Karoon Energy Ltd · ASX:KAR
Karoon Energy — 1H FY2022 Earnings Presentation
31 slides from Karoon Energy's earnings presentation, Feb 23, 2022
Slide 1: ASX cover letter: Interim Financial Report
23 February 2022 Company Announcements Office ASX Limited Dear Sir / Madam Interim Financial Report – 2022 Financial Year – ASX Release and Investor Presentation Attached are the following documents in relation to Karoon Energy Ltd’s interim financial report for the financial half-year ended 31 Dece
Slide 2: ASX Release: Highlights
ASX RELEASE Issued 23 February 2022 1 Underlying net profit after tax of US$21.1 million for the first half of FY2022 Highlights: Six months to December 2021 2020^ Sales revenue (US$ million) 186.5 23.8 Unit Production costs (US$/bbl) 23.50 22.18 Underlying EBITDA (US$ million) 1 89.5 3.7 Unit depre
Slide 3: CEO commentary on financial and operational performance
for its Scope 1 and 2 Baúna greenhouse gas (GHG) emissions in FY2021, and result in an estimated 60% of total Baúna-Patola Scope 1 and 2 emissions to be offset between 2022 and 2030. Commenting on the results, Chief Executive Officer and Managing Director, Dr Julian Fowles, said: Financial and Opera
Slide 4: Growth outlook, sustainability and contacts
infrastructure, we expect to capture material operating and logistical efficiencies as production rates increase. Indicative unit operating costs are targeted to fall from US$28-30/bbl in FY2022 to US$12 – 18/bbl in FY2023. “We are continuing to undertake substantial analysis, engineering and techni
Slide 5: Conference call and Table 1: Guidance for FY2022
Conference call Karoon’s Chief Executive Officer and Managing Director, Dr Julian Fowles, will hold a conference call for analysts and investors to discuss the 2022 Half Year Results on Wednesday, 23 February 2022 at 11am (Melbourne time). The conference call will be streamed live and can be accesse
Slide 6: Forward-looking Statements
Forward-looking Statements Petroleum exploration and production operations rely on the interpretation of complex and uncertain data and information which cannot be relied upon to lead to a successful outcome in any particular case. Petroleum exploration and production operations are inherently uncer
Slide 7: Karoon FY2022 First Half Results
Karoon FY2022 First Half Results 23 February 2022
Slide 8: Disclaimer / Definitions
Disclaimer / Definitions Disclaimer This presentation has been prepared by Karoon Energy Ltd. 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. The information contai
Slide 9: Highlights
Highlights Julian Fowles Managing Director and CEO 3
Slide 10: 1H FY2022 – Key Highlights
1H FY2022 – Key Highlights Excellent performance from Baúna as Karoon completes its first year as an oil producer Safe and Reliable Operating Strong Financials Growth Projects Advancing Sustainable Business Performance ▪ Underlying NPAT1,2: US$21.1m ▪ Completion of LP flare and mooring ▪ Safety rema
Slide 11: HSSE performance
HSSE performance Safe and reliable operations core priority for Karoon ▪ One LTI in November 2021 (slip in FPSO galley). Slips and trips education program Six months to Dec 2021 Actual Target underway throughout Karoon ▪ No material environmental incidents TRIR 0.47 <2.0 ▪ Strict COVID-19 protocols
Slide 12: Financial Results and Capital Management
Financial Results and Capital Management Ray Church Executive Vice President and CFO 6
Slide 13: Revenue and underlying result
Underlying result US$ million 1H22 1H21 1H22 1H21 Revenue 186.5 23.8 Production (MMbbl) 2.5 0.82 Production Costs (incl FPSO depn & fin) (58.8) (18.1) Sales Volume (MMbbl) 2.57 0.5 Royalties (19.1) (3.9) Realised Oil Price (US$/bbl) 72.43 47.31 O&G Assets DD&A (29.8) (10.5) Production of 2.50 MMbb
Slide 14: Strong financial performance in 1HY2022
Strong financial performance in 1HY2022 US$m US$186.5m revenue for 1HFY22 (July – Dec 2021), Income Statement ‐ Comparison of Six Monthly Performance 200 27% higher than 2HFY21 (Jan – June 2021) 186 180 GROSS MARGIN % Production costs slightly lower half-on-half 160 147 1HY21 2HY21 1HY22 28% 36%
Slide 15: Cash flow
Cash flow 1HFY22 Cash flow (US$ million) ▪ Stable Baúna production continues to provide strong foundation for operating cash flow and is further supported by improving oil price. US$184.5m oil sales receipts ▪ US$62.3m production cost outflows incl FPSO lease and US$19.1m royalty payments ▪ After US
Slide 16: Balance sheet profile and available liquidity
