Karoon Energy Ltd (KRNGF) Q4 2024 Earnings Call Transcript

2025-02-27 08:31:38 ET

Karoon Energy Ltd (KRNGF)

Q4 2024 Earnings Conference Call

February 26, 2025 07:00 PM ET

Company Participants

Julian Fowles - Chief Executive Officer & Managing Director

Ray Church - Chief Financial Officer

Marco Brummelhuis - Executive Vice President & Country Manager, Karoon Brazil

Ann Diamant - Head, Investor Relations

Conference Call Participants

James Byrne - Citi

Dale Koenders - Barrenjoey

Henry Meyer - Goldman Sachs

Nik Burns - Jarden Australia

Gordon Ramsay - RBC

Mark Wiseman - Macquarie

Rob Koh - Morgan Stanley

Presentation

Operator

Thank you for standing by, and welcome to the Karoon Energy Limited 2024 Full Year Results. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to Mr. Julian Fowles, CEO and Managing Director. Please go ahead.

Julian Fowles

Thank you, Mel, and good morning everyone, and thank you for joining our 2024 full year results webcast. My name is Julian Fowles, CEO of Karoon and I have with me this morning Ray Church, our CFO; Marco Brummelhuis, who leads Karoon Brazil; and Ann Diamant, our Head of IR.

Earlier this morning, we released our 2024 full year results to the market, alongside an announcement that we have signed a sale and purchase agreement to acquire the Bauna FPSO from the Altera & Ocyan joint venture. We shall discuss the FPSO acquisition a little later in the presentation.

Now moving on and noting the disclaimers on slide 2. I will move through to slide 4, which provides an overview of 2024. It was a challenging year in many ways, which saw a decline in our share price as we failed to meet our production targets both at Bauna and Who Dat and our safety performance was below our expectations. We'll discuss how we are addressing these issues and the actions we are taking during this morning's presentation.

2024 saw us deliver annual production of 10.4 million boes and sales revenue of US$776 million both some 13% to 14% up on 2023, while our underlying NPAT of $214 million was a slight improvement on 2023. We have moved Neon into the select phase with a decision to potentially move into FEED due in April this year.

Our exploration program at Who Dat delivered two out of three discoveries and we have defined a number of attractive infield opportunities, two of which subject to various approvals we hope to drill in Who Dat in the second half of 2025 and early 2026. Potential development options for the two new discoveries are being investigated and we expect one of them to reach FID by early 2026.

We ended the year in a strong financial position with net debt of less than $10 million and liquidity of $681 million. We formalized our capital returns policy and we paid Karoon's first ever dividend of AUD0.04496 per share now supplemented with an unfranked $0.05 final dividend in addition to announcing two $25 million on-market share buybacks. The dividends represent a payout ratio of 23% of 2024 underlying NPAT. And in January we also announced the intention to buy back a further $75 million of shares over the course of 2025....

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