Company Interview / Karoon Energy hit by lower oil prices

Key Points:

Karoon Energy (ASX:KAR) posts 50% profit drop linked to lower oil prices and production Share buyback and fully franked final dividend of 3.1 cents announced Transition to full operatorship in Brazil seen as a pivotal phase Expansion opportunities highlighted in the Who Dat facility, neon oil project, and Esmeralda block

Karoon Energy (ASX:KAR) has reported a 50% drop in full-year underlying net profit to $107.5 million USD, reflecting lower realised oil prices and decreased production at its Brazilian offshore oil field. Carri Lockhart attributes this to soft oil prices, noting that Brent crude was around $10 lower year-on-year. Despite these challenges, Lockhart highlights strong sales revenue of $628.6 million and underlines Karoon's position as a low-cost operator, delivering high-margin barrels and maintaining robust cash flows even in a volatile commodity price environment.

Lockhart states that Karoon remains committed to its share buyback program, subject to market conditions and price fluctuations, and sees the company’s shares as undervalued. A fully franked final dividend of 3.1 cents per share has been declared, taking the total for the year to 5.5 cents. Operationally, Lockhart says the transition period in Brazil is pivotal, with full operatorship expected in the second quarter alongside major capex focused on system reliability and production restoration.

Looking ahead, Lockhart points to progress on the Who Dat facility in the Gulf Coast, neon oil project, and Esmeralda block in Brazil. The company balances a strong Australian investor base with international growth ambitions, citing Karoon's roots and consistent shareholder returns.