Karoon Energy Ltd · ASX:KAR
Karoon Energy — FY2023 Earnings Presentation
36 slides from Karoon Energy's earnings presentation, Aug 23, 2023
Slide 1: Full Year Financial Report – 2023 Financial Year
23 August 2023 Company Announcements Office ASX Limited Dear Sir / Madam Full Year Financial Report – 2023 Financial Year – ASX Release and Investor Presentation Enclosed are the following documents in relation to Karoon Energy Ltd’s full year financial report for the financial year ended 30 June 20
Slide 2: Full Year Results
se ©) Full Year Results 23 August 2023 | ASX: KAR Record production, underlying net profit after tax (NPAT)' up 70% to US$145.9 million YEAR TO 30 JUNE 2023 2022 % Change Production volume (MMbbl) 7.04 4.64 +52 Sales volume (MMbbIl) 7.06 4,54 +56 Weighted average net realised price (USS/bbl) 80.20 8
Slide 3: FY2023 Full Year Results Highlights
KAROON KAROON FY2023 FULL YEAR RESULTS bg ENERGY HIGHLIGHTS e FY23 underlying NPAT of USS$145.9 million, up 70% from FY22, driven by 52% lift in production following completion of Batina intervention campaign and Patola field development. e Statutory NPAT of US$163.0 million, compared to USS64.4 mil
Slide 4: Financial position remains strong
Karoon’s financial position remains strong. Despite spending cash of USS265.6 million on the Bauina intervention campaign, Patoladevelopmentand Neon drilling in FY23 andpaying the first Baina contingent consideration of USS84.5 million to Petrobras, no additional debt was drawn in FY23. Karoon ended
Slide 5: Financial Results for FY23
KAROON FY2023 FULL YEAR RESULTS FINANCIAL RESULTS FOR FY23 TABLE 1 - Financial Summary KAROON ENERGY YEAR TO 30 JUNE (USS million) 2023 2022* Sales revenue 566.5 385.1 Underlying EBITDA'2 321.8 205.2 EBITDA*4 308.5 (28.4) Net interest and other finance costs 6.0 5.7 Depreciation and amortisation3 86
Slide 6: FY23 Results Commentary
KAROON KAROON FY2023 FULL YEAR RESULTS bg ENERGY movements in deferred tax (see Table 2 for adjustments to derive underlying NPAT). The lift in FY23 underlying NPAT was primarily due to 47% higher sales revenue, reflecting a 56% increase in oil sales, which more than offset 5% lower realised oil pri
Slide 7: Reserves and Resources Update
KAROON FY2023 FULL YEAR RESULTS KAROON ENERGY 2C Contingent Resources at 30 June 2023 are 98.2 MMbbl, up 14% on the prior year. The increase in 2C Contingent Resources reflects the booking of additional 2C Contingent Resources at Batina associated with the potential FPSO life extension as well as ad
Slide 8: Conference Call
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 2023 Full Year Results on Wednesday, 23 August 2023 at 10am (Melbourne time). The conference call will be streamed live and can be accessed
Slide 9: Forward-looking statements
KAROON KAROON FY2023 FULL YEAR RESULTS bg ENERGY 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 explorati
Slide 10: Governance and Competent Person’s Statement
KAROON KAROON FY2023 FULL YEAR RESULTS bg ENERGY Governance and Competent Person’s Statement Members of the Karoon Reserves Committee considered and assessed all proposed changes and additions to the Company’s Reserves and Resources (as set out in this report), considering advice and contributions f
Slide 11: Karoon Energy
KAROON ENERGY
Slide 12: Disclaimer
Disclaimer KAROON ENERGY 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
Slide 13: FY2023 Highlights and Achievements
KAROON ENERGY : Julian Fowles CEO and Managing Director FY2023 Highlights and Achievements
Slide 14: FY23 Overview
