Karoon Energy Ltd

Who Dat East was sanctioned on 12 August: a one-well development with first production in 2H28 at about 5,900 boepd NRI. Net cost to Karoon (40%) is US$155-165m, with US$15-20m in 2H26, and mid-case IRR above 20%. Resolves the pending FID.

material agreement

Baúna's PRA-2 well restarted on 6 July after the umbilical disconnected in October 2025, producing 1,000-1,200 bopd. All Baúna wells are now on, taking the field to about 22,000 bopd, completing the restoration flagged in June.

production update

SPS-92 at Baúna is back producing 8,600 bopd, lifting the project to about 20,500 bopd, with 1,000-2,000 bopd more expected when PRA-2 returns. Intervention cost more than expected, so 2026 capex guidance rises to US$178-202m from US$150-183m.

production update

Who Dat operator LLOG says production through the E manifold will not return in 2026, now expected in 2H27 after the failed riser is removed. Karoon cuts 2026 production guidance to 7.2-8.2 MMboe from 8.1-9.2, contradicting the earlier plan to restore 55-75% of curtailed output by mid-year.

production update

Operatorship of the Baúna FPSO passed from Altera & Ocyan to Karoon on 27 May 2026, completing the step that followed Karoon's April 2025 purchase of the vessel. Over 80% of the existing crew transferred. The transitional services agreement ends 1 June 2026, which the company says will further optimise operating costs.

asset acquisition disposition

Eric Williams becomes CFO from 23 March 2026, succeeding Ray Church, and Mark Mick becomes Chief Commercial and Technical Officer. Both are Houston-based. Church stays until September 2026; Roland Hamp keeps the Baúna operatorship transition until 30 June 2026.

director officer appointment

Brazil announced a 12% tax on oil export volumes from 12 March 2026, framed as windfall profit sharing and expected to be tax-deductible. It lapses after 120 days unless Congress ratifies it. It could hit Baúna export revenue, though no dollar impact is given.

regulatory community update

Carri Lockhart, formerly of Equinor and Marathon Oil, becomes Managing Director and CEO from 3 November 2025, succeeding Julian Fowles, whose resignation was announced 23 July 2025. The change comes as Karoon prepares to take over operating the Baúna FPSO.

director officer appointment

The PRA-2 well at Baúna shut in on 20 September when its control umbilical disconnected; repairs are expected by mid-2026. Baúna now produces about 19,700 bopd. 2025 guidance of 9.7-10.5 MMboe is unchanged, and the Who Dat E6 sidetrack is about to start.

production update

1H25 underlying profit fell 61% to US$45.0m on lower sales volumes and 14% lower realised liquids prices; statutory profit rose 15% to US$71.0m. Interim dividend is 2.4 Australian cents. Neon and Who Dat East are in the Define phase; Neon final investment decision is now targeted for 2H26. Unit cost guidance was cut to US$12-15/boe.

half year report

Baúna 2P reserves rose 13.7 MMbbl to 52.7 MMbbl at 30 June 2025, 35% higher than at year-end, after the FPSO purchase (completed 30 April) and lower declines. Field life extends seven years to 2039. Revitalisation spend is US$55-65m in 2026; an independent audit came within 5%.

resource reserve update

The SPS-92 well at Baúna lost one of three power cables to its downhole pump on 13 August, cutting output from about 8,500-9,000 bopd to 2,500-3,000 bopd. Repair needs a rig, not before 2Q26. Even so, 2025 Brazil guidance was raised to 7.3-7.8 MMbbl (total 9.7-10.5 MMboe).

production update

CEO Julian Fowles will leave by mid-2026 after Karoon decided to move key corporate roles from Melbourne to Brazil and the US. He stays until a Houston-based successor is appointed or the end of 2025, then serves a notice period. A global search is under way.

director officer appointment

Karoon won 100% of six Santos Basin blocks in a Brazilian bid round, two containing the Piracucá discovery near Neon. The bid bonus is about US$14.8m, with a US$20.2m minimum work program and no well commitments. 2025 capex guidance rises to US$120-140m.

asset acquisition disposition

Karoon completed the purchase of the Baúna FPSO, Cidade de Itajaí, from Altera & Ocyan for US$115m plus about US$8m of costs, with a final US$85m paid on 30 April. This completes the deal signed on 27 February. A transition services agreement is in place and a new operator tender is due mid-2025.

asset acquisition disposition

Neon, 75 km from Baúna, moves into the Define phase, with Contingent Resources raised: 2C up 44% to 86.5 MMbbl. Capex is staged, starting at US$7-10m. A farm-down partner is needed before a final investment decision. First oil is targeted for early 2029.

resource reserve update

Karoon signed an agreement to buy the Baúna FPSO from Altera & Ocyan for US$115m plus about US$8m of costs, closing by 30 April 2025. It expects to cut unit operating costs by US$4-6/bbl from 2026. It will be funded from cash, with US$30m already in escrow.

asset acquisition disposition

2024 underlying profit was US$214.0m, up 3%, but statutory profit fell 39% to US$127.5m, which the release attributes to lower Baúna output, a US$60.9m non-cash tax adjustment and US$15.1m for the dry Who Dat West well. Net debt was US$8.8m. 2025 FPSO efficiency target is 88-92%.

half year report

Who Dat West reached 7,147 m with no significant hydrocarbons and will be plugged and abandoned. This is a dry hole, so the 2024 campaign ends with two of three wells successful (Who Dat East and South). The JV now moves to development studies.

drilling result

The Who Dat West exploration well (MC 629-1) spudded 24 December, to about 7,150 m and roughly 50 days. Karoon holds 35%. Pre-drill prospective resource is 77 MMboe gross (21.6 MMboe net), 36% chance of success. This is the third well in the 2024 campaign.

drilling spud

Baúna was shut in on 11 December after two of the FPSO's sixteen mooring anchor chains failed. Restart is expected the week of 23 December. 2024 guidance cut to 10.1-10.3 MMboe (from 10.5-10.8), with Baúna 7.2-7.4 MMbbl and Who Dat about 2.9 MMboe.

production update

Who Dat East 2C contingent resource net to Karoon rose 191% from 5.4 to 15.7 MMboe after the appraisal well. Karoon now sees close to 50 MMboe gross at 2C and the JV is studying development concepts. This delivers the update flagged after the well.

resource reserve update

Who Dat South reached 7,014 m and found hydrocarbon zones with preliminary net pay of 98 m measured depth (67 m true vertical), versus a ~40 m pre-drill prognosis. It is the second success after Who Dat East; the well will be suspended as a potential producer. Who Dat West is next.

drilling result

Who Dat South well (MC 545-1) spudded 5 September, targeting two Miocene reservoirs to about 7,500 m, taking 50-60 days. Karoon holds 30%; pre-drill prospective resource is 31 MMboe gross (7.6 MMboe net), 52% chance of success. This follows the earlier delay to 3Q24.

drilling spud

Half-year to 30 June 2024: revenue US$409.4m, statutory profit US$61.8m (down 50%), underlying profit US$115.8m. Karoon declares its first interim dividend, 4.496 Australian cents per share, fully franked, paid 21 October 2024. This follows the new capital returns policy.

dividend declaration

1H24 results: underlying profit US$115.8m (down 20%) on weaker Baúna output; first dividend of 4.496 Australian cents (21% payout) and US$25m buyback started 12 August. SPS-88 intervention deferred to 1H25, so 2024 capex guidance is now US$150-177m with Who Dat West approved.

half year report

Karoon adopts a capital returns policy of 20-40% of underlying NPAT via dividends and/or buybacks, applied from the 1H24 results. It also launches a US$25m on-market buyback running to 31 December 2024. This resolves the long-open shareholder returns question.

capital raising announcement

Who Dat East reached 7,670 m, finding no significant extra hydrocarbons beyond 45 m total net pay, and is being suspended as a possible producer. Resource update is due late 2024/early 2025. Baúna restarted 11 June after maintenance; SPS-88 still targets 3Q24.

