Karoon Energy shares boosted by first-half update, Baúna reserves upgrade
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More news: Karoon Energy shares rallied after the oil explorer reported a lift in first-half statutory profit and announced increased reserves at its Baúna project in Brazil
Shares were up 6.6% to $1.98 at 12:35pm AEST. The stock has added 12% over the last 12 months.
Karoon Energy first-half underlying profit drops 61% on lower volumes, prices
The news: Oil and gas producer Karoon Energy booked a first-half statutory net profit of USD71 million ($109 million), down 15% from the USD61.8 million posted during the prior corresponding period.
However, underlying net profit tumbled 61% year on year to USD45 million, due to lower sales volumes and 14% lower average realised liquids prices.
The numbers: The company, which upgraded its full-year production guidance on Monday, saw first-half output climb 4% year on year to 5.3 millions of barrels of oil equivalent (MMboe). However, sales volumes lowered 13% to 4.75 MMboe and sales revenue dropped 25% to USD308.3 million.
Karoon declared an interim dividend of 2.4 cents per share, having announced its inaugural half-year payout of 4.496 cents per share a year ago.
Karoon also today upwardly revised its estimate for proved and probable (2P) reserves at its Baúna project in Brazil. The 2P reserves are now 13.7 million barrels, or 35%, higher than at 31 December, totalling 52.7 million barrels. The economic field life of the project has consequently been extended by seven years to 2039.
The context: Outgoing CEO Julian Fowles said that underlying net profit was impacted by lower average realised liquids prices and the timing of shipments from Baúna, with revenue from a late June cargo booked in July.
Net profit was also hit by increased finance costs due to a higher average net debt position, as well as a number of non-cash charges, he said.
Karoon completed its acquisition of Baúna's floating production storage and offloading unit in April. The company said it hopes the move will help it optimise operating costs, ongoing maintenance and operating capex activities, including planning for life extension at the project.
