Karoon Energy Limited reported total production of 3.11 million barrels of oil equivalent (MMboe) on a net working interest basis for the March quarter.
Driven by a full period of production from the Who Dat assets in the U.S. Gulf of Mexico (GOM), production rose 18 percent quarter over quarter, Karoon said in its latest quarterly activities report.
On a net revenue interest (NRI) basis for the Baúna and Who Dat assets, the total production was 2.94 MMboe, the company said. The Bauna project is located in Brazil’s Santos Basin. Karoon CEO and Managing Director Julian Fowles noted that the increase in production “was achieved with no Lost Time or Recordable incidents in either Brazil or in the United States,” continuing the company’s safety performance over the past year.
Karoon’s sales revenue on an NRI basis for the quarter was $196.6 million, based on sales volumes of 2.74 MMboe.
Further, the company revised its guidance for 2024 from 11.2 – 13.5 MMboe to 10.5 – 12.5 MMboe. The revision primarily reflects a downgrade in Who Dat production, with most of the reduction related to lower-than-expected deliverability and oil production being prioritized over gas, according to the report.
Karoon said it is “in discussions with the operator to determine optimal mitigation strategies for the identified challenges and to maximize the value of Who Dat production”.
“Production on an NRI basis for Who Dat in the quarter was lower than forecast at 0.78MMboe,” Fowles said. “This was primarily due to delays in bringing the G2 and G4 wells online, lower well productivity than anticipated and bottlenecks in the G-manifold subsea production system. In addition, production from high-rate gas wells has been curtailed to prioritize oil production in the current low gas price environment, with the US Henry Hub gas price at its lowest level in more than 25 years. In the March 2024 quarter, oil, condensate and NGLs [natural gas liquids] comprised 68 percent of production, compared to approximately 60 percent anticipated”.
“We have reduced our forecast for Who Dat CY24 NRI production from 4 – 4.5 MMboe to 3 – 3.5 MMboe,” Fowles continued. “This reflects the recent well and facility performance and assumes the Joint Venture continues to prioritize higher value oil production over gas for the balance of the year, partly offset by ongoing production system optimization. Much of the reduction in production is in low value gas, with liquids now expected to comprise approximately 75 percent of [calendar year 2024] production. The Who Dat Joint Venture partners are in discussions to develop strategies to optimize production from existing and new wells going forward. Including Baúna, total production for CY24 is forecast to be in the range of 10.5 – 12.5 MMboe”.
“The Who Dat East exploration/appraisal well is expected to spud shortly, following the completion of its prior drilling commitments, and mobilization of the Noble Valiant drillship to site. The Who Dat South well, which will be drilled by the Seadrill West Neptune drillship, is also expected to commence drilling in the second quarter of 2024. Both these wells will test low-risk targets located in close proximity to the Who Dat production facility, with the potential to be tied-in in the event of positive commercial outcomes,” he added.
Who Dat is a conventional deepwater oil and gas operation located in approximately 2624.7 feet (800 meters) of water offshore Louisiana within the federal waters of the U.S. GOM. Earlier in the month, the Who Dat East appraisal/exploration well and the Who Dat South exploration well offshore were approved for drilling by their respective joint ventures. LLOG Exploration Company, L.L.C. is the operator of the assets.
Karoon in December 2023 acquired interests in the U.S. GOM from LLOG for $720 million. The acquired assets include a 30 percent working interest in the Who Dat and Dome Patrol oil and gas fields and associated infrastructure, an approximately 16 percent working interest in the Abilene field and varying interests in adjacent exploration acreage.
To contact the author, email rocky.teodoro@rigzone.com
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