Karoon Energy Ltd · ASX:KAR
Karoon Energy — FY2022 Earnings Presentation
25 slides from Karoon Energy's earnings presentation, Aug 25, 2022
Slide 1: Karoon Energy FY2022 Results
Karoon Energy FY2022 Results 25 August 2022
Slide 2: Disclaimer
Disclaimer 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 contained in this pr
Slide 3: FY2022 Highlights and Achievements
Julian Fowles CEO and Managing Director FY2022 Highlights and Achievements
Slide 4: FY2022 Overview
FY2022 Overview Substantial progress made across all areas STRONG OPERATIONAL GROWTH ACTIVITIES SUSTAINABLE OPERATIONS ROBUST FINANCIAL AND FINANCIAL RESULTS UNDERWAY POSITION Committed to climate targets : Four Lost Time Incidents, TRIR Four-well Baúna intervention At 30 June 2022: of 0.77. No majo
Slide 5: HSSE Performance
HSSE Performance No serious incidents in FY2022 Core focus is on maintaining safe and healthy work environment and protecting natural habitats where we work Four Lost Time Incidents (LTI) recorded in FY2022: Total recordable incident rate per 200,000 hours (TRIR) of 0.77 Fortunately, no long-term ef
Slide 6: Financial Results
Ray Church Executive Vice President and CFO Financial Results
Slide 7: FY2022 Financial Highlights
FY2022 Financial Highlights Unit production costs Underlying EBITDA Revenue US$385.1m US$25/bbl US$205.2m Up US$214.3m1 No change1 Up US$144.1m1,2,3 Debt Facility Operating cashflow US$210m Liquidity US$337.7m US$154.2m New reserve-based Up US$204.5m1 Up US$124.4m1 lending facility 1. Compared to FY
Slide 8: Revenue - US$ million
Underlying Result US$ MILLION FY2022 FY2021 FY2022 FY2021 Revenue 385.1 170.8 Production (MMbbl) 4.64 3.14 Other income (excl interest) 0.6 - Sales Volume (MMbbl) 4.54 2.90 Production Costs (incl FPSO depn & fin) (117.7) (78.9) Realised Oil Price (US$/bbl) 84.74 59.00 Royalties (41.5) (18.9) DD&A (5
Slide 9: Contingent Consideration on Baúna Acquisition
Contingent Consideration on Baúna Acquisition Maximum Contingent Consideration payable to Petrobras for AVERAGE CY2022 CY2023 CY2024 CY2025 CY2026 TOTAL Baúna acquisition is US$285m (plus interest) BRENT PRICE (IN US$) Amount recognised at 30 June 2022 is US$298.3m, based on B < 50 – – – – – – net p
Slide 10: Cash Flow
Cash Flow FY2022 CASH FLOW (US$ MILLION) Stable Baúna production and strong oil price resulted in US$363m oil sales US$124m production cost incl FPSO lease and US$41m royalty payments US$114m cash from operations funded growth investments, deferred consideration and Pitkin settlement US$44m Baúna de
Slide 11: Cash and Available Liquidity
Cash and Available Liquidity FACILITY TENURE (US$ MILLION) DEBT AND LIQUIDITY AT 30 JUNE 2022 In November 2021, reached financial close on new reserve-based, non- recourse, syndicated loan facility US$160m reserve-based, non-recourse loan facility, 425bps margin over SOFR. US$30m drawn In April 2022
Slide 12: FY2023 guidance
FY2023 guidance1 Low High NOTES: 1. Guidance as at 25 August 2022. Subject to various risks (including those Production (MMbbl) 7 9 “Key Risks” set out in Karoon’s 2022 Annual Report). Costs 2. Unit Production Costs: based on daily operating costs associated with Baúna production, excluding governme
Slide 13: Reconciliation of underlying result to statutory result
Reconciliation of underlying result1 to statutory result US$ MILLION 2022 2021 EBITDA NPAT EBITDA NPAT Material increase recognised in fair value of contingent consideration payable to Reported results (28.4) (64.5) 11.4 4.4 Petrobras for Baúna asset Underlying adjustments Hedges required by syndica
Slide 14: Strategy and Outlook
Julian Fowles CEO and Managing Director Strategy and Outlook
Slide 15: Macro Environment