drilling result

Karoon priced US$350m of second-priority senior secured notes at a 10.5% coupon, maturing May 2029, below the US$400m first proposed. Proceeds repay the reserve-based lending facility. 2024 finance cost guidance rises to US$36-44m from US$27-31m.

debt financing

The Who Dat East well (Karoon 40%) began drilling on 27-28 April 2024 in about 1,300 m of water, to appraise a 2001 gas/condensate discovery. It takes 55-60 days and costs US$50-56m net. Net 2C resources are 5.4 MMboe, with a 62% chance of success.

drilling spud

Karoon proposes to offer US$400m of second-priority senior secured notes through a US subsidiary. Proceeds would mainly repay drawn amounts on the reserve-based lending facility (US$274.1m drawn at December), with the rest for general corporate purposes.

debt financing

March quarter output was 3.11 MMboe, up 18% on a full quarter of Who Dat. But 2024 production guidance is cut to 10.5-12.5 MMboe (from 11.2-13.5) on weaker Who Dat wells and gas curtailment. SPS-88 restart is now expected in Q3 2024, earlier than planned. Neon moves to Concept Select.

quarterly activities report

Joint ventures approved two Gulf of Mexico wells, Who Dat East (Karoon 40%) and Who Dat South (30%), costing US$67-77m net to Karoon. 2024 committed capex rises to US$117-134m from US$50-57m. Who Dat East is due to spud in April.

drilling scheduled

Record six-month underlying profit of US$144.7m (up 129% on the prior six months); statutory profit US$122.5m. Unit costs fell 23% to US$11.09/boe. Cash is US$170.4m with US$274.1m debt drawn (gearing 10%). Neon Concept Select decision due next month; guidance unchanged.

half year report

Guidance cut: Baúna 2024 output now 7.2-9.0 MMbbl (was 8.0-10.0), after hydrates blocked well SPS-88. A US$5-10m well intervention is assumed in Q4 2024. Total 2024 output 11.2-13.5 MMboe; unit costs US$10.5-15.0/boe. Reserves are not expected to be affected.

production update

Karoon completed the Who Dat acquisition on 21 December, paying US$684m at closing (US$720m price less US$36m deposit). Funded by a US$274m draw on a new US$340m debt facility, US$312m of equity and cash. It has received the economic benefit since 1 October 2023.

asset acquisition disposition

Retail entitlement offer closed with about 22% take-up, raising roughly A$94m including sub-underwriters' shares. About 36m unwanted shares (~A$74m) go to sub-underwriters. Total raising is about A$480m at A$2.05, completing the fully underwritten funding for the Who Dat acquisition.

capital raising announcement

The placement and institutional entitlement offer raised about A$384m at A$2.05 per share (A$170m placement, A$214m institutional), a 14.6% discount to the last close. About 95% of institutional entitlements were taken up. The retail offer opens 23 November to complete the A$480m raising.

capital raising announcement

Karoon will buy a 30% interest in the Who Dat and Dome Patrol fields in the US Gulf of Mexico from LLOG for US$720m, its entry into the region. Funding is US$171m cash, US$274m debt and a fully underwritten A$480m equity raise. It lifts CY24 production 57-63% and 2P reserves 75%.

asset acquisition disposition

Appendix 4E: FY23 revenue rose 47% to US$566.5m and net profit after tax was US$163.0m, against a US$64.4m loss in FY22. Underlying profit was US$145.9m, up 70%. No dividend was declared or paid.

annual report

Control wells lifted Neon's 2C contingent resource 9% to 60.1 MMbbl (1C up 26% to 37.7, 3C down 3% to 89.5). Neon West is assessed at 14.8 MMbbl prospective (2U). A Concept Select decision is targeted for end 1QCY24.

resource reserve update

Baúna has averaged about 33,000 bopd since the 9 May restart and should stabilise at 33,000-35,000 bopd by 1QFY24. The July maintenance shutdown is deferred to 3QFY24. FY23 production guidance is cut to 7.0-7.1 MMbbl from 7.0-7.7, and export tax guidance to US$15-19m.

production update

Baúna restarted on 9 May after the shutdown, with both FPSO trains running by 11 May. Output is above 32,000 bopd from six of seven wells, targeting a flush peak above 40,000 then a stable 33,000-35,000 bopd. FY23 guidance is unchanged from the revised 27 April figures.

production update

The Baúna shutdown is now expected to run into May 2023, contradicting the mid-April restart. If production resumes in early May, FY23 output is expected at the low end of the 7.5-9.0 MMbbl range. Unit costs are likely towards the upper end of guidance.

production update

All Baúna production, including Patola, was shut in on 28 March after a loss of containment on the FPSO's high-pressure flare, days after Patola started. Repairs finished 30 March, but the shutdown was extended for inspection and maintenance, with restart expected mid-April. FY23 guidance was kept unchanged.

production update

Chairman Bruce Phillips will retire at the AGM on 23 November 2023. Peter Botten, already a director, is made Deputy Chairman now and is intended to succeed him as chair at that AGM.

director officer appointment

PAT-1 came onstream on 27 March at over 12,000 bopd, taking Baúna above 40,000 bopd. Rates are expected to settle at about 33,000-35,000 bopd within weeks. Patola was delivered on schedule and within budget, with no material safety or environmental incidents.

production update

First Patola oil flowed from PAT-2 on 15 March 2023 at 12,000-14,000 bopd, with PAT-1 due by end-March. Output should settle at 10,000-15,000 bopd, taking Baúna above 30,000 bopd. Patola 2P reserves were upgraded 1.7 MMbbl to 16.4 MMbbl.

production update

The second Patola development well, PAT-2, reached 2,313 m and found good reservoir, with net pay in line with expectations and quality better than predicted, matching PAT-1. Drilling was within schedule and budget. First production remains targeted for Q1 CY2023 at over 10,000 bopd. The rig then moves to Neon.

drilling result

Brazil's regulator ANP approved Karoon's updated Baúna development plan and a lower royalty on incremental production: 7.5% up to 50% above the base profile and 5% beyond, versus the historical 10% on base output. It awaits gazettal and a contract amendment, and is expected to apply from October 2022.

regulatory community update

The third Baúna workover, a new pump in SPS-92, is complete, lifting that well to about 9,500 bopd from 5,500. Field output is about 22,000 bopd, up from 12,600 before the campaign. The BAN-1 workover is deferred and the rig moves to Patola, where drilling starts within days.

drilling progress report

FY22 underlying profit US$89.6m, but statutory loss US$64.5m after a US$227.1m rise in the Petrobras contingent payment, now booked at its maximum. Baúna intervention cost estimate raised to US$135-145m and Patola to US$180-205m. FY23 production guided to 7-9 MMbbl.

annual report

Karoon ends its Atlanta exclusivity agreement and withdraws its offer for a 50% interest. It could not finish due diligence and agree acceptable terms in the exclusivity period. Karoon says it will keep looking for acquisitions.

asset acquisition disposition

The Baúna intervention campaign began on 15 May 2022 at the PRA-2 well, the first of four workovers, with the Maersk Developer rig on site. It aims to add 5,000-10,000 bopd and take 4-5 months, then Patola wells and Neon control well(s).

drilling spud

Karoon establishes a US$50m accordion facility, lifting its reserve-based debt facility from US$160m to US$210m. It gives extra flexibility to fund the Neon control well(s).

debt financing

Karoon commits to drilling a Neon control well and, depending on results, a second, planned after the Patola campaign and subject to environmental licences. This resolves the early-2022 decision flagged earlier. Neon 2C resource is 55 MMbbl; the wells aim to cut uncertainty ahead of a possible FID.

drilling scheduled

Karoon signs an exclusivity agreement, valid to 31 May 2022, and submits a non-binding, incomplete offer for a 50% non-operated interest in the Atlanta oil field, Santos Basin, from Enauta. Follows its stated aim of adding a producing asset; no obligation to proceed.

