Karoon Gas Australia Ltd  Annual Report 2011 3 The Peruvian 3D seismic is nearing final interpretation, with positive outcomes. This seismic data has delineated several new  prospects and leads at several geological levels. When the seismic is compiled with oil bearing drop core results and third party  well data from existing discoveries in the Tumbes and Talara Basins, a very compelling geological case can be built. Karoon is now  preparing to commence planning for drilling late calendar year 2012. While investing funds to conduct drilling and acquire 3D seismic data, Karoon’s share price suffered as a result of turbulent,  volatile and risk averse markets. However, I am encouraged to see the recent seismic results and the signing of rigs for Brazil and  Australia for drilling in the immediate term. On current geological information the prospective resource potential of the Company  has received a significant boost. The upcoming period is sure to create some interest in the Company given the expected amount  of news flow coming to market regularly over the next eighteen months. During this period, Karoon will have the completed  seismic processing, the expected farm-out of Peru and Brazil and the further drilling of five firm wells at Poseidon, three wells in  Brazil and two wells in Peru. We, as Directors and management of Karoon, are working diligently to capitalise on the Company’s prospective value by preparing  the company for the upcoming global drilling campaign. This should see Karoon emerge as a serious LNG player and global  production company. We are confident the work completed in 2010-2011 puts Karoon in a commanding position over its future  and provides the basis for growth in the upcoming financial years. The Board of Directors would like to thank Karoon shareholders for their continued support. 13 September 2011 Melbourne Mr Robert Hosking Executive Chairman