Macro Environment Current environment provides opportunities and risks for Karoon FY2022 characterised by risks and uncertainties on many fronts Underlying demand outstripping supply, reducing inventories and putting pressure on refiners, pushing up prices High prices exacerbated by global economic
Slide 16: Strategic Objectives
Strategic Objectives Deliver base production and sanctioned projects to create foundation for further growth Execute Baúna base business, focus on safety, reliability, strict capital controls Deliver sanctioned intervention and Patola development projects: Aim to double production, reducing unit ope
Slide 17: Baúna Operating Performance
Baúna Operating Performance High facilities uptime and active well management FPSO FACILITIES UPTIME IN FY2022 1 FOCUS ON PROCESS SAFETY, FACILITY INTEGRITY AND 100% 95% PREVENTIVE MAINTENANCE 90% 85% 80% Operational uptime 99% in FY2022, excluding scheduled shutdowns 75% 70% 65% Reflects work under
Slide 18: Baúna Interventions and Patola
Baúna Interventions and Patola Targeting increase in production to >30,000 bopd BAÚNA INTERVENTION PROJECT BM-S-40 First well entered (install ESP in PRA-2) late May 2022. Completed late June 2022. Production stable at ~4,000 bopd vs 1,900 bopd previously PRA-1 Second intervention to install gas lif
Slide 19: Baúna/Patola Revised Cost and Schedule
Baúna/Patola Revised Cost and Schedule Upward pressure on diesel cost due to oil price strength COST ESTIMATES/TIMETABLE 1 Calendar Year 2020 2021 2022 2023 Baúna intervention cost estimate increased to US$135 – 145 million, due to higher diesel costs, unseasonal weather Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 20: Indicative Production and Cost Profile
Indicative Production and Cost Profile1 Based on development projects underway INDICATIVE PRODUCTION PROFILE (MMBBL) TARGETING MATERIAL PRODUCTION INCREASE/UNIT 7–9 COST REDUCTIONS Production from BM-S-40 base business assumes 92 – 97% facilities uptime 4.64 (excluding scheduled outages), ongoing op
Slide 21: Progressing Neon Development Concept
Progressing Neon Development Concept Control well drilling aimed at de-risking structure NEON EVALUATION Neon, Goiá light oil discoveries 50-60km NE of Baúna, 300m water depth Revised preliminary development concepts confirmed sufficient commercial potential to justify control well drilling campaign
Slide 22: Assessing Inorganic Growth Options
Assessing Inorganic Growth Options Disciplined process to identify and pursue value-accretive growth opportunities Continuing to actively screen inorganic growth opportunities Rigorous screening process used, with key criteria including: Value accretive, with acceptable risk profile Fundable Produci
Slide 23: Progress on Climate and Social Projects
Progress on Climate and Social Projects First standalone Sustainability Report released CLIMATE Climate targets: Carbon neutral 1 on Baúna operations from FY2021 - achieved for FY2021 and planned to be achieved for FY2022 and Net Zero by 2035 2 Priority to reduce emissions where possible. Emissions
Slide 24: Summary: Well Positioned to Deliver Shareholder Value
Summary: Well Positioned to Deliver Shareholder Value Sanctioned projects, plus organic and inorganic growth potential Since taking over operatorship, Baúna natural decline mitigated from ~15% to ~10% pa Baúna intervention program underway, targeting additional 5,000 – 10,000 bopd by end CY2022 With
Slide 25: Appendix: Definitions
Appendix: Definitions 1H Financial period from 1 July to 31 December 2H Financial period from 1 January to 30 June k Thousand ANP Agência Nacional do Petróleo, Gás Natural e Biocombustíveis Karoon Karoon Energy Ltd and its subsidiaries LTI Lost time incident API American Petroleum Institute’s Invert