Company Interview / How Karoon plans to make pipe dreams a reality

Key points:

Weaker first half driven by planned outages, but full-year production guidance is reaffirmedStructurally lower costs and higher operational efficiency expected to support stronger second half cash flowCapital allocation focused on dividends, buybacks and funding growth projects such as Who Dat East and Neon

Karoon Energy CEO Carri Lockhart outlines a challenging first half, with sales revenue down 21% to about US$245 million and underlying net profit 35% lower at US$29.2 million. Lockhart attributes the weaker result mainly to planned shutdowns and a riser issue at Baúna, which are now said to be resolved. Full-year production guidance is reaffirmed at 7.2–8.2 million barrels of oil equivalent, with structurally lower costs expected after completing the major Baúna investment campaign. The company maintains a fully franked interim dividend of 1.2 cents per share, alongside an ongoing on-market buyback that has retired about 13% of shares since 2024.

Lockhart states that operational efficiency has exceeded internal expectations for three consecutive quarters, giving confidence in a stronger second half and more predictable output above a 95% uptime target. Planning is framed around a “lower for longer” oil price range of US$50–80 per barrel, which is viewed as still supporting solid cash flow, deleveraging and future growth investment.

Growth, in Lockhart’s view, is underappreciated by the market. The Who Dat East project has reached final investment decision, targeting first production in 2028 with an expected internal rate of return above 25%, with further upside from potential Who Dat South and additional infill developments. The Neon discovered resource and potential exploration farm-downs are also highlighted as key catalysts over the next 12–18 months.