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Highlights
- - Karoon Energy shares rise on the announcement of drilling activities in the US Gulf of Mexico.
- - Energy sector gains even as broader ASX 200 index sees a decline.
- - Who Dat West exploration well estimated to hold significant oil reserves.
Karoon Energy (ASX:KAR) saw its shares rise during early trading on the Australian Securities Exchange following the commencement of drilling at the Who Dat West exploration well in the Gulf of Mexico. The company holds a 35% stake in the venture, which is anticipated to unlock substantial oil reserves.
By mid-morning, Karoon's shares had climbed, reflecting positive sentiment around the announcement. At the same time, the broader ASX 200 index experienced a decline of approximately 0.4%, with the energy sector being the only segment to post gains. Other major energy players, including Beach Energy (ASX:BPT), Woodside Energy (ASX:WDS), Santos (ASX:STO), and Ampol (ASX:ALD), also recorded modest increases despite a downward trend in global crude oil prices.
The Who Dat West project, located in the US Gulf of Mexico, is expected to require around 50 days to complete the drilling and evaluation process. An independent expert estimates the prospect to contain approximately 77 million barrels of oil equivalent (MMboe), with Karoon's net revenue interest equating to a significant 21.6 MMboe.
The joint venture includes other US-based entities such as LLOG, Westlawn Americas Offshore, and Houston Energy. The project has an assessed geological probability of success at 36%, adding an element of calculated risk to the operation. Nonetheless, the potential for substantial reserves has bolstered market confidence in Karoon's strategic direction.
This development occurs amid a broader context of energy sector resilience, even as global crude benchmarks faced pressure. The uptick in sector performance underlines the ongoing importance of exploration activities and resource development for maintaining supply chains and meeting energy demands.
Karoon Energy’s continued focus on exploration and production positions it as a noteworthy player in the energy market. With this drilling project underway, industry stakeholders will closely monitor progress at Who Dat West for further updates.
As the exploration unfolds, the outcome will likely have a significant impact on both Karoon Energy and its partners, contributing to the broader energy landscape and market dynamics.
