Karoon Energy Ltd

Underlying production was 10.3 million BOE, marginally down from 2024. Revenue was $628.6 million versus $776.5 million in 2024, with the decline driven by $100.4 million from realized price pressure and $47.5 million from lower sales volumes. Underlying NPAT was $107.5 million, operating cash flow was $231.3 million, unit production costs fell to $13.20 per BOE, pretax cash margin remained above 65% per BOE, and breakeven realized price improved from $33 to $31 per BOE. Year-end cash was $206.1 million, net debt was $143.9 million, and total liquidity was $546.1 million. For 2026, management expects a first-half period of intense investment and maintenance at Bauna and Who Dat, with second-half benefits from improved uptime, production, and cost reductions; Who Dat 2026 production is still expected to be within 2.1 million to 2.5 million BOE NRI, but likely at the lower end due to the riser leak and repair timing.

Carri Lockhart emphasized that 2025 showed the resilience of Karoon’s low-cost, high-margin asset base, even as oil prices softened. Her tone was constructive and strategic: she framed the Bauna FPSO acquisition as a key milestone that improved safety, reliability, cost efficiency, and field life, while also creating new optionality for future development. She repeatedly stressed disciplined project review for Neon, saying the company is deliberately optimizing cost and timing rather than forcing a schedule-driven FID.

Ray Church focused on underlying financial performance and the impact of one-off items, including the FPSO acquisition, Petrobras contingent consideration accounting, and flotel campaign costs. He highlighted $628.6 million of sales, $107.5 million of underlying NPAT, $231.3 million of operating cash flow, and year-end liquidity of $546.1 million. He also noted that the pretax cash margin stayed above 65% per BOE, unit production costs improved to $13.20, and the breakeven realized price moved down to $31 per BOE, while net debt ended at $143.9 million because of the FPSO acquisition.

Analysts pressed management on Neon optimization, including what cost-outs are being considered and whether FID could slip to end-2026; management said the project is being re-evaluated through a disciplined process, including alternate development concepts, possible use of the Bauna FPSO, and a 30% to 50% farm-down, with more detail expected midyear. Questions on the Who Dat riser leak focused on repair scope, timing, and whether guidance might change; Carri said the issue is early-stage, the plan is to reroute wells first and complete final riser repairs later, and the 2026 production range is still expected to hold, though at the lower end. Analysts also asked about Harbour Energy’s acquisition of the operator and whether it could alter investment pace, but management said current plans remain intact and even show slight acceleration on the A1 sidetrack.