Slides
Page 1
2025 Half Year Results 27 August 2025 For personal use only
Page 2
Disclaimer This presentation has been prepared by Karoon Energy Ltd (Karoon or the Company). The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. This presentation contains summary information about the Company and its activities that is current as at the date of this presentation and remains subject to change without notice. This presentation should be read in conjunction with Karoon's other periodic and continuous disclosure announcements released to the Australian Securities Exchange which are available at: https://www.asx.com.au/markets/company/kar This presentation does not, and does not purport to, contain all information necessary to make an investment decision in relation to Karoon. Accordingly, the information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. The presentation has been prepared without taking into account the investment objectives, financial situation or other particular needs of any particular person. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Karoon, its directors, employees, representatives or agents (together, the Limited Parties), nor any other person accepts liability, including without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. This presentation is not a prospectus, product disclosure statement or other disclosure or offering document, and it has not been lodged with ASIC or the regulatory authority of any foreign jurisdiction. An investment in the Company is subject to investment and other known and unknown risks, some of which are beyond the control of Karoon. Karoon does not guarantee any particular rate of return or performance, nor does it guarantee the repayment of capital from the Company or any particular tax treatment. Before making an investment decision, you should consider, with or without the assistance of a financial or other independent professional adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. The distribution of this presentation in jurisdictions outside Australia may be restricted by law. Any recipient of this presentation outside Australia must seek advice on and observe any such restrictions. By attending an investor presentation or briefing, or accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in the "Disclaimer" section of this presentation. Certain figures, amounts, estimates and numbers are subject to the effect of rounding. Accordingly, the actual calculations of these figures, amounts, estimates and numbers may differ from those set out in this presentation. Forward looking statements This presentation may contain certain ‘forward‐looking statements’ with respect to the financial condition, results of operations and business of Karoon and certain plans and objectives of the management of Karoon. Forward looking statements can generally be identified by words such as ‘may’, ‘could’, ‘believes’, 'plan', 'will', 'likely', ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties, which may include, but are not limited to, the outcome and effects of the subject matter of this presentation. Indications of, and guidance on, future exchange rates, capital expenditure, earnings and financial position and performance are also forward‐looking statements. You are cautioned not to place undue reliance on forward looking statements as actual outcomes may differ materially from forward-looking statements. Any forward‐looking statements, opinions and estimates provided in this presentation necessarily involve uncertainties, assumptions, contingencies and other factors, and unknown risks may arise, many of which are outside the control of Karoon. The actual results, achievement or performance of Karoon may be materially different from any future results, achievement or performance expressed or implied by such forward looking statements. Forward‐looking statements including, without limitation, guidance on future plans, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Such forward looking statements speak only as of the date of this presentation. To the maximum extent permitted by law, Karoon disclaims any intent or obligation to update publicly any forward‐looking statements, whether as a result of new information, future events or results or otherwise. Guidance for the 12 months to 31 December 2025 is uncertain and subject to change. Guidance has been estimated on the basis of various risks and assumptions, including those “Key Risks” set out in Karoon’s 2024 Annual Report. References to future activities development, appraisal and exploration projects are subject to approvals such as government approvals, joint venture approvals and Karoon approvals. Karoon expresses no view as to whether all required approvals will be obtained. Reserves disclosure Reserves and Resources estimates are prepared in accordance with the guidelines of the Petroleum Resources Management System (SPE-PRMS) 2018 jointly published by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), and