Karoon Energy Boosts Q2 Production 25% Amid Baúna FPSO Takeover

Operational Recovery Drives Production Growth

Karoon Energy’s second quarter of 2025 saw a robust 25% increase in net revenue interest production to 2.94 million barrels of oil equivalent (MMboe), rebounding strongly from a planned 20-day maintenance shutdown at the Baúna Project earlier in the year. The Baúna Project accounted for 77% of production, with the remainder coming from the Who Dat assets in the US Gulf Coast.

Despite a 12% decline in realised oil prices, sales revenue rose 7% to nearly US$160 million, reflecting higher volumes. The Baúna FPSO acquisition, completed in late April, marks a strategic milestone, with Karoon now progressing toward operating the vessel directly. This shift aims to enhance operational control, safety, and maintenance efficiency, with a full transition expected by mid-2026.

Neon Development Advances with Resource Upgrade

The Neon development opportunity in Brazil’s Santos Basin moved into the Define Phase in April, accompanied by a 44% increase in 2C contingent resources to 86.5 million barrels. This uplift follows seismic reprocessing and subsurface studies, underscoring the project’s growing potential. Karoon is preparing to farm down a 30–50% interest in Neon, with the sale process set to begin in the third quarter and conclude by year-end, contingent on market conditions and project economics.

Looking ahead, a decision on progressing to the next Define Phase stage is expected in the fourth quarter, which will include environmental surveys and cost refinement tenders. The farm-down and positive development milestones are critical steps toward a potential final investment decision.

Who Dat Maintains Stability Amid Facility Work

Production from the Who Dat assets was slightly lower, down 3% on a net revenue interest basis, due to maintenance activities in April. However, improved uptime in May and June helped stabilise output. Preparations are underway to drill a sidetrack well (E6 ST1) in the third quarter, which, if successful, could add 700–1,200 barrels per day net to Karoon from late 2025.

Development studies for the Who Dat East and South discoveries continue, with a final investment decision for Who Dat East targeted for late 2025 or early 2026. The existing production facility is capable of accommodating tiebacks from these discoveries with minimal modifications, presenting a cost-effective growth opportunity.

Financial Position and Corporate Changes

Karoon’s net debt increased to US$237.9 million at quarter-end, driven primarily by the Baúna FPSO acquisition and ongoing share buybacks, which have seen the company repurchase nearly 9% of its shares since mid-2024. Capital expenditure for the quarter was US$102.9 million, including US$85 million for the FPSO purchase and related costs.

On the corporate front, Karoon has begun relocating key office roles from Melbourne to Houston and Rio de Janeiro to streamline operations and enhance collaboration. CEO Dr Julian Fowles announced he will not relocate to Houston and plans to depart by mid-2026, with the board initiating a search for his successor.

Sustainability and Social Initiatives

Karoon continues to advance its sustainability agenda, offsetting its 2024 Scope 1 emissions through Verified Carbon Units from the Envira Amazonia Project in Brazil. The company also launched multiple incentivised and voluntary social projects aligned with UN Sustainable Development Goals, aiming to benefit employees and local communities impacted by its operations.