Karoon Energy Ltd (ASX:KAR): 2026 Production Guidance Revised After Baúna Well Fault

Aditi Sarkar

13 October 2026 06:52 PM AEDT

Karoon Energy Ltd (ASX:KAR): 2026 Production Guidance Revised After Baúna Well Fault

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Highlights

Karoon revised its 2026 production guidance following an electrical fault at the SPS-92 well.
First-half 2026 revenue and production were below the comparable period.
Production costs and operating cash flow reflected maintenance and operational interruptions.
Who Dat East development received a final investment decision in August 2026.
The company is planning an intervention at SPS-92, subject to approvals and services.

Karoon Energy Ltd (ASX:KAR) is an international oil and gas exploration and production company with assets in Brazil and the United States. Its 2026 operating programme spans the Baúna offshore oil project and interests in the Who Dat field. September developments at Baúna have led to revised full-year production and unit-cost guidance, following financial results that reflected planned maintenance and interruptions to offshore production.

SPS-92 Issue Changes the Production Outlook

On 28 September 2026, Karoon Energy (ASX:KAR) reported an electrical fault affecting the power cable for the electric submersible pump at its SPS-92 well in Brazil. A monitoring fault was identified on 21 September and a controlled shutdown followed on 22 September. Subsequent testing identified a fault in one of three electrical phases; the pump was then operated conservatively using the remaining two phases.

Karoon estimated that approximately 3,500 barrels of oil per day (bopd) would be deferred until the cable system is replaced. It has commenced planning for a rig-based intervention, although timing depends on permits, equipment and services. The company said the deferral was not currently expected to affect Baúna reserves. Potential insurance recoveries remain subject to policy terms and confirmation.

Latest 2026 Guidance and Operating Costs

Following the SPS-92 issue, Karoon Energy (ASX:KAR) reduced calendar-year 2026 Baúna production guidance from 6.0–6.7 MMbbl to 5.4–5.7 MMbbl. Who Dat net revenue interest production guidance remained at 1.2–1.5 MMboe. Consequently, total group production guidance was revised from 7.2–8.2 MMboe to 6.6–7.2 MMboe.

The company also increased its 2026 unit production cost guidance from US$12–15/boe to US$15–16/boe, citing reduced volumes against a relatively fixed cost base. Other guidance was left unchanged in the September update. These are company guidance ranges rather than achieved production or costs.

Half-Year Results Reflect Lower Volumes

For the six months ended 30 June 2026, Karoon Energy (ASX:KAR) reported sales revenue of US$244.9 million, compared with US$308.3 million in 1H25, a 21% decrease. Net working interest production declined from 5.64 MMboe to 3.17 MMboe, while underlying EBITDAX decreased from US$200.5 million to US$129.7 million. Statutory net profit after tax was US$26.7 million, compared with US$71.0 million.

Operating cash flow totalled US$58.4 million, versus US$81.6 million in the comparable period. Unit production costs increased from US$13.11/boe to US$18.82/boe. The company linked lower production and sales to the Baúna investment campaign and a production-riser issue at Who Dat. Net debt stood at US$269.7 million on 30 June 2026, compared with US$143.9 million at the end of 2025, mainly reflecting the Baúna capital programme.

Development Activity Across Two Regions

In August 2026, Karoon Energy (ASX:KAR) announced approval of a final investment decision for the Who Dat East development. The company also reported that its Baúna FPSO investment campaign had been completed, including the transfer of FPSO operatorship in May. Separately, it continued technical and commercial work on the Neon development concept, with a decision on proceeding to front-end engineering and design under consideration for the fourth quarter of 2026.

Key Insights

Karoon Energy (ASX:KAR) now faces a narrower 2026 production range following the SPS-92 cable fault. The first-half figures show the financial effects of lower output and a concentrated capital programme, while Who Dat East represents a separate development undertaking. Subsequent disclosures on repairs, operational availability, capital expenditure and reported volumes will clarify how the company’s offshore activities are progressing.

FAQs

Q: What does Karoon Energy produce?

A:Karoon produces oil and gas through assets in Brazil and the United States.

Q: Why was 2026 production guidance revised?

A:An electrical fault at the Baúna SPS-92 well reduced expected production.

Q: What is the revised total production range for 2026?

A:The company guided to 6.6–7.2 MMboe for calendar-year 2026.

Q: How much revenue did Karoon report for 1H26?

A:Sales revenue was US$244.9 million.

Q: What is Who Dat East?

A:It is a development project in the US Gulf for which a final investment decision was approved in August 2026.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.