American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE). Unless otherwise stated, all petroleum resource estimates are quoted as at the effective date (i.e. 31 December 2024) of the Reserves and Resources Statement included in Karoon’s 2024 Annual Report. Oil and gas Reserves and Resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly due to new information or when new techniques become available. Additionally, by their nature, reserves and resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further data becomes available through for instance production, the estimates are likely to change. This may result in alterations to production plans, which may in turn, impact the Company’s operations. Reserves and resource estimates are by nature forward looking statements and are the subject of the same risks as other forward-looking statements. Resource volumetric estimates in MMboe have been rounded to one decimal place. Gas volumes are converted to barrels of oil equivalent (boe) on the basis of 6,000 scf = 1 boe Karoon is not aware of any new information or data that materially affects the information included in the Reserves and Resources Update. All the material assumptions and technical parameters underpinning the estimates in the Reserves and Resources Update continue to apply and have not materially changed. Authorisation This presentation has been authorised for release by the Board of Karoon Energy Ltd. 2 For personal use only
Page 3
2025 Half Year Highlights Julian Fowles CEO and Managing Director For personal use only
Page 4
2025 Half Year Highlights Production up, oil sales/prices down Higher production and reserves, ongoing share buyback, progressing organic developments 4 Improving safety performance Production +4% on 1H24 2025 production guidance revised to 9.7 – 10.5 MMboe 1 Underlying EBITDAX 2 US$201m (-25% on 1H24) Underlying NPAT 2 US$45m (-61% on 1H24 ) Organic growth opportunities Neon 2C resource up 44% 4, entered Define Phase in April 2025 30 – 50% Neon farm down process commenced Neon FID targeted for 2H26 5 Who Dat E6ST to commence in late 3Q25 Who Dat East entered Define Phase, FID targeted in late 2025/early 2026 5 New Baúna FPSO operating model Baúna FPSO acquisition completed Karoon to operate FPSO (subject to regulatory approvals), with support from maintenance / other service providers 13.7 MMbbl 3 2P Reserves net increase from Baúna Project revisions and asset life extension Balance Sheet deployed Liquidity used to fund FPSO acquisition, SPS-88 intervention, flotel costs, capital returns, buyback Interim dividend 2.4 Aus cents/share (unfranked) Bought back ~9% of issued capital since Aug 24 Net debt US$237.9m at 30 Jun 25 (US$8.8m at 31 Dec 24), liquidity US$452.1m 1. Refer to slide 12 and ASX Release dated 25.8.25 “SPS-92 downhole pump issue and updated guidance”. 2. Refer to slide 26-27 for definitions of Underlying NPAT, EBITDAX and Free Cash Flow from operations. Underlying NPAT and EBITDAX reflects Karoon’s assessment of financial performance and is presented to provide further insight into its performance. 3. Refer to the ASX Release dated 27.08.25 ‘Baúna Project Reserves Upgraded’. Karoon is not aware of any new information or data that materially affects these estimates and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. 4. Refer to the ASX Release dated 16.04.25 ‘Neon enters Define phase’. Karoon is not aware of any new information or data that materially affects these estimates and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. 5. Subject to viable economics with IRR in excess of hurdle rates and Board approval. For personal use only
Page 5
0.85 -- 0.77 0.28 -- 0.25 0.50 0.75 1.00 2022 2023 2024 1H25 Number of injuries pe 200,000 hours No injuries in CY23 2025 TRIR target of 0.4 Health, Safety, Security and Environment Improvement in Baúna safety performance Improvement in Baúna lost time injury rate and process safety events in 1H25 compared to 1H24, despite higher work activity levels: Nil Lost Time Injuries and one Restricted Work Case No Tier 1 or 2 process safety events (one in 1H 2024) Four high potential incidents (down from five in 2H 2024) Continuing focus on Karoon’s fatality prevention Golden Safety Rules program, hazard awareness training, and ‘First 100 Days’ safety improvement plan, updated and extended in 3Q25 Environmental performance - no reportable spills 127,997 tCO2e of Karoon’s 2024 Scope 1 emissions2 offset with various carbon units and credits Emission intensity in 1H25 decreased reflecting improved operational reliability at Baúna Project 1. Does not include data relating to the Who Dat, Dome Patrol and Abilene fields in the US, which are operated by LLOG. 2. See 2024 Sustainability Report and glossary on slides 26 – 27 for details and definitions. Total Recordable Injury Rate 1 Lost Time Injuries and high potential incidents 1 -- 1 9 4 4 -- 2 -- -- 2 4 6 8 10 2022 2023 2024 1H25 High potential incidents Lost Time Injuries (LTI) Karoon Scope 1 & 2 emissions intensity (kgCO 2e/boe) 21.3 23.8 16.8 11.3 12.5 11.5 10.7 0 5 10 15 20 25 30 Jun 22 31 Dec 22 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 5 For personal use only