asset acquisition disposition

Half-year underlying profit US$21.1m, but a statutory loss of US$97.7m after a US$183.8m pre-tax increase in the Petrobras contingent payment, as foreshadowed in January, on a higher oil price outlook. FY22 production guidance narrowed to 4.4-4.6 MMbbl; unit cost guidance cut to US$28-30/bbl.

half year report

Karoon reaches financial close on its US$160m reserve-based debt facility (Deutsche Bank, ING, Macquarie, Shell) and draws US$30m. It also buys oil hedges at about US$10m upfront cost, with US$65 puts, covering roughly 30% or less of forecast production through FY23. Karoon's first borrowing.

debt financing

Presentation of the Strategic Refresh outcomes, promised for late October. Only the opening pages (disclaimer, agenda) are visible, so the strategy details are not readable here. The quarterly report links the refresh to a sustainability strategy.

investor presentation

FY21 results: statutory profit US$4.4m, underlying US$33.4m on US$170.8m revenue at US$59.00/bbl; cash US$133.2m. FY22 guidance: 4.2-4.6 MMbbl at US$28-32/bbl unit cost. Strategic refresh outcomes are due late October 2021.

half year report

Karoon settles the Peru Z-38 dispute with partner Pitkin by paying US$9.6m in full and final settlement, without admitting liability. This is far below the possible US$100m-plus damages Pitkin flagged in May. Resolves that open threat.

joint venture update

Karoon appoints Ray Church, formerly CFO of UGL, as EVP and CFO from 27 September 2021. Scott Hosking will prepare the FY21 accounts, then step down after handover. Fills the CFO search flagged in March.

director officer appointment

Karoon appoints Antonio Guimarães, a 34-year Shell veteran, as EVP & President Karoon Brazil from 1 October 2021, reporting to CEO Fowles. Fills the Brazil head role announced in the March restructure.

director officer appointment

Karoon signs the integrated engineering, procurement, construction and installation contract with TechnipFMC for Patola's subsea equipment, tied back to the Baúna FPSO. Installation is scheduled for second half 2022, first oil targeted Q1 2023. Follows the Patola FID taken the same day.

contract award

Karoon takes FID on Patola, budget US$175-195m, funded by a new US$160m reserve-based loan plus operating cash flow. Loan requires hedging about 40% of year-one production. First oil targeted Q1 2023; with workovers, output could reach about 30 kbopd. Resolves the Patola FID thread.

drilling scheduled

Joint venture partner Pitkin, Karoon's 25% partner in Peru Block Z-38, alleges Karoon breached obligations to enter the next exploration phase and drill a second well, and flags possible damages claims above US$100m. Karoon rejects the claims and will defend. This is a new risk after the dry Marina-1 well.

regulatory community update

Karoon contracts the Maersk Developer rig, firm value about US$34m, for a four-well Baúna workover targeting 5-10 kbopd extra. Options cover Patola development and a Neon control well. Rig arrives in Brazil in first half 2022; this advances the Patola FID and Neon threads.

contract award

Karoon creates a Brazil business unit reporting to CEO Fowles and restructures executives. South America GM Tim Hosking leaves, CFO Scott Hosking will step down in H2 2021, and searches start for a Brazil president and a new CFO. Patola FID is now expected in Q2 2021.

director officer appointment

Karoon off-loads its first Baúna cargo as operator, over 500,000 barrels, for delivery to Asia. The recent oil price rally should lift forecast revenue. First sale since the 6 November closing.

production update

AGR's updated report, effective 1 July 2020, cuts Baúna 2P reserves by 4.6MMbbl mainly because the long-term oil price assumption falls to US$55 from US$65. 2C resources fall 0.9MMbbl. Patola FID is a potential Q1 2021.

resource reserve update

Karoon completes the Baúna acquisition, taking 100% and operatorship. It paid US$150m at closing from cash, on top of the US$49.9m deposit, with the rest of the US$380m firm price and up to US$285m contingent due later. Ends the long-pending deal.

asset acquisition disposition

Dr Julian Fowles, ex-Shell, Cairn, Petra Energia and Oil Search, is named CEO and Managing Director, starting after the 27 November 2020 AGM. He succeeds founder Robert Hosking, resolving the CEO search; base salary is A$750,000.

director officer appointment

ANP's board approved, with conditions, the Baúna concession transfer, the last outstanding regulatory condition once written confirmation issues. Only FPSO charter assignment remains, which Karoon doesn't expect to delay close. It is aiming to close on 30 October 2020.

material agreement

Peter Botten, former 26-year CEO of Oil Search, joins the board as a non-executive director from 1 October 2020. This adds senior oil company experience as Karoon moves into production and while the CEO search is under way.

director officer appointment

Karoon switches to successful efforts accounting, restating 30 June 2019 so exploration assets fall about A$123m and retained losses rise about A$124m. FY2020 expenses include A$73.4m for the dry Marina-1 well and an A$18.5m Peru inventory write-down. No cash flow impact.

financial restatement

Founder and Managing Director Robert Hosking will retire at the 2020 AGM after 16 years. An independent search firm has been engaged for a global search for a new CEO. He says he will stay to steer the Baúna ownership transfer.

director officer appointment

The strategic review concluded that the Southern Santos Basin strategy was best, and Karoon amended the Baúna deal. The US$665m headline price splits into US$380m firm and up to US$285m contingent on 2022-26 Brent prices. Funding now comes from cash, with no debt, replacing the ING loan structure.

material agreement

March quarter: Brent fell over 65% on COVID-19. Cash was A$504.5m with no debt. Marina-1 was dry. Baúna approvals slowed and debt size is uncertain, so the board began a strategic review due early Q3. Salaries and fees are cut 20% and spending outside Baúna is being eliminated.

quarterly activities report

Karoon says it no longer expects Baúna to complete in the March 2020 quarter, citing market conditions. IBAMA licences and ANP approval are now expected in the June quarter, and the FPSO assignment is outstanding. ING syndication is done, but oil price terms remain open. Cash is A$500m.

material agreement

AGR's update, effective 1 January 2020, raised Baúna reserves after 2019 production: 1P up 4.0 MMbbl, 2P up 1.2 MMbbl, 3P up 0.8 MMbbl. Contingent resources rose 0.7, 1.0 and 1.2 MMbbl at 1C, 2C and 3C. This updates the August 2019 assessment.

resource reserve update

Marina-1 reached 3,021m and found only thin water-bearing sands with no oil and minor gas shows in the primary targets. It will be plugged and abandoned, a dry hole for the 256 million barrel prospect. Karoon says focus returns to completing Baúna.

drilling result

Drilling of Marina-1 began in Peru's Block Z-38 (Karoon 40%, operator) with the Stena Forth, planned to take about 30 days to roughly 3,000m. It targets a 256 million barrel gross (102 million net) prospective resource.

drilling spud

Karoon contracts the Stena Forth drillship, via a well slot assigned from Tullow's rig contract, for the Marina-1 well in Peru's Block Z-38 (Karoon 40%). Drilling is planned for early Q1 2020, targeting 256 million barrels gross (102 million net) at 3,026m planned depth.

contract award

The retail offer closed with about 49% take-up, raising about A$109m at A$0.93 and taking the total raised to about A$284m. Underwriters Macquarie and RBC take the shortfall. This completes the raising begun on 23 October; management says it funds Baúna and Marina-1.

capital raising announcement

Karoon plans to refresh its board ahead of Baúna completion (Q1 2020), adding independent directors with production and development experience and possibly shrinking the board. Founder Mark Smith won't seek re-election, and Barbosa and Atkins plan to retire, likely at the 2020 AGM.

director officer appointment

Karoon launches a fully underwritten A$284m equity raising at A$0.93 a share: A$67m placement plus a 1-for-1.06 entitlement offer of about A$217m. It funds the rest of Baúna, and Marina-1. New shares equal 123.5% of those on issue. The offer is a 16.6% discount to the last price.

