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Karoon Gas www.karoongas.com.au

Karoon Gas's (ASX: KAR) core focus and strategy is to identify, explore and develop acreage that is highly prospective for oil and gas . Karoon currently has five focus areas, the Browse Basin (Western Australia), Bonaparte Basin (Northern Territory), Tumbes Basin (Peru), Marañón Basin (Peru) and the Santos Basin (Brazil).

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Karoon Gas expects Brazilian deal in July, weeks away from hitting target in Browse Basin well

Karoon Gas (ASX: KAR) has flagged that it may sign a farm out deal for its offshore Santos Basin exploration permits in Brazil in July.

Ed Munks, Karoon’s South American director, told media at the APPEA 2012 Conference in Adelaide today the company was in talks with a number of potential partners interested in taking a minority stake in its acreage.

Once this has been made, the company will go ahead with a A$200 million 3 back-to-back well drilling program starting in September or October this year as well as starting negotiations on farming out its Peru assets.

Karoon had originally expected to close a deal by the end of 2011 and has contracted the Blackford Dolphin semi-submersible drilling rig to drill the 3 wells.

The Blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166 are located 220 kilometres off the coast of Santa Catarina state, just south of Rio de Janeiro, and are on trend with the Piracucá oil, Caravela oil and Merluza gas fields.

The company had recently shot, processed and interpreted 750 square kilometres of 3D seismic that it said had further validated prospects defined on earlier 3D seismic as well as providing better definition and understanding of their potential.

Browse Basin

Karoon also said that progress was being made at the ConocoPhillips operated Boreas-1 well in the Browse Basin off Western Australia with the target zone expected to be intersected in three weeks.

Boreas-1 is the first of up to 5 wells aimed at better defining the size and characteristics of the greater Poseidon structure, which was discovered in 2008 and has contingent resources of about 7 trillion cubic feet of gas.

Boreas-1 well targets a large tilted fault block in WA-315-P about 4 kilometres south of the Poseidon-1 gas discovery that is part of the northeast trending structural high of the greater Poseidon structure.

It will test the extent, presence and quality of reservoirs within the Boreas-1 fault block.  

Once Boreas-1 is completed, the Transocean Legend semi-submersible drilling rig will move to drill the Zephyros-1 in WA-398-P, which targets a large tilted fault block about 8 kilometres southwest of the Kronos-1 discovery.

The third well, Proteus-1, is located in WA-398-P on a large tilted fault block about 14 kilometres southeast of Poseidon-1.

Additional well locations for the remainder of the minimum 5 well program will be announced as they obtain joint venture approval.

ConocoPhillips is the operator of WA-314-P, WA-315-P and WA-398-P that contain the previously announced Poseidon and Kronos gas discoveries.

The supermajor is funding 80% of the drilling and testing costs for the initial A$125 million of expenditure.

Karoon Gas holds 40% of WA-315-P and WA-398-P, and 90% of permit WA-314-P.

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