Page 6
Financial Results Ray Church EVP and CFO For personal use only
Page 7
2025 First Half Financial Summary 1 Liquidity applied to Baúna FPSO, SPS -88, final major payment to Petrobras, and capital returns 7 Production (MMboe) Sales revenue and realised price Free cash flow from operations 3 (US$m) Underlying EBITDAX 2 (US$m) Capital Expenditure (US$m) Net cash/(debt) (US$m) 1. The financial information for the six-month periods ending 31 December and 30 June 2023 is not audited but derived from audited and reviewed financial information. 2. Underlying EBITDAX and NPAT reflects the Company's assessment of financial performance. These are non-IFRS measure which are unaudited but derived from figures in the financial statements. Refer to slide 24 for reconciliation of these underlying adjustments. These measures are presented to provide further insight into Karoon’s performance. 3. Free cash flow from operations is defined as operating cash flows less lease liability payments and investing cashflows excluding the Baúna FPSO & Who Dat acquisitions. 3.7 5.4 3.5 3.9 3.9 0.1 1.5 1.4 1.4 3.7 5.5 5.1 5.3 5.3 0 1 2 3 4 5 6 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 Baúna Project Who Dat 93.8 10.7 78.2 56.5 155.7 0 30 60 90 120 150 180 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 74.8 (103.7) (67.8) (8.8) (237.9) (300) (200) (100) -- 100 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 267.1 409.1 315.0 291.1 234.0 3.8 94.4 76.0 74.4 267.1 412.9 409.4 367.1 308.3 73.0 81.5 75.1 70.6 64.9 0 15 30 45 60 75 90 0 100 200 300 400 500 600 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 Realised price (US$/boe) Sales revenue (US$m) Baúna Who Dat Realised price 148.2 283.4 193.0 174.7 149.3 2.9 73.8 50.8 51.2 148.2 286.3 266.8 225.5 200.5 0 50 100 150 200 250 300 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 Baúna Project & Corporate/Other. Who Dat (89.4) 275.8 47.8 128.8 (63.8) (200) (100) -- 100 200 300 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 For personal use only
Page 8
1H25 profit reflects market and timing effects 8 Underlying NPAT down 61% on 1H24 due to lower sales volumes, lower realised prices, higher DD&A and finance costs: Production costs higher, as charter savings from first two months of FPSO acquisition offset by higher O&M services rates Sales volumes reflect cargo in transit at period end Higher finance costs, reflecting higher average net debt position over period Income tax expense rate 42% (29% 1H24), varies from statutory rate (Brazilian 34%, US -Texas 21%) due to BRL:US$ exchange rate fluctuations, leading to higher US$ tax expense in 1H25 (lower in 1H24) for accounting purposes. Normalised cash tax rate ~32% US$ million 1H25 1H24 % Change Six months to: 30 June 25 30 June 24 Revenue 308.3 409.4 -25% Transportation costs (10.2) (12.1) -16% Net back revenue 298.1 397.3 -25% Production costs (incl FPSO dep’n & finance) (71.8) (68.8) +4% Royalties and other government take (23.3) (24.8) -6% Corporate & other (19.6) (20.0) -2% Impact of inventory movements 17.2 (16.9) >100% Underlying EBITDAX 1 200.5 266.8 -25% Exploration costs (4.7) (1.4) >100% DD&A (excl FPSO D&A) (89.2) (83.0) +8% Net finance and interest costs (29.3) (20.2) -45% Underlying pre -tax profit 1 77.4 162.3 -52% Income tax expense (32.4) (46.5) -30% Underlying NPAT 1 45.0 115.8 -61% Weaker realised pricing and lifting in progress 1. Underlying EBITDAX, NPAT & underlying pre-tax profit reflects the Company's assessment of financial performance. These are non-IFRS measures which are unaudited but derived from figures in the financial statements. Refer to slide 24 for reconciliation of these underlying adjustments. These measures are presented to provide further insight into Karoon’s performance. Movement in revenue (US$m) 315.0 234.0 94.4 74.3 409.4 308.3(42.8) (38.2) (10.1) (10.0) 1H24 Sales volumes Realised Price Sales volumes Realised Price 1H25 Baúna Project Who Dat For personal use only
Page 9
Unit Production Costs Reconciliation 1H25 Reported Back out AASB 16 Production costs related to operating leases Normalised costs Operating costs (US$ million) 54 54 Capitalised leases1 D&A (US$ million) 14 (14) Capitalised leases1 interest (US$ million) 3 (3) Cost of operating leases1 (US$ million) 20 20 Total costs (US$ million) 72 (17) 20 74 Production (US on NWI basis) (MMboe) 5.6 5.6 5.6 5.6 1H25 Unit production costs/boe 12.6 (3.0) 3.5 13.1 1H24 Operating costs2 (US$ million) 41 41 Capitalised leases1 D&A (US$ million) 22 (22) Capitalised leases1 interest (US$ million) 6 (6) Cost of operating leases1 (US$ million) 25 25 Total costs (US$ million) 69 (28) 25 66 Production (US on NWI basis) (MMboe) 5.5 5.5 5.5 5.5 1H24 Unit production costs/boe 12.5 (5.1) 4.6 12.1 Unit production costs reported on Net