Karoon Energy Ltd. has taken the Final Investment Decision to proceed with the development of the Patola Project. This decision follows comprehensive analysis and due diligence by Karoon and its independent advisers and financiers. The Patola field is located within the 100% Karoon-owned and operated BM-S-40 Production Licence in the Santos Basin, offshore Brazil and is adjacent to the producing Baúna and Piracaba accumulations. The decision to develop Patola, which will be tied back to the existing Baúna Floating Production, Storage and Offloading (FPSO) vessel, Cidade de Itajaí, is in line with Karoon's near term strategic goals to deliver safe and reliable operations and grow through the addition of value- accretive production. The development comprises the following: Two near vertical subsea production wells, which will be drilled and completed using the recently contracted Maersk Developer rig immediately following the completion of the four- well Baúna intervention program. The design, manufacture and installation of subsea infrastructure (Christmas trees, flowlines, risers, umbilical, controls) by TechnipFMC under an integrated Engineering, Procurement, Construction and Installation (iEPCITM) contract. TechnipFMC is one of the world's leading experts in the design and installation of offshore energy infrastructure. Minor works to tie back the two production wells to spare riser slots on the FPSO. The Patola development budget is USD 175 - USD 195 million, of which approximately USD 17 million has already been invested to ensure that long lead items are available to meet the project timeline. The remaining capital costs will be funded through a combination of a newly arranged USD 160 million reserve-based, non-recourse, syndicated facility agreement, and cash flows from operations. These include a requirement to hedge a portion of Karoon's future oil production, to protect cash flows in the event of lower oil prices. At present, it is anticipated that approximately 40% of Karoon's forecast production in year 1 of the loan and 30% of Karoon's forecast production in year 2 of the loan will be hedged. It is intended that the hedges will be structured to create a price floor at levels that protect the debt repayments but allow exposure to prices in excess of the current Brent oil price on the portion of hedged production. Patola is expected to produce at an initial rate of more than 10,000 bopd from high quality reservoirs of the same geological age as those in the adjacent Baúna and Piracaba fields. First oil production is targeted for the first quarter of calendar year 2023.