FY23 Overview Established profitable production base to underpin growth Increased production and profitability > LTlrate of 0.10, TRIR of 0.411 > Production 7.04 MMbbl (+52% on FY22) > Average realised oil price US$80.20/bbI (-5% on FY22) > Sales revenue US$566.5 million (+47% on FY22) > Underlying
Slide 15: HSSE
HSSE Improved safety performance in FY23 Safety and Environmental Performance FY23 FY22 FY21 Lost Time Injuries 1 4 1 Restricted Work Cases 1 0 0 Medical Treatment Cases 2 fe} 1 Work Exposure Hours 1,947,000 1,027,000 __625,928 Total Recordable Injury Rate (per 200,000 hours) 0.41 O77 0.64 High Pote
Slide 16: Financial Results
KAROON ENERGY : Ray Church EVP and CFO Financial Results
Slide 17: FY23 Financial Highlights
FY23 Financial Highlights bie Strong financial outcomes in revenue, costs and cash REVENUE UNIT PRODUCTION COSTS UNDERLYING EBITDA US$566.5m (4) US$15.75/bbI(/) US$321.8m (4) Up 47% from US$385.1m Down 38% from US$25.36/bbl Up 57% from US$205.2m! CASHFLOW GENERATED INVESTING CASHFLOW CASH & CASH EQU
Slide 18: Underlying Result
Underlying result USS million FY23 FY22 Revenue 566.5 385.1 Other income 4l 0.8 Production Costs (incl FPSO depn & finance) (135.0) (117.6) Royalties and other government take (66.7) (41.5) DD&A incl O&G assets (86.4) (55.7) Impact of Inventory Movements (11.5) 6.4 Corporate, Exploration & Other (31
Slide 19: CAPEX
CAPEX Transitioning to capital light operating phase 250 200 150 (ussm) 100 50 97.0 5.0 FY22 mBatina intervention & Patola 238.4 190.9 27 FY23 "Exploration and evaluation NTM KAROON ENERGY Batina intervention and Patola development completed in FY23 Now through peak investment period of FY22 and FY2
Slide 20: FY23 Cash Flow
FY23 Cash flow Major projects and Neon drilling funded from operations ussm 800 Prod Spend Receipts (incl FPSO Lease Payment) 700 Royalties and other government take “ “ Corp 500 (26) (4) || 400 300 200 100 158 ° Opening cash &other Exp.&Eval Income tax (79) Hedge Costs — (13) 1. Adjusted for AASB16
Slide 21: Cash and Available Liquidity
Cash and available liquidity bie Increased production base with untapped borrowing capacity Debt and Liquidity as at 30 June 2023 Total Liquidity (USS Million) > Outstanding debt drawn USS30m, unchanged from 30 June 2022 with Batina interventions, Patola development and Neon control well drilling fu
Slide 22: Capital Allocation Framework
Capital Allocation Framework Building scale to achieve long term sustainable cashflow and shareholder returns ie) S a 0) 2 ° 2 = s Operating cash flow Maintain strong, flexible balance sheet Free cash flow Capital Returns Growth investment - Dividends - Organi portunities in Brazil - On market buyba
Slide 23: Unit Production Costs Reconciliation
Unit Production Costs Reconciliation bie Normalising Opex/bbl for AASB16 capitalised operating leases Cost of Production- Unit Back out . . FY23 Reported related Operating Production . . . AASB 16 Leases costs > Unit production costs include Operating costs (USS million) 62 62 operating costs as per
Slide 24: Reconciliation of Underlying Result to Statutory Result
Reconciliation of Underlying Result! to Statutory Result bie > Change in fair value of contingent consideration recognises movement each year due to revaluation of Petrobras contingent consideration USS million FY23 FY22 EBITDA NPAT EBITDA NPAT Reported financial results 308.5 163.0 (28.4) (64.4) >
Slide 25: Strategy and Outlook
we KAROON - ENERGY watt ccvesuseerssaasscessccacesacsassenaeecues seseuequsensenosaysganttberersceneeneeseeseessesseeseaesesseesteseeesetet et esegay : Julian Fowles CEO and Managing Director Strategy and Outlook
Slide 26: Strategic Priorities