Working Interest (NWI) basis to exclude impact of royalties Unit production costs include operating costs as per note 4 (a) of financial statements and invoiced cost of material capitalised operating leases associated with production AASB16 derived capitalised leases, D&A and interest costs have decreased in line with lower production from Baúna Project Baúna Project unit production costs in 1H25 of US$ 14.95 /bbl, down from US$15.06/bbl in 1H24. Reflects lower lease (charter) payments following FPSO acquisition in April, offset by Transitional Services Agreement O&M costs and increased logistics, spread over increased production Who Dat unit production cost (NWI) in 1H25 of US$8.84/boe, up from US$6.74/boe in 1H24, driven by lower production, as well as higher maintenance -related materials and logistics costs 9 Normalising opex/boe for AASB16 capitalised operating leases and royalties 1. Relates to material capitalised leases included in Production Costs and treated as Operating Leases prior to implementation of AASB16 for consistency with global industry norms 2. 1H24 unit production costs restated to exclude carbon credit costs as reported in note 4 (a) in the 1H25 Half Year report (comparative). For personal use only
Page 10
1H25 free cash flow from operations 1 10 Liquidity and net leverage applied in line with capital allocation framework (8.8) 62.0 (38.2) (87.6) (23.8) (115.0) (29.2) 2.7 (237.9) (300) (250) (200) (150) (100) (50) 0 50 100 Net Debt (31 Dec 24) Cash flow from operations (incl lease liability payments) and flotel campaign Capex incl SPS-88 Dividends Acquisition of FPSO Contingent Payment to Petrobras Net Debt (30 June 25) Share Buy-back FX gain 1. Free cash flow from operations is defined as operating cash flows less lease liability payments and investing cashflows net of the Who Dat and Baúna FPSO acquisitions. 2. Net Leverage is defined as Net debt / underlying EBITDAX on rolling 12 month basis. 0.0x 0.5x 1.0x 1.5x 2.0x 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 Maximum leverage range 1 - 1.5x Movement in net debt (US$m) Net leverage 2 US$63.8m free cash flow deficit from operations in 1H25 due to planned shutdown and various infrequent expensed costs, including Baúna flotel (US$21.1m), SPS-88 well intervention (US$24.9m) and contingent consideration Lower capital demands in 2H25 should improve liquidity and reduce leverage, supporting upcoming potential FIDs over next 12 -18 months and ongoing capital returns and buyback in line with Capital Allocation Framework Net leverage below 1 – 1.5x EBITDA through investment cycle Free cashflow from operations For personal use only
Page 11
Capital allocation framework balances capital returns and growth investments Delivering value to shareholders 11 Priority remains safe and reliable operations while maintaining balance sheet strength and flexibility Capital Returns Policy of 20 -40% of underlying net profit after tax provides balance of capital returns while retaining sufficient capital to reinvest in business Capital allocation framework continues to ensure TSR -supportive growth and production sustaining investments remain within strategy and adhere to strict returns enhancing investment criteria Capital allocation framework allows for strategy -aligned TSR enhancing investments and further capital returns, within a framework of safe, reliable operations and strong flexible Balance Sheet. US$125 million of further capital returns have been announced since capital allocation was shared in Jul 24. US$25m on -market buyback in Jul 24 (completed in Sep 24) US$25m on -market buyback in Oct 24 (completed Mar 25) US$75m on market buyback in Jan 25 1 (in progress) Projects/ prospects Producing assets Shareholders NPV IRR Emissions metrics Sustainability & other social value metrics Safety & Reliability Operational excellence Base Value Capital returns dividend & buybacks Value, total shareholder return, BS strength/flexibility 1. Refer ASX released dated 30.1.25 “Additional US$75m buyback. 2. Chart is illustrative only. For personal use only
Page 12
CY25 guidance 1 12 12 months to 31 Dec 25 Prior New Production 2 Brazil MMboe 6.7 – 7.7 7.3 – 7.8 Who Dat (NRI) MMboe 2.3 – 2.8 2.4– 2.7 Total Production MMboe 9.0 – 10.5 9.7 – 10.5 Underlying Operating Costs Unit production costs (NWI) 3 US$/boe 12.5 – 17.5 12.0– 15.0 Exploration expenses, share based payments and business development US$m 11 - 14 Unchanged Unit DD&A (NWI)4 US$/boe 15 – 16 Unchanged Finance costs and interest (net of interest income) 5 US$m 50 – 60 Unchanged Other operating costs6,7 US$m 33 – 37 Unchanged Investment expenditure Neon8 US$m 8 – 11 Unchanged Other capex9 US$m 39 – 47 Unchanged Who Dat10 US$m 58 – 67 Unchanged Total capex US$m 120 – 140 Unchanged Petrobras consideration11 US$m 88 Unchanged Notes 1. Guidance is subject to various risks (including “Key Risks” set out in 2024 Annual Report) 2. Production assumes drilling results and expected future development projects, including well interventions, are delivered in accordance with their currently expected schedules 3. Unit production costs are based on daily operating costs associated with Baúna and Who Dat production, Baúna FPSO lease costs (pre AASB 16) and Karoon’s Net Working Interest production. Excludes depreciation on FPSO right -of-use asset capitalised under AASB 16 ‘Leases’, carbon costs and non -oil and gas related depreciation and is based on Karoon’s Net Working Interest production 4. Excludes depreciation on FPSO right -of-use asset capitalised under AASB 16 ‘Leases’ and non -oil and gas related depreciation. 