Karoon Energy Ltd

Karoon said 2025 production was 10.3 million BOE, versus 2024, with revenue of $628.6 million compared with $776.5 million in 2024. Underlying NPAT was $107.5 million, operating cash flow was $231.3 million, unit production costs fell to $13.20 per BOE, and breakeven realized price improved to $31 per BOE from $33. The company reported pretax cash margin above 65% per BOE and year-end net debt of $143.9 million, with $206.1 million of cash and $546.1 million of total liquidity. For 2025, the board declared a fully franked final dividend of AUD 0.031 per share, bringing total declared dividends to AUD 0.055 per share, and the company paid shareholders $80 million including $35 million of dividends and $45 million of buybacks. Looking ahead, Karoon said 2026 is expected to have two distinct halves, with heavy first-half spending on Bauna and Who Dat, and then benefits later in the year; Who Dat 2026 production is currently expected to be within guidance of 2.1 million to 2.5 million BOEs NRI, but toward the lower end.

Carri Lockhart’s message was that Karoon’s portfolio is high-margin, resilient, and still generating solid cash despite softer oil prices. She emphasized 2026 as a year of concentrated investment in maintenance, reliability, and well work, with the goal of improving uptime, lowering operating costs, and lifting production in the second half. She was also upbeat on longer-dated growth, especially Neon, Piracuca, and South Santos, while stressing a disciplined approach to project timing and capital allocation.

Ray Church focused on the underlying financial drivers and the impact of one-off or financing-related items. He said revenue was hit by $100.4 million from lower realized prices and $47.5 million from lower sales volume, partly offset by $40 million of FPSO lease D&A and interest savings, while production costs also benefited from $7 million net improvement. He highlighted $231.3 million of operating cash flow, $57.8 million of free cash from operations, ending cash of $206.1 million, total liquidity of $546.1 million, and net debt of $143.9 million after funding the FPSO acquisition and shareholder returns.

Analysts focused on Neon economics, including cost-out opportunities, timing to FID, and whether the Bauna FPSO ownership could change the development concept; management said the project is under a disciplined review, with more detail expected around midyear, and that a slower, less schedule-driven process may better support returns and the balance sheet. Questions on Who Dat centered on the riser leak and potential production impact; management said roughly 30% of production is tied to the affected riser, expects most production to be restored in the next 1-2 months with final repairs later, and still sees 2026 within guidance, albeit at the low end. Analysts also asked about Harbour Energy’s acquisition of operator LLOG, and Karoon said its engagement continues normally, with no change to current plans.