Corvina  Field Marlin  Prospect Marina  Prospect 1992 2D  Seismic 2010 3D  Seismic During July 2010, Karoon conducted a seabed coring program. As a result, oil fluorescence was observed in a number of the  cores, four of which were further analysed. Oil samples from surrounding fields were collected and have now been analysed with  results integrated into Karoon’s drop core program analysis and previously published well information. This work confirms that the  oil and gas in Block Z-38 is very likely sourced from the same Tertiary source rocks that accumulated in the Tumbes and Talara  Basin fields nearby. Karoon believes that this work demonstrates an extension of the known petroleum system and derisks  ‘source rock’ in the Z-38 Block. Combining drop core results with the 3D seismic and offset well information from surrounding fields has resulted in the  development of a geological model that is very supportive of the presence of a diverse range of potentially large commercial oil  and gas fields where all the required petroleum system elements are in place.  During the financial year the Environmental Impact Assessment (‘EIA’) report was prepared. Regulatory approval applications and  planning for the upcoming drilling campaigns is currently continuing. Drilling in the block is expected to commence late in calendar  year 2012, with two firm wells and additional optional wells likely. Karoon will be utilising its existing South American drilling team,  who have commenced preparations for the drilling and have sought expressions of interest for rigs and services. Karoon is in  discussions with other offshore Peruvian Operators to form a ‘rig club’ with the aim of providing a more cost effective and  attractive contract for the drilling rig operator.  Preparations are being made to commence a farm-out of Block Z-38. A data room is being set up for potential companies to  review information, commencing during September 2011. Karoon is currently the Operator and after completion of the farm-in obligation of the drilling of two wells, Karoon’s equity interest in  Block Z-38 will be 75%. The remaining 25% equity interest will be held by Vietnam American Exploration Company LLC.  Drill Planning Equity Interest Karoon Gas Australia Ltd  Annual Report 2011 13