5. Finance costs and Interest includes fees, interest on debt and financial instruments, interest income and withholding taxes associated with intra -group and cross border funds movements in support of capital management 6. Other operating costs: includes staff costs, IT, other corporate and Business Unit overhead costs and non -oil and gas related depreciation. Excludes royalties and other government take, social investment/sponsorships in lieu of tax, foreign exchange gains/losses, hedge costs, non -underlying transaction costs. 7. Guidance excludes US$21.1 million incurred in the 1H25 flotel campaign, US$5 – 7 million associated with the FPSO transition and US$4 - 5 million of corporate relocation costs, which are not included in underlying earnings. 8. Neon capex includes costs for the first stage of the Neon Define phas e. It does not include spend for the next two stages of the Neon Define phase. 9. Includes sustaining capex for Baúna, including costs for the SPS -88 well intervention and signature bonuses for the new Santos Basin blocks. 10. Includes the Who Dat West exploration well capex which has been expensed. 11. Contingent consideration (including accrued interest) paid to Petrobras in January 2025. For personal use only
Page 13
Operational Update Julian Fowles CEO and Managing Director For personal use only
Page 14
- 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Nov-20 May-21 Nov-21 May-22 Nov-22 May-23 Nov-23 May-24 Nov-24 May-25 FPSO efficiency 1 in 1H25 94.5%, up from 85.3% in 1H24 and 83.8% in 2H24 2025 flotel -supported maintenance campaign and SPS-88 intervention completed on time and budget Failure of one of three electrical connections in SPS -92 Electric Submersible Pump in August. Rig for intervention being sourced 2 Despite SPS -92, 2025 production guidance increased following strong performance in 1H25 Several areas of FPSO reliability vulnerability remain. Flotel secured for second maintenance campaign planned for 1H26, to a ddress priority maintenance backlog (subject to approvals) Improving FPSO reliability, partly offset by SPS -92 ESP issue Production: Baúna Project 1. FPSO efficiency is defined as the proportion of actual and potential production excluding scheduled shutdowns 2. Refer ASX release dated 25.8.25 “SPS-92 downhole pump issue”. Subject to availability, contracting and regulatory approvals. Baúna Project six month production (MMbbl) Baúna Project monthly production since KAR assumed operatorship (MMbbl) Illustrative 12% pa decline rate from Jan-21 Production uplift due to Baúna interventions & Patola 2.13 3.37 3.66 5.38 3.54 3.96 3.94 3.36 - 3.86 based on CY25 guidance 0 1 2 3 4 5 6 30 Jun 22 31 Dec 22 30 Jun 23 31 Dec 23 30 Jun 24 31 Dec 24 30 Jun 25 31 Dec 25 (F) 14 For personal use only
Page 15
Direct control of FPSO operations Indicative timeline for operatorship transition (subject to change) 30 April 25 Transaction close 3Q25 Select service provider(s) 1Q26 Receive approvals 1H26 Complete transfer to Karoon Reviewed several FPSO operating models: Full Service, where all operations and maintenance on FPSO are outsourced Hybrid, operated by Karoon with various services provided by external providers Concluded optimal model is for Karoon to operate FPSO, with support from service providers for routine operations, maintenanc e and major works as required. Operatorship of vessel provides several advantages: Direct FPSO management control Most cost -effective outcome Enables emissions improvement initiatives to be implemented, if available Longer transition than ‘full service’ model. Aiming to take over full operatorship of vessel in 1H26, subject to engaging contractors, recruiting staff, establishing management systems and processes, and receiving regulatory approvals to operate Working with Altera&Ocyan to ensure continuity of safe and reliable operations and smooth handover of operational control Baúna FPSO Operating Model 15 For personal use only
Page 16
