Karoon Issues Default Notice to Santos Basin Block Partner PEPC

Karoon Gas Australia Ltd. issued Tuesday a default notice to Pacific Exploration and Production Corp., its partner in Brazil's Santos Basin blocks S-M-1037, 1101, 1102, 1165 and 1166, for an overdue payment as provided for under the Joint Operating Agreement (JOA).

Both companies are currently working to resolve the issue and Karoon will provide further updates as necessary. Meantime, the planned Echidna appraisal drilling campaign scheduled for the September quarter is under review.

“While it is unfortunate the JOA default provisions have been triggered, Karoon and Pacific will be working together to remedy the current situation as quickly as possible. It is in both our interests to work together to resolve this issue in a timely manner and continue with the good work done on the Echidna light oil discovery to date,” Karoon’s Managing Director, Robert Hosking said in the press release.

Karoon holds 65 percent operating interest in the Brazilian offshore blocks, while Pacific has the remaining 35 perent stake.



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