KAR: 2026 production guidance revised down

Research evidence excerpt

KAR: 2026 production guidance revised down

.4x 4.1x 4.7x

Brazil 2026 production guidance remains unchanged at 6 to 6.7 mmboe, EPS, Adj Basic: US$/sh

despite the Baúna SPS-92 and PRA-2 intervention programs suffering Production:Free Cash Flow:Net US$mto Karoon

mechanical issues and weather delays. Karoon expects both wells to be AllPricedmarketas ofdatapriorintradingAUD; allday'sfinancialmarketdataclose,in USD;EST dividends(unless otherwisepaid in AUD.noted).

online around mid-year, implying the bulk of the intervention work has now

been completed. Brazilian regulator (ANP) production data to date implies

Baúna June quarter production of ~0.78mmboe, suggesting only 1 oil cargo

may be shipped from the project in the June quarter.

Investment expenditure review. Karoon is planning to optimise its 2026

investment expenditure in order to maintain prior guidance. Capex will now

probably be higher than what Karoon previously anticipated over 1H 2026,

but Karoon hopes to lower this in 2H 2026. Our forecast for 2026 full-year

capex to be at the top end of Karoon guidance is unchanged.

Oil price sensitivity. A US$10/bbl decrease in our Brent oil price forecast

leads to a 27% reduction in our Karoon 2027 EPS forecast. We note Karoon

remains fully unhedged.

Changes to our 2026 forecasts. We are now forecasting Karoon total

2026 production of 7.5 mmboe (prior 8.3 mmboe). This is based on Who

Dat forecast production at 1.3 mmboe (RBC prior 2.0 mmboe was below

company guidance), and Brazil Baúna forecast production at 6.2 mmboe

(RBC prior 6.4 mmboe). This has reduced our Karoon 2026 NPAT forecast

by 24%, and our free cash flow by 48%. As a result, we have lowered our

DCF by 1% to $2.27/sh.

Disseminated: Jun 16, 2026 08:58EDT; Produced: Jun 16, 2026 08:58EDT

For Required Non-U.S.