Karoon gets Browse Basin green light

Karoon Gas has received federal environmental approval to commence drilling at its Browse Basin gas permits off the Western Australian coast.

The company announced this morning that it had received the nod to commence drilling from the federal Department, of Sustainability, Environment, Water, Population and Communities and it was moving quickly to commence its drilling programs.

Karoon said final drilling contracts for a five-to-eight well campaign were being negotiated, and it expected drilling to commence during the fourth quarter of this year.

"At least four wells are planned for the WA-315-P and WA-398-P permits, which contain the previously announced Poseideon and Kronos gas discoveries, with one well planned for the WA-314-P permit," Karoon's statement said.

"The results of the drilling campaign will allow the size and quality of the hydrocarbon accumulations within the exploration permits to be determined in preparation of a development decision.

"Karoon believes that the additional new prospects identified are of sufficient size that, if successful, would result in a meaningful increase in the capacity and economics of an eventual LNG project."

Karoon is seeking to develop its Browse Basin permits in joint venture with ConocoPhilips.

At 10:30AM (WST) Karoon shares were up 6.25 per cent to $5.61.