Well temporarily suspended above pre-salt target.  Sao Paulo BS-4 Uruguá Pirapitanga Franco Libra Lara Azulao Guará Iguaçu Caramba BSS-70 Jupiter Atlanta Carapia Belmonte Mexilhão Area Mexilhão Natal Niteroi Cedro Corcovado Merluza Panoramix Varnoura Guaiama Piracuca Tubarão Sidon Tiro Estrla  do Mar Coral Caravela Caravela  Sul Cavalo  Marinho Parati (Santos) Tupi Carioca Bem-Te-Vi Tambaú BRAZIL Karoon /Petrobras Oil discovery at Maruja 2010 Active pipeline Planned pipeline Hydrocarbon phase Gas Gas/condensate Oil Oil and Gas Licence status Karoon acreage 50km 0 Karoon  Brazil Blocks