capital raising announcement

Karoon signs a marketing agreement of up to 5 years with Shell West to sell and ship Baúna oil. Shell West has also credit-approved terms for a US$50m reserve working capital loan, still subject to documentation. Both depend on Baúna completing.

material agreement

Karoon signs an underwritten senior secured term loan of up to US$275m with ING for Baúna, at 4% over LIBOR for up to 4 years. This firms up the earlier up-to-US$250m commitment. Completion of the acquisition is now expected in Q1 2020.

debt financing

Independent consultant AGR's report on Baúna, which Karoon is buying, covers reserves and contingent resources, with 120 million barrels already produced to end-2018 and reserves assessed to 2031. The volumes are not in the text provided. Karoon's full statement waits for completion.

resource reserve update

Presentation on Baúna: about 68 mmbbl reserves and contingent resources; US$49.9m deposit paid; price expected to fall by about US$140-200m at close. Funding is US$228m cash, up to US$250m ING loan, and an intended equity raising. Up to US$100m contingent payments if oil is high.

investor presentation

Karoon signs a binding deal to buy 100% of the Baúna field (about 20,000 barrels a day) from Petrobras for a US$665m headline price, offset by cash flows since 1 January 2019. Regulatory approval is expected in the first half of 2020. This delivers its top strategic goal.

asset acquisition disposition

Karoon confirms it is the high bidder for 100% of Petrobras's BM-S-40 concession containing the producing Baúna field. This is the long-sought production acquisition, still subject to Petrobras board and governance approval.

material agreement

Tullow's farm-out of 35% of Peru Block Z-38, announced January 2018, is complete. Tullow funds 43.75% of the first well (capped at US$27.5m at 100%) and pays US$2m now plus US$7m on a commercial discovery. Marina-1 targeted early 2020 (256 mmbbl gross).

farm in farm out completion

Chairman Bruce Phillips reports a strategy review: top priority stays buying a long-life production asset, with Neon/Goiá development second and Peru's Marina well (early 2020) kept funded. Buy-backs follow any acquisition; a further 20% corporate cost cut is targeted.

other

Bruce Phillips, founder and former CEO of AWE, is appointed independent Chairman from 1 January 2019, resolving the vacancy left by Dr Klingner's death in August. Board becomes eight directors; Phillips calls Karoon undervalued by the market.

director officer appointment

Karoon said its full-year results would include a non-cash impairment of $140 million on blocks S-M-1101 and S-M-1165, which hold Goiá. Neon is to be developed first, with its plan due before end-2018; Z-38 force majeure was lifted and Marina-1 with Tullow is planned for early 2020.

regulatory community update

Chairman Dr David Klingner, a director since 2014, died on 13 August 2018 after a short illness. The nomination committee will appoint an interim chairman and begin the search for a permanent replacement.

director officer appointment

ANP approved the Declaration of Commerciality for Echidna and Kangaroo, now named Neon and Goiá, ending the exploration phase of the Santos blocks and starting development. This is not a final investment decision, which is still expected later in 2018.

regulatory community update

Karoon cut its resource estimates: Echidna net 2C falls to 55 mmbbl (arithmetic basis 75 to 52) and Kangaroo 2C is 27 mmbbl, against 129 mmbbl combined before. Z-38 best case is over 1.3 billion bbl gross; WA-482-P is 2.8 billion bbl gross.

resource reserve update

Karoon lodged the Final Discovery Evaluation Report and Declaration of Commerciality for Echidna and Kangaroo with Brazil's ANP, ending the exploration phase on approval; FID is not decided and is now expected later in 2018. Karoon welcomed Petrobras relaunching the Baúna sale.

regulatory community update

Brazil's ANP approved removing the two-well and 3D seismic appraisal commitments on Karoon's five Santos blocks and closed the appraisal period. Karoon will now file a Declaration of Commerciality for Echidna and Kangaroo; it says this helps the tender and farm-out.

regulatory community update

Tullow Oil to take 35% of Peru Block Z-38, ending the search for a partner. Tullow funds 43.75% of the first well (capped at US$27.5m at 100%), pays US$2m on completion and US$7m on commercial discovery. Karoon falls to 40%; approvals pending.

farm in farm out agreement

Karoon won Block S-M-1537, a 171 sq km southern Santos Basin block (about 400m water depth) in ANP Bid Round 14. It will pay A$8m non-refundable bid bonus plus a A$2.5m refundable bond at December 2017 signing; Karoon says it has potential for hundreds of millions of barrels.

asset acquisition disposition

Karoon signed a framework agreement with Germany's DEA to evaluate and jointly bid for Brazilian offshore assets. DEA gets an exclusive option to buy up to 50% non-operated of Karoon's five Santos Basin blocks (including Echidna and Kangaroo), subject to due diligence and agreed terms.

farm in farm out agreement

Board approved the Echidna development concept to move into FEED: a leased floating production vessel, 2 horizontal production wells and 1 gas injection well, peak about 28,000 bbl/day. FEED costs under A$10m and finishes March 2018 quarter; FID is targeted for June 2018 quarter, with a farm-down sought before FID.

other

March quarter: cash A$390m, down from A$450m, including A$20m paid to Pacific for its 35% Santos Basin interest (now settled, Karoon 100%) and a A$23m currency effect. Echidna appraisal drilling is postponed and the Olinda Star rig released, with pre-FEED work to continue first.

quarterly activities report

Petrobras told Karoon on 30 March that the Baúna and Tartaruga Verde sales process is withdrawn, ending Karoon's exclusive negotiations. Petrobras intends to relaunch under a revised process, and Karoon says it remains committed and a relaunch could be imminent.

material agreement termination

A Brazilian court granted an interim injunction ordering Petrobras and the ANP to halt the Baúna and Tartaruga Verde sale after a challenge to the sale process. Petrobras is appealing. Karoon is assessing the effect on timing of its planned acquisition.

regulatory community update

Karoon confirmed it won the right to negotiate with Petrobras to buy 100% of the Baúna project (about 45 kbpd, producing) and 50% of Tartaruga Verde. This follows almost 12 months of bidding and continues its search for producing assets. Still subject to due diligence and approvals.

material agreement

Karoon won exploration permit EPP46, 17,793 sq km in the Ceduna Sub-Basin, Great Australian Bight. The three-year firm commitment is seismic and studies, no well, indicatively valued at A$26m. Neighbouring permits have about 9 wells committed over 24 months, which could de-risk it.

asset acquisition disposition

2016 Annual Report: Karoon expects to own 100% of Echidna and Kangaroo after buying Pacific's interest, and aims to start drilling in calendar 2017 with first oil by 2020. A partner will be sought for a minority stake. No suitable acquisition has yet been found at an acceptable price.

annual report

Karoon agreed to buy insolvent partner Pacific's 35% Santos Basin interest for up to US$20.5m: US$15.5m on completion plus US$5m contingent on first production. Completion needs Brazilian regulator and Canadian court approval. It would give Karoon 100% of Echidna and Kangaroo.

asset acquisition disposition

Luciana Rachid, with over 35 years in oil and gas including 20 at Petrobras, joins as independent non-executive director and is Karoon's first female director. Bernard Wheelahan will not stand for re-election at the 2016 AGM.

director officer appointment

Karoon issued a default notice to Pacific (35% Santos Basin partner) over an overdue payment under the joint operating agreement. The September-quarter Echidna appraisal drilling is now under review, putting the planned timetable in doubt.

debt default or forbearance

Santos Basin partner Pacific (35%) filed for creditor protection in Canada on 27 April 2016. Karoon says it has no reason to believe the Echidna work program will be affected. This puts a cloud over the partner funding the appraisal.

joint venture update

Letter to shareholders: A$523m cash at 31 Dec 2015 (A$2.12 per share), no debt, and US$200m contingent receivables. It says the share price undervalues the assets, new farm-out interest has emerged, and Karoon is also seeking low-cost production assets to acquire. This signals a possible acquisition strategy.

