Karoon Energy's Who Dat East Joint Venture has given the green light to develop the Who Dat East field in the Gulf of America, aiming for production start in the second half of 2028 with attractive economics.
- Who Dat East FID approved with 40% Karoon stake
- Production expected from 2H 2028 at ~2,600 boepd net
- Capital cost estimated at US$155–165 million net to Karoon
- Project forecasted to deliver over 20% IRR
- Contingent resources to be reviewed following sanction
Who Dat East Development Sanctioned
Karoon Energy (ASX:KAR) has reached a pivotal milestone with the Final Investment Decision (FID) approved for the Who Dat East field development in the Gulf of America. The project, operated by LLOG with Karoon holding a 40% interest, is set to commence production in the second half of 2028, delivering an initial net production rate of approximately 2,600 barrels of oil equivalent per day (boepd) on a net revenue interest (NRI) basis. This output is forecast to comprise around 45% liquids and 55% gas, reflecting the field's mixed hydrocarbon profile.
Project Scope and Capital Investment
The development plan involves completing the 2024 discovery well, laying a 29-kilometre pipeline to connect to the existing Who Dat Floating Production System (FPS), installing subsea controls, and implementing minor FPS upgrades. Karoon's share of the capital expenditure is estimated between US$155 million and US$165 million, with US$15 million to US$20 million earmarked for spending in the second half of 2026. Production from Who Dat East will be co-mingled and processed through existing infrastructure, leveraging established routes to market and minimising incremental costs.
Economic Outlook and Resource Reassessment
The project is expected to generate an internal rate of return (IRR) exceeding 20% under mid-case assumptions, signalling a robust economic profile. Karoon plans to reassess its contingent resources for Who Dat East at the 2026 year-end, potentially recategorising portions of these resources following project sanction. As of 31 December 2025, the contingent resources net to Karoon stood at 7.0 million barrels of oil and condensate (2C) and 52.2 billion cubic feet of natural gas (2C), translating to 15.7 million barrels of oil equivalent (mmboe).
Strategic Significance for Karoon
Karoon’s CEO and Managing Director, Carri Lockhart, emphasised the development’s strategic value, describing it as "economically attractive" and a source of "material low cost, high margin production". The sanction comes amid Karoon's ongoing efforts to stabilise and grow production, following operational challenges earlier in the year. The project’s relatively modest capital intensity and integration with existing infrastructure support Karoon’s disciplined capital allocation approach.
Partnership and Operational Collaboration
The Who Dat East Joint Venture comprises LLOG as operator with a 40% interest, Karoon USA holding 40%, and Westlawn Americas Offshore owning 20%. The collaborative dynamic among partners has been highlighted as a key enabler for reaching FID and moving into the construction phase. The field’s location in approximately 1,300 metres of water depth within lease MC 509-1 presents typical offshore development challenges, but the established Who Dat infrastructure mitigates execution risks.
Bottom Line?
As Karoon moves Who Dat East towards first oil, the focus will shift to execution discipline and commodity price dynamics that will ultimately determine the project’s contribution to the company’s growth trajectory.
Questions in the middle?
- How will Karoon’s contingent resource recategorisation affect its reserves profile at year-end 2026?
- What impact will commodity price fluctuations have on the project’s forecast IRR and capital allocation?
- How will Karoon balance Who Dat East development with other operational priorities and capital demands?