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Karoon Rises After Second Oil Discovery Off Brazil: Sydney Mover

May 6 (Bloomberg) -- Karoon Gas Australia Ltd., an explorer with prospects in South America, rose the most in four years in Sydney trading after making its second oil discovery this year off the coast of Brazil.

Karoon climbed 23 percent to A$4.89, the most since April 27, 2009, while Australia’s benchmark S&P/ASX 200 Index gained 0.5 percent.

Oil was found at the Bilby-1 exploration well in Brazil’s Santos Basin, with evaluation of the discovery expected to continue through May, the Mt. Martha, Victoria-based company said today in a statement. That follows the company’s oil discovery at the Kangaroo-1 well in January.

Karoon, cited in December as a possible takeover target by Citigroup Inc., is exploring off the coasts of Brazil and Peru after scrapping a proposed initial public offering of its South American business in November 2010. Colombia’s Pacific Rubiales Energy Corp. agreed in September to acquire a 35 percent stake in Karoon’s blocks off Brazil.

Work is under way to obtain a drilling rig to appraise the Kangaroo and Bilby fields and other prospects, Karoon said today. The three-well drilling program comprising Kangaroo, Emu and Bilby will finish after the evaluation of Bilby-1, the company said. Oil was confirmed from sampling a more than 200-meter (656-feet) section, Karoon said.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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