Karoon Energy, an ASX-listed oil and gas exploration and production company, has recently confirmed significant advancements in operating efficiency at its floating production, storage, and offloading (FPSO) unit, notably the FPSO Cidade de Itajai, situated in the oil-rich Baúna field off Brazil’s coastline.
In a noteworthy achievement, the FPSO unit reached an operating efficiency of 97.2% during the second quarter of 2026, exceeding its target range of 90-95%. This marks an improvement from the 96.1% efficiency recorded in the first quarter. Following a revitalization and maintenance campaign, this efficiency gain has reinstated approximately 10,000 barrels of oil equivalent per day (bopd) in production. The revitalization efforts were prompted by earlier well interventions, including those at the SPS -92 and PRA -2 wells.
During the second quarter, Karoon produced 1.08 million barrels of oil equivalent (boe) at an average rate of 9,202 bopd. This represents a decline from the 17,350 bopd reported in the first quarter, primarily due to a planned 28-day maintenance shutdown and associated interventions at key production wells. Despite this, the company’s revenue surged to $116.4 million, driven by significantly elevated realized oil prices.
The Baúna field’s total production capacity currently stands at approximately 22,000 bopd. The FPSO Cidade de Itajai itself boasts a nameplate capacity for fluid handling of around 80,000 barrels per day, along with oil storage capabilities of approximately 631,000 barrels. Notably, two cargoes totaling 0.98 million barrels were lifted during the quarter, with the average realized price hitting $94.56 per barrel—an impressive 33% increase from the prior quarter as global oil prices surged.
Several key milestones were achieved in the second quarter. There was a successful transfer of FPSO operatorship, along with the completion of planned maintenance, inspections, and essential upgrades, including hull inspections and production header replacements. The revitalization campaign, supported by a floatel, also concluded successfully by June 2026.
Post-maintenance, Karoon successfully restored production at the SPS -92 well, while the PRA -2 well was reactivated after reconnecting the umbilical to the electrical submersible pump. This restoration means that all production wells related to the Baúna project are now operational, significantly enhancing the field’s output capabilities.
CEO Carri Lockhart expressed confidence in the company’s operational strategies, stating, “At the start of 2026, we embarked on a clear and ambitious program to strengthen Karoon’s operations at Baúna. In the second quarter, we delivered these commitments effectively.”
Lockhart elaborated further, emphasizing that recent transitions have led to a stronger operational platform, lower costs, and enhanced cash generation capabilities moving forward. “We completed our largest maintenance and revitalization program in the company’s history, which establishes a foundation for increased operational efficiency,” he said.
Karoon completed the acquisition of the Baúna and Piracaba oil fields and the Patola discovered resource in November 2020, acquiring 100% of concession BM-S-40 from Petrobras for $380 million. This acquisition came with contingent payments that could total up to $285 million, based on future realized oil prices between 2022 and 2026. The Baúna project comprises 12 subsea wells, with two Patola wells brought online in 2023. The crude oil produced from Baúna is known for its high quality, ranging from 33 to 38 API, and is marketed through an agreement with Shell Western Supply and Trading.
Looking ahead, Lockhart reiterated the firm’s expectations of robust free cash flow in the latter half of 2026, contingent on oil prices averaging between US$60 and $70 per barrel and continued adherence to operational performance guidance. The ongoing focus on operational excellence and efficiency stands as a testament to Karoon’s commitment to leveraging its resources beneficially in the dynamic oil market.