By Digifin Pty Ltd · About this coverage
Key Points
- Neon Phase 1 capital costs (100%) revised to US$800-950 million, from US$0.9-1.2 billion
- Phase 1 expected to recover approximately 60 MMbbl, with first oil targeted for 2030
- Target peak production rate of 25,000 - 30,000 bopd
- Post tax, unlevered IRR in the mid-20% range at US$73.50/bbl Brent
- Farm-down partner for a 30-50% interest required before FID, targeted in 2H27
About Karoon (ASX:KAR)
Karoon Energy Ltd is an ASX-listed oil and gas exploration and production company headquartered in Melbourne. It produces oil from the Baúna project offshore Brazil and holds non-operated interests in producing oil and gas fields in the United States Gulf. It also holds exploration and appraisal interests in Brazil and the United States.
Karoon (ASX:KAR) has selected a revised, phased development concept for the Neon oil project offshore Brazil after reassessing the earlier plan, and the project now proceeds to Front-End Engineering Design (FEED).
Phase 1 capital costs (100%) are now estimated at US$800-950 million including contingency, revised from US$0.9-1.2 billion in April 2025. The initial phase would use three subsea production wells, previously four, and one gas injection well, which Karoon expects to recover approximately 60 MMbbl based on its internal mid-case assessment, a portion of Neon's 2C Contingent Resources of 90.3 MMbbl. Karoon targets first oil in 2030 and a peak production rate of 25,000 - 30,000 bopd. Preliminary economics, the company says, indicate a post tax, unlevered IRR in the mid-20% range at a long term Brent oil price of US$73.50/bbl (2026 real), with payback in less than two years post first oil. Karoon has signed a subsea EPCI Memorandum of Understanding with TechnipFMC and an Exclusivity Agreement with Altera Infrastructure relating to the FPSO Piranema Spirit. A leasing alternative for the FPSO will be evaluated during FEED.
No Final Investment Decision has been taken; Karoon targets one in 2H27. A suitable farm-down partner on acceptable terms, for a 30-50% interest, is required before FID, and cost estimates are still to be narrowed during FEED.
Source: Karoon Energy Ltd (ASX:KAR), 9 November 2026. Summary content supplied by Digifin Pty Ltd.
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