investor presentation

Karoon contracted the Olinda Star rig for two firm and two optional wells to appraise Echidna in the Santos Basin, drilling to start in the third quarter of 2016. This resolves the open rig contracting; first oil from an early production system could come in the first half of 2019 on success.

contract award

Echidna gets a first 2C contingent resource of 75 mmbbl (49 net). Kangaroo's 2C is revised to 54 mmbbl (35 net), well below the earlier net 88 mmbbl. Combined 129 mmbbl gross, 84 net, with a much tighter 1C-3C range. These are internal management estimates not agreed by partner Pacific Exploration and Production.

resource reserve update

Brazil's regulator approved the revised appraisal plan for the Santos Basin blocks (Karoon 65%). Firm commitments run to 31 December 2018, and Echidna appraisal drilling is expected to start in 2016. An early production system is contemplated if appraisal succeeds. This clears the way for the next phase after the 2015 discoveries.

regulatory community update

Levitt-1 reached 4,929 mRT with no hydrocarbon shows; the Legendre and North Rankin reservoirs were water-bearing. It is a dry hole in WA-482-P (Karoon 50%, carried for 90% of cost, net cost within US$5m). It resolves the 110 mmbbl net exploration test; management still sees potential elsewhere in the permit.

drilling result

Levitt-1 spudded on 4 July 2015 in WA-482-P, now operated by Quadrant Energy (ex-Apache). Karoon holds 50% and is carried for 90% of cost. Total depth is expected in early August; net best estimate is 110 mmbbl. This resolves the long-awaited spud.

drilling spud

Echidna-1 Paleocene test flowed 4,650 bopd, limited by test facilities, with 38.6 degree API oil. Karoon says reservoir quality is the best in its Brazilian acreage. The joint venture will not take the second option well; appraisal drilling is planned near term.

well test result

Echidna-1 is confirmed as an oil discovery, with a 213 m gross oil column across Paleocene and Maastrichtian reservoirs and 39.5 degree API oil. It adds to the Kangaroo field, near Karoon's Santos Basin production-hub plans. Testing begins; second option well decision due in weeks.

drilling result

Kangaroo West-1 reached 3,170 mRT and found no hydrocarbons, blamed on lack of oil charge, the known main risk. Net cost is about US$34m. The joint venture will drill Echidna-1 (65%, best 95 mmbbl net unrisked, 43% chance) as its first option well.

drilling result

Kangaroo West-1, the second firm well of the Santos Basin campaign, spudded on 26 February 2015 in block S-M-1165 (Karoon 65%). The reservoir is expected in about 3 weeks and total depth in early April. A decision on the first option well is expected in coming weeks.

drilling spud

The Kangaroo-2 up-dip sidetrack found 37 m gross of Paleocene oil with 39 degree API oil, but the Maastrichtian was water-bearing. It is in a separate pressure compartment, so the field is several accumulations. No gas cap was found. Resource size and recovery remain to be assessed; Kangaroo West-1 is next.

drilling result

Paleocene testing of Kangaroo-2 reached a maximum 3,700 stb/d (stabilised 3,450 stb/d), adding to the Maastrichtian result. Karoon repeats a vertical well could make 6,000-8,000 stb/d. Two sidetracks, down-dip and up-dip, will now be drilled to refine resource size.

well test result

Kangaroo-2 production test flowed oil at a maximum 3,700 stb/d (stabilised 3,300 stb/d) from the Maastrichtian reservoirs. Karoon expects a vertical production well could produce 6,000-8,000 stb/d. Paleocene tests are due within about a week, and a sidetrack decision follows.

well test result

Dr David Klingner, a former Rio Tinto executive with 38 years there, became independent Chairman on 19 December 2014. Robert Hosking, founder, moves from Executive Chairman to Managing Director. This fulfils the independent Chair promised for December in the October letter.

director officer appointment

Kangaroo-2 found a 250 m gross oil column (135 m net pay) across five reservoirs, with 40 degree API oil recovered. No gas cap was found, and shallower oil-water contacts in some sands are being assessed for effect on the contingent resource. Production testing follows.

drilling result

Kangaroo-2 appraisal well spudded 5 November 2014 in block S-M-1165 (Karoon 65%), reaching the reservoir in about 3 weeks and total depth in December. It tests the size of the oil column at the Kangaroo discovery. Kangaroo West-1 follows.

drilling spud

Karoon expects to start its 2-4 well Santos Basin campaign in the second week of November 2014, once the Olinda Star rig is handed over in 2-3 weeks. Kangaroo-2 appraisal comes first, then Kangaroo West-1 (net best 330 mmbbl). Karoon holds 65%.

drilling scheduled

The board urged shareholders to vote against three nominees from Pegasus, which manages a 2.4% stake and also seeks to remove director Geoff Atkins, at the 27 October 2014 AGM. It says the Chair search is shortlisted. First public sign of a board contest.

agm notice

Karoon will separate the Executive Chairman role: Robert Hosking will become Managing Director once an independent non-executive Chair is found, targeted before 30 June 2015. A Risk and Governance Committee chaired by Peter Turnbull was also set up.

director officer appointment

The sale of Karoon's 40% of Browse permits WA-315-P and WA-398-P to Origin completed, with US$600m received. Up to US$200m of deferred payments remain contingent on FID and first production, plus Pharos-1 cost reimbursement. Resolves the pending sale.

asset acquisition disposition

Pharos-1, the sixth and final Browse well, hit total depth of 5,220 mRT. Logs indicate a gas-charged Montara sandstone with 53 m gross and 34 m net pay, extending the Proteus discovery. A flow test is due within weeks. Origin bears costs under its pending purchase.

drilling result

Karoon contracted the Olinda Star rig for up to four Santos Basin wells: two firm (Kangaroo-2 appraisal, Kangaroo West-1) and two options. Drilling is expected to start September 2014, resolving the open rig contract thread.

contract award

Joint venture pre-emption rights over the Browse sale to Origin expired, clearing the way for the deal, which still needs regulatory approval and is expected to complete in Q3 2014. The US$100m NAB bridge facility is now signed.

joint venture update

Karoon agreed to sell its 40% of Browse permits WA-315-P and WA-398-P to Origin for up to US$800m: US$600m cash at completion, US$75m at FID, US$75m and up to US$50m at first production. Origin also covers Pharos-1 costs. Completion expected Q3 2014; resolves the funding suspension.

asset acquisition disposition

Poseidon North-1 reached 5,288 mRT and interpreted a 12 m net Jurassic gas sand, but pressure data is inconclusive and mobile gas is unconfirmed. The well is being plugged and abandoned. The sixth well, Pharos-1 in WA-398-P, is approved.

drilling result

Karoon farmed out 50% of WA-482-P to Apache, which will pay US$9.04m for seismic costs, fund 90% of one well capped at US$63m, take over as operator and drill in the first half of 2015. This is the first completed farm-out in the process under way since late 2013.

farm in farm out agreement

Karoon's shares were suspended at its own request on 5 May 2014, pending an announcement about its funding position. The company says it is in talks with stakeholders and potential new investors, and expects to update by 12 May.

listing compliance notice

Independent certification by DeGolyer and MacNaughton gives Karoon net unrisked prospective resource, best case, of 4.5 Tcf wet gas (Browse) and 4.2 bn bbl oil (WA-482-P, Peru Z-38 and Block 144). WA-482-P drilling is planned for 2015 and Peru Z-38 drilling to start in 2015.

resource reserve update

Grace-1 found no significant hydrocarbons. The volcanic zone of interest was water bearing and the well will be plugged and abandoned. It ends the Browse run of gas discoveries: Karoon holds 90% of WA-314-P. Poseidon North-1 is next.