IRR well above mid -teens post tax hurdle rate Baúna FPSO acquisition economics largely unchanged Acquisition completed (US$115m plus US$8.5m transaction costs) Expected reduction in Baúna opex of ~US$30 -40m pa post transition and with implementation of cost efficiency initiatives: Later than originally planned due to decision for Karoon to operate vessel Transition expenses of US$5 -7m in CY25 No lease costs, partly offset by establishment of in -house FPSO marine, cargo, production and engineering/planning and cost of new providers for maintenance and other services Revitalisation work scopes and capex being matured and implementation plans developed: Expect to invest US$55 - 65m for revitalisation in 2026 and US$80 -90m (2025 $) for life extension in early 2030s Additional Baúna FPSO sustaining capex of ~US$5m pa Movement of significant Contingent Resources to Reserves (slide 17) defers commencement of field decommissioning 16 For personal use only
Page 17
Since acquiring Baúna in November 2020, recoverable volumes have more than doubled through Patola development, FPSO acquisiti on, asset life extension and stronger than expected reservoir performance In 1H25, 2P Reserves increased by 13.7 MMbbl due to transfer of 2C Contingent Resources and 3.9 MMbbl upward revision, more t han offsetting production of 3.9 MMbbl: Field life extended from 2032 to 2039 (based on current technical and commercial evaluation) reflecting expected reduced FPSO opex Better than expected reservoir performance, with lower production decline seen during 2024 and 1H25 AGR, internationally recognised expert in petroleum resources evaluation, has performed independent evaluation of Reserves 1 Upgraded following FPSO acquisition and strong reservoir performance Baúna Reserves and Resources 1. See ASX Release dated 27.08.25 ‘Baúna Project Reserves Upgraded’. 2. Reserves presented are as disclosed in the FY21, FY22, FY23, TY23 and 2024 Annual Reports as well as the ASX Release dated 27.08.25 ‘Baúna Project Reserves Upgraded’. As regards the final Reserves position as at 30 June 2025, Karoon is not aware of any new information or data that materially affects these estimates and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Baúna Project 2P Reserves 2 (MMbbl) 14.7 14.8 39.2 29.5 17.6 86.3 52.7 (33.6) Acquisition of Bauna November 2020 Patola & Reserves Revisions FPSO Life Extension & Reserves Revisions Reserves revisions Production 2020 - 1H25 Reserves at 30 Jun 25 +120% Reserves revisions Patola at FID 17 For personal use only
Page 18
May 18 June 23 April 25 April 25 1. Contingent and Prospective Resource volume estimates presented are as disclosed in ASX release 16.4.25 “Neon Enters FEED”. Ka roon is not aware of any new information or data that materially affects these resource estimates and all material assumptions a nd technical parameters underpinning the estimates continue to apply and have not materially changed. Regarding Prospective Resources, t he estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation i s required to determine the existence of a significant quantity of potentially moveable hydrocarbons. Resource totals have been added arithmetically and are unrisked. 2. Refer ASX releases: a. 8.5.18 “Karoon Resource Update”. b. 10.7.23 “Neon Resource Update”. c. 16.4.25 “Neon Enters FEED”. 3. Formal granting of S -M-974 and S-M-1038 expected in 4Q25. Refer ASX release dated 18.6.25 “Successful bid for blocks and guidanc e update”. Neon 2C Contingent Resources growth since 2018 1 Neon Contingent Resource estimates materially improved in 1H25: 1C to 59.8 MMbbl (+59%), 2C to 86.5 MMbbl (+44%) and 3C to 108.0 MMbbl (+21%) Resources (including for Piracucá, subject to final license award 3) to be reviewed and certified by 3rd party ahead of year end 2025 Reserves and Resources Statement +57% Incorporation of initial control well results, drilled in 2023 Completion of integrated review of all available data 55.02a +5.12b +26.42c 86.52c Underpins improved economics for potential development Strong Neon 2C Resource growth 3 18 For personal use only
Page 19
Timeline to potential Final Investment Decision (FID) 1 Stage 2 Stage 3Stage 1 Total spend US$10 –12 million 2 FEEDs and contracting evaluation Further studies (wells, Flow assurance) Complete farm -down Route and seabed surveys Tender for proposals Draft procurement and execution plans Joint Operating Plan executed Refine definitions Negotiate and finalise contracts Finalise procurement and execution plans Final reviews and approval ‘Define’ phase taking place in three stages to mitigate capital exposure. Currently in Stage 1. Entry to subsequent stages dependent on technical and commercial progress and market conditions 2 Duration of Stage 1 extended to allow for further engineering definition via Front End Engineering Design (FEED) for FPSO and design of optimal subsea architecture by end 2025 Total spend to FID: US$22 – 30m, subject to stage gates (excludes any potential long lead item expenditures) Discussions on farm down of 30% to 50% commenced, targeting to reach agreement by end 2025, subject to market interest: A prerequisite to taking FID, to balance risk and capital demands FID also dependent on results of definition work, supportive macro conditions and Board approval Expected capital cost for phase 1 (recovery of 60 – 70 MMbbl) US$0.9 – 1.2bn (100% gross), mid-case IRR >20%, LT Brent US$65/bbl (2025 real) 2 Apr 2025 1Q 2026 Mid- 2026 3Q/ 4Q 2026 1. Indicative only. Timeline and scope of each stage is subject to change and progress through each stage gate. 2. Refer ASX release dated 16.4.25 “Neon Enters FEED”. ‘Define’ Phase to be completed in three sub -phases, duration extended Neon Development Opportunity 19 For personal use only
