During the financial year ended 30th June 2007, Karoon carried out exploration work in Victoria and Western Australia as well as procuring a Joint Venture Partner and a new permit in the Browse Basin, WA-398-P. In the West Gippsland permits Karoon re-entered the Megascolides 1 well to make further tests of the reservoir properties and drilled Megascolides 2. A drilling rig was also contracted to undertake the drilling program within the Browse Basin permits in 2008.

Following the encouraging results in the Megascolides 1 well Karoon acquired 250km of 2D seismic over the West Gippsland acreage during the financial year ending 30th June 2006. Karoon also acquired 1100 sq km of 3D seismic and 285 km of 2D seismic over high graded prospects in the Browse Basin permits.

During this financial year Karoon successfully drilled Megascolides 1 well and conducted geotechnical analysis of the company's exploration permits in the Western Gippsland Basin. It also required the right to farm-in to two large Browse Basin Permits in offshore Western Australia, WA-314-P and WA-315-P. With its joint venture partner it completed a permit-wide aeromagnetic survey and prepared an 800-1200 square kilometre 3D seismic survey.

The principal activities of the Company until the financial year 30th June 2004 were the investment in energy related projects in the exploration of the Western Gippsland Basin, a sedimentary basin in Victoria’s south east, using existing seismic information to assist in proving a potential commercial reserve of Coal Bed Methane (CBM).