Karoon Energy (ASX:KAR) Doubles Quarterly Output to 2.27 MMboe as Revenue Climbs to US$191.6m

Sonal Goyal

22 October 2026 12:11 PM AEDT

Karoon Energy (ASX:KAR) Doubles Quarterly Output to 2.27 MMboe as Revenue Climbs to US$191.6m

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Key Highlights

Third quarter 2026 production was 2.27 MMboe, up 110% on the second quarter, with sales revenue 64% higher at US$191.6 million.
Baúna operating efficiency reached 96% and Who Dat FPS efficiency 100%, helped by completed revitalisation and maintenance campaigns.
Cash was US$80.8 million and net debt US$269.2 million at 30 September 2026, with the US$340 million RBL facility undrawn.
Karoon bought back 13.3 million shares for US$16.0 million and paid a US$6.0 million interim dividend during the quarter.

Karoon Energy Ltd (ASX:KAR) reported third quarter 2026 production of 2.27 million barrels of oil equivalent, up 110% on the second quarter, as the Baúna FPSO revitalisation campaign was completed and the SPS-92 and PRA-2 wells returned to production. Sales revenue rose 64% to US$191.6 million, helped by the higher volumes and partly offset by lower average realised oil prices.

Operating cash flow funded all capital expenditure, second quarter accruals and shareholder returns during the period, and calendar 2026 production and unit cost guidance was left unchanged from the update of 28 September.

Production and Operating Efficiency

Baúna in Brazil produced 1.83 MMbbl at an average of 19,930 bopd, compared with 0.84 MMbbl and 9,202 bopd in the second quarter. Water injection was restored in August, and FPSO efficiency was 96.3%, against 97.2% in the prior quarter.

At Who Dat in the US Gulf Coast, gross production was 1.78 MMboe at 19,373 boepd, against 1.03 MMboe in the second quarter. Net revenue interest production was 0.44 MMboe. The A1 sidetrack, which came online on 13 July, rose from 1,700 boepd in early July to about 2,400 boepd on a net revenue interest basis, and Who Dat efficiency was 99.9%.

In late September an electrical fault was identified in one of the three phases of the power cable serving the SPS-92 pump. The well is operating on two phases, which has reduced its output by approximately 3,500 bopd, to about 55% of pre-fault levels. Total Baúna production is currently 16,400 bopd. The company is investigating the cause, assessing intervention options and pursuing an insurance recovery. One lost time incident occurred in the quarter, the first in more than 600 days.

Revenue, Prices and Cash Position

Total sales were 2.39 MMboe, up 94%, from four Baúna cargoes totalling 1.97 MMbbl. Baúna oil revenue was US$158.6 million at an average realised price of US$80.60 per barrel, 15% lower than the prior quarter. Who Dat revenue was US$33.0 million, with liquids realising US$87.23 per barrel and gas US$5.00 per mcf.

Karoon received US$185.4 million from hydrocarbon sales. Cash outflows included US$88.5 million to suppliers and employees, of which US$66.8 million related to oil and gas assets, along with US$16.0 million for the share buyback and US$6.0 million for the interim dividend of 1.2 Australian cents per share paid on 30 September. Cash rose by US$0.5 million to US$80.8 million.

Net debt was US$269.2 million, comprising US$350.0 million of drawn debt. The September redetermination of the US$340 million RBL facility confirmed borrowing capacity of US$226.7 million, down from US$283.3 million, in line with the amortisation schedule. Total liquidity was US$307.5 million. Capital expenditure on an accruals basis was US$35.7 million, mostly for the SPS-92 intervention at US$19.8 million.

Growth Projects and Shareholder Returns

On 12 August the Who Dat East joint venture sanctioned an initial one-well development, with net capital cost of US$155 million to US$165 million over the second half of 2026 to the second half of 2028. First production is expected in the second half of 2028 at about 6,500 bopd of liquids and 50 MMscf/d of gas gross, equal to 2,600 bopd and 20 MMscf/d net to Karoon. Management cites an IRR above 20%.

A second Who Dat sidetrack, G1, is expected to start drilling in 4Q26 and contribute about 1,900 boepd net once online. Remediation of the E risers and flowlines is targeted for year end 2027.

At Neon in Brazil, the revised concept uses a redeployed FPSO and phased development, and a memorandum of understanding was signed with TechnipFMC as preferred subsea contractor. A decision on entering FEED is expected in 4Q26, and farm-out discussions would resume if it proceeds.

The company bought back 13.3 million shares at a weighted average A$1.71 for US$16.0 million. Since the programme began in the second half of 2024, it has cancelled 107.7 million shares at A$1.59 on average, for about US$113.4 million.

Where the Numbers Leave the Company

Karoon's third quarter combined 2.27 MMboe of production and US$191.6 million of revenue with cash of US$80.8 million, net debt of US$269.2 million and total liquidity of US$307.5 million. Calendar 2026 guidance remains at 6.6 to 7.2 MMboe of production, total capital expenditure of US$193 million to US$222 million and unit production costs of US$15 to US$16 per boe.

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