drilling result

Brazil's regulator approved Karoon's appraisal plan for its Santos blocks, the final hurdle before contracting a rig. Firm 2014 commitments are Kangaroo-2 and Kangaroo West-1 wells. Some acreage was relinquished. Block retention is secured. This resolves the pending approval.

regulatory community update

Brazil's regulator cleared Karoon to take its 20% interest in Block S-M-1352 (Maruja oil field), operated by Petrobras, under the August 2010 farm-in. Maruja-1 flowed 4,675 bbl/d of oil in 2010. Petrobras is resuming assessment. This resolves the pending approval.

farm in farm out completion

Brazil's regulator approved the transfer of a 35% interest in four Santos Basin blocks to Pacific Rubiales, completing the farm-in announced in September 2012. Pacific Rubiales now holds 35% of Kangaroo and must fund its share going forward. Karoon retains 65%. Approval for S-M-1066 is expected soon.

farm in farm out completion

Grace-1, the fourth well of the Browse campaign, spudded on 3 October in WA-314-P, where Karoon holds 90%. It targets multi-tcf potential in the Plover and Montara formations, about 35 km north of Poseidon. The campaign now runs through 2014.

drilling spud

Karoon submitted a Brazil appraisal plan to the regulator: firm wells Kangaroo-2 and Kangaroo West-1, plus up to four contingent wells, targeting early 2014. Kangaroo is the priority, with first oil possible by 2018. Bilby is poorer quality and needs more study. Karoon aims to farm down 10-20%.

joint venture update

Proteus-1ST2 flowed condensate-bearing gas at up to 7.3 MMscf/d, constrained for hole stability, with condensate of 19-22 bbl/MMscf, the highest yet in the Poseidon campaign. Karoon says future production wells could exceed 100 MMscf/d. This confirms the August discovery.

flow test result

Proteus-1ST2 reached 5250 m, and logging indicated multiple gas-charged Jurassic reservoirs, including an 87 m gross interval with high net pay. A production test was planned over the coming weeks, adding to earlier campaign gas discoveries at Boreas-1, Kronos-1 and Zephyros-1.

drilling result

Karoon completed the underwritten placement of about A$150m at A$5.10 per share, an 8.9% discount to A$5.60. Cash is now stated at A$320m with no debt. Farm-out talks continue, and a share purchase plan follows.

capital raising announcement

Karoon launched an underwritten placement of about A$150m at A$5.10, an 8.9% discount to A$5.60. Proceeds are for farmout negotiations, rig and long-lead items, and Browse, Santos and Peru drilling. A share purchase plan will follow. No shareholder approval needed.

capital raising announcement

Kangaroo contingent resource was raised to 11 million barrels (1C), 135 million (2C) and 487 million (3C), from 2/73/337. New core and fluid data extended the oil column from 25 m to 76 m. Karoon is seeking a rig for Kangaroo-2, Bilby-2 and Kangaroo West-1.

resource reserve update

Peru approved the environmental study for Block Z-38, allowing up to 10 exploration and 10 appraisal wells. At least two wells are planned, starting late in the first half of 2014, and Karoon is discussing farming down its 75%. This clears a key permitting step.

regulatory community update

Karoon completed its three-well Santos Basin campaign, with Bilby-1 finishing at 4,416 m and no further zones found. Two oil discoveries (Kangaroo-1, Bilby-1) from three wells, net cost about A$30m after Pacific Rubiales. Karoon is now seeking a rig for multi-well appraisal.

drilling result

Bilby-1's proven oil column grew to 320 m, with a potential gross column of about 560 m and roughly 70 m of net oil-bearing reservoir. Oil sampled is 33 degree API. Drilling continues to 4573 m after wireline testing.

drilling result

Bilby-1 found oil in Maastrichtian-age sands, confirmed over 200 m gross so far. This is Karoon's second Santos Basin oil discovery after Kangaroo-1. The well continues to 4573 m, and a rig for Kangaroo-2 and a Bilby follow-up is expected in the fourth quarter.

drilling result

Karoon booked a Kangaroo contingent resource of 2 million barrels (1C), 73 million (2C) and 337 million (3C), after post-drill seismic showed over 600 m of updip potential. Kangaroo-2 appraisal could lift the 1C figure.

resource reserve update

Bilby-1, the third and final Santos Basin well, spudded on 7 April 2013 in block S-M-1166, targeting Santonian, Campanian and Eocene levels. It runs into May and completes minimum work commitments. Karoon is still seeking a rig for Kangaroo-2.

drilling spud

Karoon will not use its pre-emptive right over ConocoPhillips' sale of 20% of Browse permits WA-315-P and WA-398-P to PetroChina, clearing PetroChina's entry. The joint venture also extended the Transocean Legend rig contract to six firm wells; Proteus-1 was at 2913 m.

asset acquisition disposition

Pacific Rubiales exercised its option for a 35% interest in Santos Basin block S-M-1166 (Bilby). It will fund the first US$70m of Bilby-1 costs, then 35% thereafter, taking its total well carry to US$210m. Still subject to ANP approval.

farm in farm out agreement

Emu-1 reached 4381 m and found good reservoirs, but the main ones are water-bearing at this location, with only possible thin hydrocarbon sands. This is a disappointment after the Kangaroo-1 oil find. A discovery notification is being filed with ANP, and Bilby-1 is next.

drilling result

Zephyros-1 reached 5372 m and found gas-bearing Plover sands similar to Kronos-1, with good quality and high mobility. The joint venture will not run a production test, as the results resemble Kronos-1. The rig moves to Proteus-1.

drilling result

ConocoPhillips agreed to sell PetroChina a 20% interest in the Browse permits WA-315-P and WA-398-P (including Poseidon). Karoon has pre-emptive rights over that 20%, lapsing at the start of April, and is assessing its position.

asset acquisition disposition

Kangaroo-1 wireline work confirms a 25 m gross oil column of 42 degree API oil, with good reservoir quality (25-32% porosity). Mapping suggests a column over 300 m up-dip. No flow test will be run at this down-dip spot; Karoon is seeking a rig for a Kangaroo-2 appraisal well.

drilling result

Kangaroo-1, Karoon's first Santos Basin well, found light oil: a 25 m gross column in Eocene rocks at 3049 m, not the primary target. The well hit it 300 m down dip, and the whole trap could hold about 350 m. Testing decision follows logging.

drilling result

Kangaroo-1, Karoon's first Santos Basin well, spudded on 28 December 2012 and had reached 915 m by 30 December. Results are expected into February 2013. This starts the three-well Brazil campaign, with Pacific Rubiales' 35% farm-in still awaiting ANP approval.

drilling spud

Boreas-1 flowed a sustained, equipment-limited 30 MMscf/d with a condensate ratio of 18 bbl/MMscf, nearly double Kronos-1, and 16% CO2. Karoon believes adjacent production wells could flow above 100 MMscf/d. Zephyros-1 is next.

flow test result

Boreas-1 flowed gas at up to 30.2 MMscf/d during clean-up, limited by surface equipment, from a 70 m interval in the Plover formation. Testing continues for about five days. Karoon calls the initial flows encouraging.

flow test result

D&M estimates Karoon's South American net Pg-adjusted mean prospective resources at 561m barrels, down from 589m in 2010 despite a higher gross figure of 812m. The fall largely reflects the 35% Santos Basin farm-out. This long-awaited reassessment excludes the two pre-salt prospects and Maruja.

resource reserve update

Boreas-1 logs indicate net gas pay sands with good reservoir properties, backed by pressure measurements and gas samples recovered by wireline. Production testing is being prepared once the production liner is installed. This firms up the earlier hydrocarbon indications.

drilling result

Karoon agreed to acquire 100% of North Carnarvon Basin permit WA-482-P from Liberty, funding at least A$16.5m of seismic work over two years. It can withdraw before the Year 3 well commitment. Four prospects are estimated at 0.5 to 3 tcf each.

