Karoon Energy Sets Higher 2025 Budget as Neon Oil Field Progresses

Highlights 

• Karoon increases 2025 capex guidance for Neon oil project 
• Planned investment ahead of final investment decision 
• Q1 output dips due to Baúna maintenance 

Karoon Energy (ASX:KAR) has revised its capital expenditure outlook for 2025, with plans to allocate between $US105 million and $US125 million ($165 million to $197.2 million). The adjustment comes amid increased development activity at its Neon oil field project offshore Brazil. 

A portion of the revised budget—ranging from $US7 million to $US10 million—has been earmarked specifically for pre-development work on the Neon field. This phase includes activities such as finalizing the number of production wells and progressing a farm-down process to potentially bring in a joint venture partner ahead of the final investment decision (FID). 

The Neon field, located near Karoon’s existing offshore infrastructure, represents a strategic expansion opportunity for the company. The early-stage investment aims to de-risk the asset and set the foundation for a full-scale development. While a definitive timeline for the FID has not been disclosed, the updated spending plan suggests a clear push toward advancing the project. 

In parallel with this forward-looking investment, Karoon reported a 9 per cent decline in production for the first quarter of 2025 compared to the same period last year. The decrease was attributed to scheduled maintenance at the Baúna oil project, also located offshore Brazil. While temporary, the planned shutdown impacted overall output in the near term. 

Karoon’s decision to increase its budget highlights the company’s focus on long-term value creation through the development of its asset portfolio. Despite the short-term dip in production, the renewed emphasis on Neon positions the company to potentially boost future output once the project reaches production stage. 

Analysts and market watchers are closely monitoring Karoon’s next steps, particularly around the farm-down process and progress toward an FID. The company’s offshore developments are seen as a critical component of its growth strategy in a competitive energy sector. 

Karoon Energy continues to navigate industry challenges while making strategic commitments to its asset base. With attention turning to the Neon oil field and preparations underway for the next phase, 2025 is shaping up to be a pivotal year in its operational roadmap.