While Karoon’s focus is primarily on Brazil, the Company’s the Joint Venture did not submit an election to proceed into the strategy also includes the evaluation of high-potential Australian Fourth Period and consequently the Block Z-38 licence contract licences that have medium term production potential and provide lapsed on 27 July 2021. geographic diversity. Tumbes Basin, Area 73 Exploration and evaluation activities in FY2021 Technical Evaluation Agreement, Operator During the year, seismic reprocessing and interpretation, and Brazil geological studies were completed on offshore Area 73, adjacent Santos Basin, Blocks S-M-1037, S-M-1101 to and south of Block Z-38. Based on the results of this work, 100% Equity Interest,Operator Karoon decided not to proceed to negotiate a licence contract in The Neon oil discovery (previously called Echidna) in BM-S-1037 respect of the Area. and Goiá oil discovery (previously called Kangaroo) in S-M-1101, Australia located 50-60 kilometres north-east of Baúna, were discovered by Northern Carnarvon Basin, Permit WA-482-P Karoon in 2015 and 2013, respectively. Together, they contain 2C contingent oil resources of 82 MMbbl. 50% Equity Interest, Non-Operator Over the year, the WA-482-P Joint Venture completed the In June 2021, Karoon announced it had received approval from reprocessing of existing 3D seismic data and continued geological the Agencia Nacional do Petroleo Gas Natural e Biocombustiveis and geophysical studies, with a focus on de-risking the numerous (ANP) for the integrated Development Plan for Neon and Goiá that prospects in the licence and attracting a farmin partner for the next had been submitted to the ANP in December 2019. This approval period, for a full carry on a future well. does not mean that Karoon has reached, or is compelled to reach, a decision to proceed into a development of the fields. Ceduna Sub-basin, Great Australian Bight, Permit EPP46 100% Equity Interest, Operator During the year, the Company commenced subsurface development In late 2019, Karoon submitted a formal application to surrender planning and engineering studies on Neon, aimed at optimising Permit EPP46 to the regulatory authorities.On 12 July 2021, the development concept.This work has identified attractive Karoon was advised by the National Offshore Petroleum Titles alternative development concepts, which will be further evaluated Administrator that the Commonwealth-South Australia Offshore during FY2022. Karoon has an option to extend its contract with Petroleum Joint Authority had issued a notice of the intention to the Maersk Developer to potentially drill a control well on Neon, cancel EPP46. following the completion of the two Patola development wells. The major objectives of the control well would be to delineate Browse Basin further the southern region of the field, confirm reservoir quality In relation to Karoon’s sale of a 40% interest in permits WA- and assist with the planning and design of development wells and 315-P and WA-398-P, including the Poseidon gas discovery, to supporting infrastructure. Origin Energy Browse Pty Ltd in June 2014, at the end of FY2021, Progress into the potential Neon development is contingent on the outstanding deferred milestone payments remain contingent. results of these studies and drilling the control well. These comprise US$75 million due at FID, US$75 million due at first production and a resource step-up payment of up to US$50 Santos Basin, Block S-M-1537 million payable on first production. 100% Equity Interest, Operator Outlook for FY2022 During the year, geological and geophysical studies took place on The Baúna acquisition has cemented the southern Santos Basin Block S-M-1537 block, which was acquired in the ANP 14th Bid as a key area of subsurface focus, and has brought operational Round in 2018, to de-risk the main Clorita Prospect. This prospect synergies and improved economics to all Karoon’s Santos Basin is targeting the same high-quality Oligocene turbidite reservoirs seen in the producing Baúna field, 50 kilometres to the north. The assets. studies are designed to exploit key learnings from the Baúna field, Work will continue on subsurface assessment and development leveraging advanced seismic analysis and detailed understanding planning for the Neon light oil discovery. A decision will be made of the play to efficiently de-risk the prospect. in early calendar 2022 on whether to exercise the option to drill Peru a control well in Neon using the Maersk Developer, following the completion of the two Patola development wells. Tumbes Basin, Block Z-38 75% Equity Interest, Operator1 Karoon’s geoscience teams will continue to work on subsurface Evaluation of technical data from the unsuccessful Marina-1 evaluation of opportunitiesto enhance production and to exploration well, drilled in the first quarter of calendar 2020, and evaluate the regular bid rounds and Permanent Offer processes for reprocessed 2D seismic showed that there was no meaningfulopportunities that can leverage off the Company’s infrastructure prospectivity remaining in the block.Having fulfilled the Third base and extend the Baúna economic field life. Period work program obligations under the concession agreement, 1.Karoon’s 75% equity interest remains subject to farm-in obligations and regulatory approval. Karoon Energy Ltd 21 Annual Report 2021