Page 20
Performance consistent with KAR guidance Production: Who Dat 1H25 gross production of 5.60 MMboe consistent with expectations: 1.36 MMboe NRI net to KAR Recent JV meeting highlighted opportunities to improve production efficiency and limit natural decline: E6 sidetrack expected to commence drilling in late 3Q25, online in 4Q25 at initial gross production rate of 3 -5,000 boepd assuming success Potential further sidetrack in 1H26 Recent technical studies identified opportunities to improve facility reliability and reduce bottlenecks Karoon’s NRI semi annual production (MMboe) Who Dat Project side track/infill opportunities 1.54 1.36 1.36 1.04 - 1.34 based on CY25 guidance 30 Jun 24 31 Dec 24 30 Jun 25 31 Dec 25 (F) Source: Company data 20 For personal use only
Page 21
Maturing discoveries surrounding Who Dat FPS Who Dat East and South discoveries offer attractive tieback potential Debottlenecking study confirmed only minor modification required to accommodate a subsea tie-back development, subject to system availability Who Dat East has entered design phase with preferred concept to be via subsea tieback to Who Dat FPS: Resource development planning, facilities design engineering and cost estimation ongoing 15.7 MMboe 2C Contingent Resource (on NRI basis)1 Who Dat East initial one well development FID targeted in late 2025/early 2026 Joint Venture continues to study Who Dat South development options, focusing on reducing subsurface uncertainty and development optimisation: 7.4 MMboe of 2C Contingent Resource (on NRI basis)1 1. Contingent Resource volume estimates presented are as disclosed in the 2024 Annual Report. Karoon is not aware of any new information or data that materially affects these resource estimates and all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. 21 For personal use only
Page 22
Summary Priorities for 2025: Safe and reliable operations and preparations for smooth transfer of FPSO operational control from A&O to Karoon in 2026, improving production reliability and uptime Mature organic growth opportunities at Who Dat and Neon with potential end 25/early 26 and 2H26 FIDs, respectively Updated 2025 production guidance following better than expected performance from Baúna Project, while significantly extending field life, deferring abandonment and increasing reserves Capital demands in 2H25 expected to reduce from 1H25 levels Recent deepwater blocks awarded in offshore Brazil have low capital obligations, being evaluated for longer term organic growth potential Robust cash flows, liquidity and low leverage provide opportunity to balance capital returns to shareholders and pursuing organic growth opportunities that deliver attractive Total Shareholder Returns Progressively relocating key corporate roles from Melbourne to Houston and Rio de Janeiro, to simplify Company structure, increase efficiency and facilitate collaboration Strategy execution on track 22 For personal use only
Page 23
Appendix and Glossary For personal use only
Page 24
Change in fair value of contingent consideration recognises movement each year due to revaluation of Petrobras contingent con sideration Hedges required by syndicated loan facility were entered into for the period March 2024 to December 2025 Costs of unsuccessful exploratory wells of US$13.2m post -tax relates to the Who Dat West (MC -629-1) well. Corporate relocation relates to the costs associated with relocating key corporate head office roles from Melbourne to Houston and Rio de Janeiro Flotel costs relate to flotel utilised to accommodate additional workforce for the extended maintenance campaign Deferred tax impact and gain on right disposal of right of use asset relate to non cash adjustments associated with the acquisition of the Baúna FPSO Cumulative translation adjustment impact on current tax expense reflects a non - monetary movement in deferred tax expense due t o FX fluctuations to the Brazilian asset base, denominated in REAL (BRL), and the reporting currency, which is US$. This adjustment will occur each reporting period in line with the movement in conversion rates between BRL and US$. Appendix 1: Reconciliation of underlying results to statutory results 1H25 1H24 NPAT EBITDAX NPAT EBITDAX Statutory results 71.0 227.1 61.8 246.9 Flotel costs 13.9 21.1 - - Unsuccessful exploratory wells 13.2 - - - Corporate relocation costs 2.2 3.1 - - Change in fair value of contingent consideration (11.2) (17.0) 3.1 4.7 Realised losses/(gains) on cash flow hedges 0.8 1.3 7.1 10.7 Foreign exchange losses/(gains) 0.2 0.2 (0.3) (0.3) Advisory & transaction costs - - 4.8 4.8 Gain on disposal of right of use asset (Baúna FPSO) (35.3) (35.3) - - Deferred tax asset write off - Baúna FPSO 18.4 - - - Cumulative translation adjustment impact on deferred tax (28.3) - 39.3 - Total adjustments (26.0) (26.5) 54.0 19.9 Underlying results 45.0 200.6 115.8 266.8 Underlying EBITDAX (earnings before interest, tax, depreciation, depletion, amortisation, exploration and costs of unsuccessful wells) and underlying net profit after tax are non-IFRS measures. 24 For personal use only
