Karoon Energy (ASX:KAR) Shares Gain 7.82% Following 1H25 Results

Sonal Goyal

27 August 2025 11:58 AM AEST

Karoon Energy (ASX:KAR) Shares Gain 7.82% Following 1H25 Results

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Highlights

Underlying NPAT: USD 45.0 million, down 61% from USD 115.8 million in 1H24, mainly due to lower sales volumes and a 14% drop in average realised liquids prices.

Statutory NPAT: USD 71.0 million, up 15% from USD 61.8 million in 1H24, reflecting adjustments for non-underlying items.

Unit Production Costs: USD 13.96/boe compared with USD 13.02/boe in 1H24.

Interim Dividend: AUD 2.4 cents per share unfranked, payable on 29 September 2025, equivalent to 25% of underlying NPAT.

Reserves Upgrade: Baúna Project 2P Reserves increased by 13.7 MMbbl to 52.7 MMbbl as at 30 June 2025, extending field life by seven years.

Project Progress: Neon and Who Dat East development opportunities advanced into the Define Phase, including FEED studies.

Updated Guidance: CY25 production forecast revised to 9.7–10.5 MMboe, with unit production cost guidance lowered to USD 12–15/boe.

Karoon Energy Ltd (ASX:KAR) shares rose 7.82% on 27 August 2025 to trade at AUD 2.00 per share after the company released its 1H25 financial results.

Financial Performance

Karoon’s 1H25 statutory NPAT rose 15% to USD 71.0 million (1H24: USD 61.8 million). After adjusting for non-underlying items, underlying NPAT was USD 45.0 million, down 61% from USD 115.8 million. The difference was primarily due to flotel campaign costs, the unsuccessful Who Dat West well, changes in the fair value of the Baúna contingent consideration, and non-cash tax adjustments linked to foreign exchange impacts.

Production rose 4% year-on-year to 5.30 MMboe on an NRI basis. However, sales volumes were 13% lower due to the timing of Baúna liftings, with revenue from a late-June cargo recognised in July. Combined with lower liquids prices, sales revenue declined 25% compared with 1H24.

Operating costs increased to USD 54.3 million (1H24: USD 40.9 million), mainly from Baúna transitional services and higher logistics costs. Baúna FPSO lease expenses decreased following the vessel’s acquisition in April 2025. Finance costs rose due to higher debt, while DD&A increased on higher production volumes.

Cash Flow and Liquidity

Operating cash flow fell to USD 81.6 million (1H24: USD 224.3 million), reflecting lower revenue, higher costs, and increased tax payments. Capital expenditure of USD 153.2 million included the Baúna FPSO acquisition, SPS-88 well intervention, Neon development, and Who Dat project maturation.

As at 30 June 2025, Karoon reported liquidity of USD 452.1 million, comprising USD 112.1 million in cash and USD 340.0 million in undrawn debt facilities.

Guidance Update

For 2025, Karoon upgraded Baúna production guidance on the back of strong first-half performance, though the estimate incorporates an ESP issue at SPS-92. Production guidance for Who Dat has been narrowed. Unit production costs are now forecast at USD 12–15/boe.

Exclusions from underlying NPAT in FY25 will include USD 21.1 million in flotel costs, USD 5–7 million in FPSO transition expenses, and USD 3–5 million related to corporate office relocations to the USA and Brazil.

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