2010-2011 OPERATIOnS fOR THE fInAnCIAL YEAR EndEd 30 jUnE 2011 Australia Karoon acquired its interest in exploration permits WA-314-P and WA-315-P in the Browse Basin during 2005, adding WA-398-P  during 2007. The permits are located in the Browse Basin, 350 kilometres offshore from the northwestern Australian coast and  have a combined area of 7,828 square kilometres.  Karoon and its joint venture partner, ConocoPhillips (Browse Basin) Pty Ltd, drilled the Poseidon-1 gas discovery during 2009 with  follow-up wells Poseidon-2 and Kronos-1 drilled between July 2009 and June 2010. The Kronos-1 well discovered a separate  accumulation with a gas water contact significantly deeper than that determined at Poseidon-1. A facilities constrained drill stem  test at Kronos-1 flowed 26 million cubic feet of gas per day through a ½ inch choke.  The Browse Basin now has several gas discoveries, some of which are at a mature appraisal stage and as developments will  provide feed gas to major new infrastructure projects in the northwest of Australia. Over the financial year, several potential LNG  projects in the Browse Basin were reported as nearing Final Investment Decision (‘FID’). As more projects reach FID, the Browse  Basin will become a major new hydrocarbon-producing province offshore northwest Australia. FID on a 3.6 million tonne per  annum (‘MMtpa’) floating LNG facility for the Prelude and Concerto gas fields was reportedly made during May 2011. The Inpex  operated Ichthys project received Federal Government environmental approvals during June 2010 for an 8.4 MMtpa plant in  Darwin and is progressing towards FID. Woodside as the operator of Torosa, Brecknock and Callance gas fields is currently  working towards a development decision. Karoon anticipates, that at the completion of the phase-2 drilling in the greater Poseidon  trend, the ConocoPhillips/Karoon joint venture will be in a position to move towards adding significantly to the Browse Basin development projects. During the financial year, processing of the 2,828 square kilometre Poseidon 3D seismic survey was completed. The data acquired  from the 2009/2010 drilling campaign was analysed and integrated with the new seismic data and the interpretation is forming  the basis for planning the next phase in the exploration of the greater Poseidon trend. Several potential well locations were  identified and the joint venture commenced preparations for a new drilling campaign.  The joint venture also embarked on the reprocessing of 2D and 3D seismic data over WA-314-P to improve the quality of the  subsurface imaging over key exploration trends. The reprocessing project is scheduled to be complete by the end of 2011. The  data will then be reinterpreted with the objective of determining potential well locations, one of which will be drilled as part of the  phase-2 Browse drilling campaign. Seismic Processing and Interpretation Active pipeline Planned pipeline Hydrocarbon phase Gas Gas/condensate Oil Licence status Karoon acreage Wyndham Darwin LNG Plant Kununurra Western Australia Timor Australia Indonesia Northern Territory Jabiru Skua Crux Cassini Ichthys Argus Brecknock Callance Torosa Karoon Permit WA-314-P Karoon Permit  WA-398-P Poseidon Karoon Permit WA-315-P Petrel Tern Blacktip Bayu/Undan Joint Petroleum Development Area Territory of Ashmore & Cartier Islands Timor Sea Timor Sea Bonaparte Basin Browse Basin Laminaria Corallina Sunrise/Sunset Troubadour Evans Shoal Australia Canberra 200km 0 Browse Basin Permits WA-314-P, WA-315-P and WA-398-P Karoon Gas Australia Ltd  Annual Report 2011 5