Karoon Cuts 2026 Output Forecast After Gulf of Mexico Production Setback

Karoon Energy has lowered its 2026 production outlook after its U.S. Gulf of Mexico partner advised that production from the Who Dat field's E manifold will not be restored this year as previously anticipated.

The Australian oil and gas producer said operator LLOG Exploration Company informed the joint venture that additional technical analysis showed production through the E manifold cannot be reinstated in 2026. A remediation plan is being developed that includes removing the failed riser during the third quarter of 2026, with production from the affected infrastructure now expected to resume in the second half of 2027, subject to laboratory analysis.

The setback prompted Karoon to significantly reduce its production expectations from the Who Dat field. The company now expects 2026 production from the asset of between 1.2 million and 1.5 million barrels of oil equivalent (MMboe) net revenue interest (NRI), down from previous guidance of 2.1 million to 2.5 MMboe.

As a result, Karoon lowered its total company-wide production guidance for 2026 to between 7.2 million and 8.2 MMboe, compared with its previous forecast of 8.1 million to 9.2 MMboe. Production guidance for its Brazilian operations remains unchanged.

Who Dat is currently producing approximately 3,000 barrels of oil equivalent per day on a net basis. Karoon said development activity at the field continues, with production from the A-1 sidetrack well expected to begin by mid-year. Operations on the G-1 sidetrack well remain scheduled for the fourth quarter of 2026, pending final approvals to accelerate the project.

The company also provided an update on its Baúna field offshore Brazil, where intervention work on the SPS-92 and PRA-2 wells has faced mechanical issues and weather-related delays. Despite the setbacks, Karoon said both wells are still expected to return to production around mid-year as previously planned.

The revision highlights the operational risks associated with offshore production systems, particularly in mature deepwater assets where infrastructure failures can materially affect output. Who Dat, located in the U.S. Gulf of Mexico, became a core producing asset for Karoon following its acquisition from LLOG affiliates in 2024 as part of the company's strategy to diversify beyond Brazil.

Karoon said it is reviewing and optimizing its 2026 capital expenditure commitments across the Baúna and Who Dat assets, as well as other projects, in response to the latest developments.

By Charles Kennedy for Oilprice.com