farm in farm out agreement

Pacific Rubiales will take 35% of four Santos Basin blocks (option on a fifth), paying US$40m cash and carrying up to US$210m of well costs. This completes the long-negotiated Brazil farmout. It is subject to ANP approval; Karoon remains operator through the three-well campaign.

farm in farm out agreement

Boreas-1 intersected its primary reservoir target, with drilling signs pointing to a potential gas-bearing sand. Coring is starting; wireline logging will follow, and production testing only if the logs confirm hydrocarbons. This ends the long wait after the earlier equipment delays, but flow is unproven.

drilling result

Boreas-1 spudded on 5 April 2012, starting the Browse Phase-2 campaign of at least five wells that is expected to run through 2013. It targets a fault block about 4 km south of Poseidon-1; Karoon will give fortnightly progress reports.

drilling spud

Karoon appointed Jose Coutinho Barbosa, former Petrobras president and CEO, as a director to strengthen its Brazil presence ahead of its largest drilling campaign. He holds 300,000 options at A$11.50 expiring November 2013. He was already listed as Chief Brazilian Advisor.

director officer appointment

Karoon, as operator with 66.67% (Talisman 33.33%), applied to surrender Timor Sea permit AC/P8 immediately, as no drilling target met the joint venture's economic and chance-of-success criteria. This ends the CSEM survey work on the permit.

asset acquisition disposition

Karoon retained Executive Chairman Robert Hosking under new employment agreements: A$500,000 base salary plus options subject to shareholder approval, and six months' notice. Company cites a planned minimum of ten wells over two years across Australia, Brazil and Peru.

director officer appointment

The Browse joint venture signed for the Transocean Legend rig: five firm wells plus options for three more, starting Q4 2011 with Boreas-1 in WA-315-P. ConocoPhillips funds 80% of the first US$125m in WA-315-P. Karoon says it is farming out Santos and Peru assets.

contract award

Karoon signed the final drilling contract for the Blackford Dolphin rig to drill three wells on its wholly owned Santos Basin blocks in Brazil from the first half of 2012. This firms up the May letter of intent.

contract award

Karoon signed final binding documents to take an extra 50% of WA-314-P from ConocoPhillips for nil cash, completing the deal agreed in November 2010 and lifting it to 90%. ConocoPhillips can buy back 10% after the well. Formal transfer still needs regulatory registration.

farm in farm out completion

The Browse joint venture received the federal environmental approval to drill, resolving the 'Controlled Action' delay raised in January. Drilling of five to eight wells is expected to start in Q4 2011 and run 18 months to two years.

regulatory community update

Maruja-2 appraisal (a deviated well to 2,530m and a sidetrack to 2,389m) found excellent reservoir sands but they were water-bearing at this location. The oil column in the up-dip part remains undefined. Karoon's 20% still awaits ANP approval; a view on remaining potential is promised.

drilling result

Karoon clarified press reports: the government declared the Browse drilling a 'Controlled Action' needing more detailed environmental assessment, which could delay the five-to-eight well program. The joint venture has asked for reconsideration and still prepares to drill in the first or second quarter of 2011.

regulatory community update

Maruja-1 testing finished: Petrobras reached an equipment-constrained 6,142 barrels a day of oil, and a 24-hour stable flow of 4,675 barrels a day (38 API). Well drilled to 3,789m. Confirms the November discovery flows commercially-scale oil; Karoon's 20% still awaits ANP approval.

well test result

Karoon agreed to take a further 50% of Browse permit WA-314-P from ConocoPhillips for no cash, lifting its interest from 40% to 90%. Karoon sees over 10 tcf potential; the Grace prospect has 3.3 tcf. ConocoPhillips can buy back 10% after the commitment well.

farm in farm out agreement

Karoon dropped the Brazil IPO for now, citing unfavourable markets and weak performance of recent Brazilian oil and gas raisings. It will wait for conditions to improve. Ends the plan to list 31.9% of its South American assets, announced in June.

capital raising announcement

Petrobras announced a light oil discovery at Maruja-1 in Brazil's Santos Basin, with reservoirs at 2,200m in 400m of water; drilling continues deeper. Karoon's first South American discovery; its 20% interest remains subject to ANP approval. Resolves the Maruja thread positively.

drilling result

Karoon's Brazilian subsidiary filed a preliminary prospectus for a Brazilian IPO of 31.9% (1.03m shares, expected US$621-773m, all new shares); Karoon would keep 68.1%. Pricing is expected 10 November. Australian shareholders cannot participate directly, and Karoon may still not proceed.

capital raising announcement

Karoon completed its institutional placement: 26.6m shares at A$7.00 to raise A$186.4m, for Browse appraisal, Brazil and Peru exploration and working capital. Resolves the 15 Sep raising; a share purchase plan for existing holders will follow.

capital raising announcement

Karoon announced an institutional share placement, lead-managed by Merrill Lynch, to fund Browse appraisal, Brazil and Peru exploration and working capital. Size and price are not stated. A share purchase plan for existing holders will follow; shares are in a trading halt.

capital raising announcement

The Quasi well in Brazil reached 2,011m and found no commercial hydrocarbons; it will be plugged and abandoned. Karoon estimates its net cost at about US$6.5m. The lower-risk Maruja prospect is next, due to start in September.

drilling result

Karoon Brazil filed a draft prospectus with Brazil's securities regulator, the first step toward an IPO on BM&FBOVESPA. Karoon expects to keep about 70-75% and listing is possible in Q4, though not committed. Updated D&M risked prospective resources are 589m bbl.

capital raising announcement

Karoon signed a farm-in with Petrobras for 20% of two Santos Basin blocks (Maruja and Quasi prospects), subject to approvals, by funding 35% of the Maruja well. Drilling has begun at Quasi, Maruja is due in September, and results are expected by end-2010.

farm in farm out agreement

Karoon is assessing a separate listing of its Brazilian and Peruvian assets, probably on Bovespa, because it believes the market undervalues them. A D&M report puts risked net prospective resources at 577m boe. It plans to list 30% and keep a majority; no decision made.

material agreement

Kronos-1 testing finished, confirming an equipment-constrained 26 MMscf/d, with condensate-gas ratio 9.5 bbl/MMscf and 10% CO2. Karoon believes adjacent production wells could flow above 100 MMscf/d. This resolves the pending Kronos-1 result; resource revision still awaits independent assessment.

well test result

Kronos-1 flowed gas at a maximum 26 MMscf/d during clean-up, limited by surface equipment. Pressure data indicates a separate gas accumulation from Poseidon-1, with a gas-water contact potentially over 200m deeper. The campaign ends with this well; drilling resumes in Q1 2011.

flow test result

Kronos-1 was spudded on 19 Feb 2010 on the Transocean Legend, 15 km from Poseidon-1, with planned depth 5,322 mRT. It targets Plover reservoirs high on the structure to define possible production rates. Karoon holds 40%, ConocoPhillips operates.

drilling spud

Poseidon-2's Plover B retest flowed gas at only 850 scf/d, and the Montara test likely never connected to the reservoir. Karoon says higher rates are achievable and the 7 tcf P50 estimate is unlikely to change materially. The well will be plugged; Kronos-1 is next.

well test result

The first Poseidon-2 Plover test most likely failed, with no connection between the well and the reservoir. A retest of 5,035-5,100 mRT is planned; core permeability suggests the reservoir should flow gas. Two further Legend rig options are unavailable, so Kronos-1 then Lion-1 will be drilled and a higher-capacity rig sourced.

well test result

Poseidon-2 found about 20m gross of hydrocarbon-bearing Montara reservoir and a thicker Plover section with all three Poseidon-1 reservoir intervals, about 60m cored. Hydrocarbons are indicated above the gas-water contact but unconfirmed until wireline logs are run. The 3D survey is about 55% done.

drilling result

DeGolyer and MacNaughton certified Karoon's net high-case contingent resources at 7.6 tcf (1.27bn boe) and risked net mean prospective resources at 900m boe. This compares with 1.23bn boe prospective in September 2008. Poseidon-2 results are not included.

