Preparation Underway for Kangaroo-2 Production Testing in Santos Basin

Karoon Gas Australia Ltd. revealed Wednesday that as at 2000 hrs BRST Dec. 2, wireline logging of the Kangaroo-2 appraisal well in Block S-M-1165 in the Santos Basin, offshore Brazil was complete and preparations were underway to run the 9.625 inch test casing prior to commencing the production testing program which will take place over the coming weeks.

It is anticipated Karoon will provide the next Kangaroo-2 appraisal well progress report following the completion of the production testing program. A decision on a potential side-track and coring program will be made on completion of the testing program.

Forward Program

Following the completion of all operations on the Kangaroo-2 appraisal well, the rig will be moved to drill and evaluate the Kangaroo West prospect approximately 2.8 miles (4.5 kilometers) distant on the western side of Kangaroo salt structure.

The Kangaroo-2 appraisal well is located in block S-M-1165, approximately 984 feet (300 meters) updip and 2.5 miles (4 kilometers) South of Kangaroo-1 and is the first well in the current Santos Basin exploration and appraisal drilling campaign. The information obtained from Kangaroo-2 will be crucial for assessing the commerciality of the Kangaroo oil field and will be the basis for the Front End Engineering and Design (FEED) phase bringing the project a step closer to commerciality.

Karoon holds a 65 percent interest in, and is operator of the jointly held S-M-1165 block, Santos Basin.

Upcoming Well Program

The exploration and appraisal drilling campaign, operated by Karoon, is expected to continue through first half 2015.

The rig contract provides Karoon with 2 firm wells plus 2 option wells, and, in the event of a successful drilling in the first 2 wells provides maximum flexibility for further appraisal of the Kangaroo oil discovery, including testing and appraisal of the Kangaroo West prospect.


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