Balance sheet profile and available liquidity Balance Sheet Highlights Facility Amount (US$ million) Cash and cash equivalents US$204m (30 June 2021: US$133m) 250 Non-Cash working capital broadly stable. US$3.7m movement from (US$79.7m) 30 June to (US$76m) 31 Dec, predominantly receivables growt
Slide 17: Reconciliation of Underlying NPAT to Statutory Result
Reconciliation of Underlying NPAT1 to Statutory Result Six months to December 2021 2020 Material increase recognised in fair value of contingent consideration payable to Petrobras for Baúna asset US$ million US$ million (US$183.8m pre-tax, US$121.3m after tax) due to higher future oil price expect
Slide 18: FY2022 guidance
FY2022 guidance1 Production guidance narrowed towards upper end of range, unit opex reduced Low High Strong 1HFY22 production due to high facilities uptime has narrowed production guidance towards Production (MMbbl) 4.4 4.6 high end of prior range Costs Baúna production expected to be lower in 2
Slide 19: Strategy and Outlook
Strategy and Outlook Julian Fowles Managing Director and CEO 13
Slide 20: Recap on Karoon's key strategic objectives
Recap on Karoon’s key strategic objectives Deliver safe and reliable operations and sanctioned projects to create foundation for growth Delivering our Transformation Safely execute Baúna base business ▪ Deliver targeted production, safely and reliably ▪ Build reputation for operational excellence ▪
Slide 21: Enablers to deliver strategy
Enablers to deliver strategy Deliver operations and sanctioned projects to create foundation for growth Delivering our Transformation Organisation and capabilities ▪ Management and Board revitalised ▪ New systems and processes ▪ Subsurface focus pivoted from greenfields exploration to production, ex
Slide 22: Strong production performance from Baúna field
Strong production performance from Baúna field High facilities availability and active well management Delivering high operational uptime through focus on process safety, facility integrity and preventive maintenance ▪ Achieved outstanding operational uptime of 99% in 1HFY22, with few unplanned shut
Slide 23: Baúna interventions and Patola development on track
Baúna interventions and Patola development on track Targeting increase in production to >30,000 bopd in early CY2023 Baúna well intervention project Patola Development ▪ Targeting 5,000 – 10,000 bopd incremental production from four ▪ Drilling of two new development wells scheduled to interventions
Slide 24: Indicative production and cost profile
Indicative production and cost profile* Sanctioned projects targeting material production increase and opex/bbl reduction Indicative production profile (MMbbl)* Indicative unit operating cost outlook (US$/bbl)* 8 - 10 28 - 30 25 12 - 18 4.4 – 4.6 3.14 FY21A FY22 FY23 FY21A FY22 FY23 Production from
Slide 25: Optimising Neon development concept
Optimising Neon development concept Alternative development concepts being explored, to maximise value • Neon and Goiá light oil discoveries located 50 - 60km NE of Baúna in ~300m water depth • Work ongoing to update preliminary field development planning and re-evaluate commercial potential • Focus
Slide 26: Assessing inorganic growth options
Assessing inorganic growth options Disciplined process underway to identify and pursue value-accretive growth opportunities ▪ Karoon continuing to actively screen inorganic growth opportunities ▪ Well placed to take advantage of ongoing M&A in Brazil ▪ Competing against relatively small but highly m
Slide 27: Carbon Management Action Plan to achieve emissions targets
Carbon Management Action Plan to achieve emissions targets Targeting carbon neutral for Baúna/Patola from FY2021, Net Zero by 20351 Priority 1 Priority 2 Priority 3 Avoid and Reduce Assess direct Purchase additional offsets if needed First priority is to avoid or reduce and indirect • Purchased 19,8
Slide 28: Summary: Karoon positioned to deliver shareholder value
Summary: Karoon positioned to deliver shareholder value Safe, reliable oil producer with clear sustainable growth path Oil producer with exposure to exciting Brazilian oil industry ▪ One of the few companies with pure oil exposure listed on the ASX ▪ 100% owner/operator of a high-quality asset, deli
Slide 29: Appendix: Impact of AASB Leases
Appendix Impact of AASB 16 ‘Leases’ The Baúna FPSO charter contract lease has been accounted for in accordance with AASB 16 ‘Leases’. The following amounts have been reflected in the 1H FY2022 results: Six months to 31 December 2021 US$ million Profit and Loss Cost of sales – depreciation on FPSO ri
Slide 30: Karoon
| 4 Karoon
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