resource reserve update

ConocoPhillips exercised its option for another 9% of WA-314-P and WA-315-P, lifting it to 60% and cutting Karoon to 40%. ConocoPhillips will pay 80% of the next US$125m of joint venture spending in those permits. This completes the option noted earlier.

farm in farm out completion

Karoon secured a further 15% of Peru Block Z-38, on top of the 40% option exercised in August, giving 75% post farm-in once work commitments and approvals are complete. It will fund the third-period work, including two wells, with drilling expected late 2010 or early 2011.

farm in farm out agreement

Poseidon-2 appraisal well spudded on 10 October in WA-398-P, where Karoon holds 40%. It tests reservoirs down-dip from Poseidon-1, to a planned depth of about 5,300 mRT, and is drilling at 1,474 mRT.

drilling spud

The Browse program expands to at least four wells: Poseidon-2 appraisal, then Lion-1 (under 10% chance of success) and Kronos-1. A 3D seismic survey over 2,000 sq km was awarded to CGGVeritas, starting October. Karoon keeps its 3/7/15 tcf Poseidon range.

drilling scheduled

Kontiki-1 reached 4,600 mRT with no further sands. Data show some gas in poor-quality reservoir sands, and the well will be plugged and abandoned. The rig moves to Poseidon-2. This is a disappointing result after Poseidon-1, against Karoon's 7 tcf P50 prospective estimate.

drilling result

Karoon and ConocoPhillips exercised the option for two more wells on the Legend rig, making the firm program four wells including Kontiki-1. A further four wells are available by mutual agreement. This extends the Browse drilling campaign.

contract award

Kontiki-1 was spudded on 22 July in WA-314-P, the second well of the Browse program, with a planned depth of 4,610 mRT. It targets Jurassic sandstones in a structure separate from Poseidon and will be plugged and abandoned after evaluation.

drilling spud

Karoon completed a placement of 22.33m shares at A$6.70 each, raising A$149.6m for Browse exploration and appraisal and the Peru and Brazil programs. This is the first raise since the A$49m placement in August 2008, and dilutes existing holders.

capital raising announcement

ConocoPhillips has secured the Transocean Legend rig to resume Browse drilling from July 2009, replacing the suspended Sedco-703. The contract covers Kontiki-1 plus one more well, with an option for two more, allowing Poseidon appraisal to begin.

contract award

Poseidon-1 will be plugged and abandoned as a significant gas discovery: 317m gross gas-bearing Plover, three sands totalling 228m. Flow tests were impossible after a mechanical failure plugged the well. Karoon says the contingent resource is likely consistent with or above its pre-drill P50 7 tcf.

drilling result

Wireline pressure data over a 56m interval confirmed a gas column in the lower sand, now measured at 139m gross. A logging tool then became stuck and two gas samples were not recovered. A gas flow test is planned after fishing the tool.

drilling progress report

Three thick sands, of 10m, 67m and 114m+, have been found in a 278m Plover interval and are interpreted to contain hydrocarbons, based on mud logs and logging-while-drilling data. Wireline logging is needed to confirm. This is the most encouraging Poseidon-1 news so far.

drilling progress report

Poseidon-1 spudded on 26 January 2009 in WA-315-P, the first well of the Browse campaign. It was drilling ahead at 1,055m toward a planned 4,800m. This resolves the long-delayed start of drilling. Karoon holds 49%.

drilling spud

DeGolyer and McNaughton, an independent consultant, report mean risked prospective resources of 1.23 billion barrels of oil equivalent across Karoon's 19 prospects in Australia and South America. These are undiscovered, with no certainty any will be found. Browse drilling is expected from Q4 2008 or Q1 2009.

resource reserve update

The Sedco 703 rig is now expected to start Browse drilling in late Q4 2008, running to mid Q1 2009, a slip from the earlier Q3 2008. Three wells satisfy permit commitments; Karoon funds 20% of the two WA-314/315-P wells and 40% of the WA-398-P well.

drilling scheduled

Karoon agreed a placement of 14 million shares at $3.50 to raise $49m, subject to shareholder approval, lifting shares to about 146 million. Funds are for the Browse drilling and the Peru and Brazil exploration programs.

capital raising announcement

Karoon signed a farm-in with Vamex (Pitkin Petroleum subsidiary) for Block Z38, offshore Tumbes Basin, Peru. It earns 20% by funding a 2,000 km 2D seismic survey, with an option for a further 40% via 670 sq km of 3D. Subject to regulatory approvals; its second new country after Brazil.

farm in farm out agreement

Karoon won five offshore Santos Basin exploration blocks in Brazil (850 sq km), its first move outside Australia. It must pay US$25m in signature bonuses and refundable bid bonds in March 2008; funding is from its own cash or possibly a farm-out.

asset acquisition disposition

Karoon completed a placement of 14.8 million shares at $3.45, raising $51.06m and lifting shares on issue to about 129 million. Directors also sold 1.875 million shares to fund exercising 2.25 million options. The earlier $2.20 placement is now well below market.

capital raising announcement

Karoon agreed to buy Woodside's 66.67% of Timor Sea permit AC/P8 for A$1m, conditional on partner Talisman's approval and a five-year permit extension. The permit holds two prospects and at least three leads, taking Karoon beyond Browse.

asset acquisition disposition

Karoon and ConocoPhillips signed the Sedco 703 semi-submersible rig for 200–225 days, with drilling expected from Q3 2008 for three Browse wells. Well deadlines were extended 12 months, to 11 February 2009 (WA-314/315-P) and 30 April 2009 (WA-398-P). This resolves the open rig search but pushes drilling later.

contract award

Permit WA-398-P, south of and contiguous with the existing Browse permits, was granted to Karoon (40%) and ConocoPhillips (60%) for six years from 1 May 2007. Year 1 commits one well and a 1400 sq km 3D survey. This follows the offer noted in the May presentation.

regulatory community update

Karoon proposes a placement of 19 million shares at $2.20 to raise $41.8m, to fund Browse Basin exploration commitments and working capital. Talbot Group takes 12 million shares. It needs shareholder approval at a general meeting proposed for 15 June 2007.

capital raising announcement

The regulator granted the Browse joint venture a 12-month extension: Year 3 work now runs to 11 February 2008, and the permit terms extend to 11 February 2011. This gives more time to secure a rig and drill the two wells.

regulatory community update

Karoon cancelled the third Gippsland well, Raniformis-1, because the Rintouls Creek Sandstone had very low permeability and an uncertain distribution. It also said Browse seismic supported over 20 tcf of risked potential, and that a 10 tcf discovery might yield about 100 million barrels of condensate and LPG.

drilling result

Megascolides-2 reached 2130m total depth with no commercially significant hydrocarbon shows, including in deeper reservoirs, and will be plugged and abandoned. A second dry hole for the Gippsland program.

drilling result

The Megascolides-1 sidetrack showed good oil staining but very low permeability, so it is being plugged and abandoned. This is a disappointing result for the follow-up to the 2004 oil zone. Megascolides-2 is next, with potential for 2.5 million barrels.

drilling result

Karoon spudded the first of three Gippsland wells on 13 December 2006 on the 100%-owned PEP 162. It is a re-entry and sidetrack of Megascolides-1, which in 2004 found a ten-metre oil-bearing zone that was never flow tested.

drilling spud

Karoon places 12.186 million shares at $1.80 to institutional and sophisticated investors, raising $21.935m, with much of it from the UK. Funds go to its share of the two Browse wells, extended Gippsland drilling and working capital, so more shares are on issue.

capital raising announcement

Karoon farms out up to 60% of Browse permits WA-314-P and WA-315-P to ConocoPhillips: 51% for US$9.6m reimbursement plus 80% of the third-year program, with one well per permit estimated at US$60–80m. ConocoPhillips can earn a further 9% by funding 80% of the next US$125m. This resolves the long-running farm-out search.

farm in farm out agreement