Karoon Energy shares climb on 25% output growth
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The news: Shares in Karoon Energy surged on the ASX after the oil and gas explorer increased production in the September quarter, despite output cuts due to hurricane related shut-ins at its Who Dat project last month.
The numbers: Karoon shares were up 2.52% to $1.42 by 11:15am AEDT but over the last 12 months it has plummeted 44.8%.
Karoon reported quarterly production, on a net revenue interest basis, of 2.68 million barrels of oil equivalent per day (MMboe), up 25% quarter over quarter.
Production from Karoon's Baúna project in Brazil grew 44%, while output from its Who Dat oil and gas fields in the US Gulf of Mexico fell 10% due to hurricane-related shut-ins and planned maintenance.
However, Q3 sales volumes sank 24% quarter on quarter to 2.06 MMboe, primarily due to timings, with a cargo in transit at the end of the quarter. Sales revenue for the quarter fell 32% to USD144.9 million ($218.44 million), reflecting lower sales volumes and 8% lower realised oil prices.
Karoon also slashed the top end of its CY24 production guidance, driven by last month's hurricane activity in the Gulf of Mexico. The company now expects total production of 10.5 MMboe to 10.8 MMboe, down from 10.5 MMboe to 12.5 MMboe.
Unit production costs are also expected to be higher, reflecting fixed costs spread over lower production levels, with the guidance range lifting from USD10.5 to USD15 per boe to USD13 to USD15.
Karoon said its inaugural dividend of 4.496 cents per share was announced and paid on 21 October, and its USD25 million share buyback was completed. Karoon's board has also decided to undertake a further USD25 million buyback, to be executed over the period through to 30 June 2025.
The context: Karoon said it continues to evaluate its Who Dat East exploration well, with initial results supporting the company's positive view of the project and its surrounding potential. Karoon said it intends to provide a resource update in the fourth quarter of 2024.
Elsewhere, Karoon progressed its strategy review during the quarter, aimed at updating the company's strategic direction for the next four years. This is expected to be completed and reported to the market by Q1 FY25.
The source: ASX announcement