Page 25
Appendix 2: Contingent Consideration on Baúna Acquisition Average Brent Price (in US$ units) CY2022 CY2023 CY2024 CY2025 CY2026 Maximum B < 50 – – – – – – 50 <= B < 55 3 3 3 2 2 13 55 <= B < 60 17 17 17 8 4 63 60 <= B < 65 34 34 34 15 6 123 65 <= B < 70 53 53 53 24 10 193 B >= 70 78 78 78 36 15 285 Total contingent consideration of up US$285m plus accrued interest at 2% pa (from 1 January 2019 to after date of testing each January) payable to Petrobras for Baúna acquisition. Payable each January from CY23 to CY27 , dependent on annual average Platts Dated Brent oil price over CY22 – CY26 (see table opposite) At 30 June 2025, US$38.4 million liability recognised based on net present value of remaining amounts payable, including interest, with discount rate of 1.92% applied Decrease of US$17.0m pre -tax in 1H25 primarily due to revision in oil price forecast, based on Karoon’s internal assessment of future oil prices, which considers industry consensus and observable oil price forecasts On 30 January 2025, paid Petróleo Brasileiro S.A. (Petrobras) US$87.6 million (US$78 million plus US$9.6 million accrued interest) as contingent payment for CY24 Reflected average Brent price applicable to CY24 Contingent Payment Year of US$80.76/barrel Payment made from existing cash on hand 1. See Note 10 - Other financial assets and liabilities in the 1H25 Half Year report for full details. 25 For personal use only
Page 26
Glossary 26 Term Definition 1H25 Half year ended 30 June 2025 1H24 Half year ended 30 June 2024 AASB Australian Accounting Standards Board. ANP Agência Nacional do Petróleo, Gás Natural e Biocombustíveis. Baúna or Baúna Project Concession BM-S-40 containing the producing Baúna, Piracaba and Patola light oil fields in Brazil. bbl or barrel Barrel of oil = 42 United States gallons; equivalent to approximately 159 litres Boe Barrel of oil equivalent. 1 Boe = 6000 scf natural gas Boepd Barrels of oil equivalent per day Bopd Barrels of oil per day BRL Brazilian Real CY Calendar year D&A Depreciation and amortisation D,D&A Depreciation, Depletion and amortisation EBITDAX Earnings before interest, tax, depreciation, amortisation, exploration and costs of unsuccessful wells Emission intensity Total Scope 1 and 2 Greenhouse Gas (GHG) (kgCO2e) divided by the total production (boe) of the equivalent period. FEED Front End Engineering and Design FPS Floating, production and storage vessel FPSO Floating, production, storage and offloading vessel Free cash flow from operations Operating cash flows less lease liability payments and investing cashflows net of the Who Dat and Baúna FPSO acquisition Gearing Gearing is defined as net debt / (net debt + book value of equity) JV Joint Venture Karoon Karoon Energy Ltd and its subsidiaries kgCO2e/boe Kilograms of carbon dioxide equivalent per barrel of oil equivalent Leverage Leverage is based on underlying EBITDAX for the last twelve months divided by net debt For personal use only
Page 27
Glossary cont. 27 Term Definition LTI Lost time injury MMbbl Million barrels of oil MMboe Million barrels of oil equivalent. Gas converted to oil on basis of 6,000 scf gas = 1 barrel of oil equivalent NRI Net Revenue Interest relates to a share of production after deducting royalties, overriding royalties, and other similar burdens from the working interest. Net Debt Total borrowings less cash and cash equivalents (excluding transaction costs) NWI Net Working Interest NPAT Net profit after tax p.a. per annum R&D Research and Development RBL Reserve Based Lending Recordable incident Any incident required to be reported to parties external to Karoon, including Medical Treatment Injuries, Alternative Duties Injuries, Lost Time Injuries and Fatalities Scope 1 emissions Direct GHG emissions occurring from sources controlled or owned by the organisation includes direct emissions from operated assets, non-operated assets on an equity basis and field logistics activities in Brazil. Contracted exploration, well development, well workover and field logistics associated with non-operated assets and any other indirect emissions as defined in the GHG Protocol are considered Scope 3. Scope 2 emissions Indirect GHGs released from purchased energy. TRIR Total Recordable Injury Rate TSR Total Shareholder Return Who Dat The Who Dat producing assets comprise the Who Dat, Dome Patrol and Abilene oil and gas fields and associated infrastructure. The fields are located in the Mississippi Canyon, offshore Louisiana in the USA. For personal use only
Page 28
For personal use only