Safe, reliable, responsible and cost-effective operations at Batina, in conjunction with our partners Assess technical and commercial feasibility of a potential Neon Foundation development, aiming for Concept Select entry decision in 1OCY 24, subject to viability Targeting value-accretive producing/
Slide 27: BM-S-40: Batina, Patola and Piracaba
ENERGY BM-S-40: Batina, Patola and Piracaba bie Interventions and Patola delivered on time and below revised budget BM-S-40 Piracaba SPS-87D Patola Legend: @® Producing Old @ oroscovery EE Production well ASX Release, Dec 22 Quarterly activities Report dated 24.01.23 SX Release dated 29.3.2023 “Seco
Slide 28: Batina Operating Performance
Batina operating performance bie ENERGY Focus on maintaining facilities uptime and active well management FPSO efficiency in FY23 100% > Karoon’s highest priority is maintaining safe and healthy work environment, and minimising environmental impact 80% 60% > Due to gas release from HP flare system,
Slide 29: Potential Neon Development
Potential Neon development Control wells drilled safely and below budget, feasibility studies underway Neon Wes KAROON ENERGY » Both Neon control wells successful, achieved pre-drill objectives: Interpreted Fld Zones Prospect Neon eel Gols > Neon-1 confirmed 39 API oil and oil-water contacts closely
Slide 30: Assessing Inorganic Growth Options
Assessing Inorganic Growth Options Evaluation ongoing > Continuing to actively assess inorganic growth opportunities > Rigorous and disciplined screening process used, with key criteria including: » Value accretive, with acceptable risk profile > Fundable >» Producing, or close to FID if pre-product
Slide 31: Scope Emissions Reduction and Net Zero
Progress with Batina FPSO Scope 1 emissions reduction achieved via installation of mooring buoy in FY22 and optimising vessel scheduling Expert consulta ppointed to assist with Batina facility monitoring and modelling, to identify further opportunities to reduce emissions and 2 GHG emissions for FY2
Slide 32: Guidance
Guidance! 6 months to 12 months to Period 31Dec 23 30 June 24 (TY23) (NTM) Low High Low High Production (MMbbl) 45 6.0 9 1 Costs Unit Production Costs (US$/bbl)* nN 15 n 15 Other Operating Costs (USS million?> 14 15 26 28 Business Development, share-based payments & Neon studies ae 6 8 12 14 (USS mi
Slide 33: Summary
Summary Focus on creating shareholder value > Significant progress on delivering strategic objectives in FY23, with production increase from 12,600 bopd to ~34,000 bopd at year end, unit cash cost reduced to US$15.75/bbl >» Production expected to increase to 9 - 11 MMbbl in NTM, with lower unit prod
Slide 34: Appendix 1: Royalty reduction, SP and R&D levies
Appendix 1: Royalty reduction, SP and R&D levies Royalties Special Participation rates > Tiered royalty reduction on incremental production from Batina interventions and Patola development applied from November 2022 Lower KAROON ENERGY Upper onwards > Historical 10% royalty rate applies to ANP’s! ba
Slide 35: Appendix 2: Contingent consideration on Batina Acquisition
Appendix 2: bie Contingent consideration on Batina Acquisition! > Contingent consideration of up US$285m plus interest payable Average Brent to Petrobras for Batina acquisition Price (in US$ units) _CY2022 CY2023 CY2024 CY2025 CY2026 Total > Contingent on annual average Platts Dated Brent oil price
Slide 36: Glossary
Glossary Term Definition 19 The period 1 January to 31 March AASB Australian Accounting Standards Board. ANP Agéncia Nacional do Petréleo, Gas Natural e Biocombustiveis. Batina Concession BM-S-40 containing the producing Batina, Piracaba and Patola light oil fields in Brazil. Boepd Barrels of oil eq