Karoon has been awarded the former S15-1 as EPP 46 in the Ceduna Sub-basin, an undrilled 17.793sq.km area that sits adjacent to the off-structure Greenly-1, which had over 1800m of oil and gas shows, although the formations were 1000m deeper than expected, and Bight's 5.7 billion barrel Price structure.

Bight has also mapped the 445 million barrel Edith and 3.7Bbbl Marion structures as extending into EPP 46.

Karoon, which made its mark with the Greater Poseidon gas-condensate discoveries in the Browse Basin and has more recently focused on Brazil, says the Bight holds one of the world's last underexplored Cretaceous-aged basins and it has the potential to be a globally significant hydrocarbon province with world class potential.

While BP and Statoil are still fighting to seek permission to drill two wells in the Bight this year, Karoon will attempt to shoot 2D and 3D seismic over the initial three year term.

Bight has been unable to shoot its Lightning 3D survey because of opposition from residents of Kangaroo Island, and it seems likely Karoon will face similar opposition.

In the meantime, Karoon is also hoping to benefit from nearology, with a planned $1 billion of expenditure planned by BP, Chevron Corporation and others over the next two years.

Potential

The Ceduna Sub-basin is the major depocentre of the Bight and hosts a massive Cretaceous delta system, analogous to some of the great petroleum provinces around the world.

Existing data shows there are thick sediments and multiple structural and stratigraphic stacked play types that remain largely untested in the Bight. The presence of Greenly-1, natural seeps, and the recovery of organic rich Turonian source rocks recovered dredged in 2007 from the sea floor by Geoscience Australia, all suggest a working petroleum system.

Only four wells have been drilled in the Ceduna Sub-basin and, with the exception of Gnarlyknots-1/1A, all drilling was focused in the shallower, flanking depocentres in shallower waters near the basin margin.

The deeper part of the Bight remains largely untested and is the main industry focus for the current exploration programs.

Greenly-1, located in EPP41 to the east, encountered good quality sandstones of Cretaceous-age with significant shows thought to be of Cenomanian-Turonian age.

Gnarlyknots-1A, located in EPP 44 adjacent to the west of the permit, was drilled by Woodside Petroleum in 2003 but had to be abandoned 1500m above the main target because of the weather.

While the well intersected only two of the five targets it did encounter a large sandstone reservoir.

Karoon estimates it has paid just $26 million for the block, far less than its neighbours.

Knowing it is in for a fight with environmental groups, Karoon said in a statement that it takes its environmental responsibilities very seriously and will learn from the activity around it.

And it acknowledged that the presence of a marine reserve within its blocks will increase scrutiny on its actions, although it stressed the marine reserve area doesn't prohibit petroleum exploration, merely heightens environmental requirements.

It has mapped a number of fault block targets already.

Brazil

Separately in Brazil, where Karoon has focused much of its efforts over the past few years, the company confirmed it has been awarded the right to negotiate a final agreement with Petrobras and conduct due diligence for the acquisition of the Bauna and Tartaruga Verde fields.

Bauna is producing around 45,000bopd and would be owned 100% while the 50% non-operated interest in Tartaruga development project could see development of a 351MMbbl resource in the Campos Basin.

The purchase, the result of 12 months' work, requires completion of due diligence and board approval.

Brazil's Congress has also just voted to open up its pre-salt oil fields by scrapping Petrobras obligation to be the area's sole operator, a significant change to Brazil's offshore oil industry.

Petrobras will still have the first pick of the fields, but it means foreign investors suddenly have greater access to one of the world's best new petroleum plays.