Australian oil and gas producer Karoon Energy Ltd. has restored production at its SPS-92 well within the offshore Baúna Project in Brazil’s Santos Basin, paving the path for a major production rebound in the second half of 2026.
The well is currently flowing at a robust rate of 8,600 barrels of oil per day (bopd) following a rig-based well intervention to replace a failed electrical submersible pump. The pump failed in August 2024, reducing the daily production rate to 4,500 bopd.
The successful restart has lifted total Baúna Project production to approximately 20,500 bopd. Output is expected to climb by a further 1,000 to 2,000 bopd once the nearby PRA-2 well is reconnected to the network.
While the intervention successfully reinstated a high-margin revenue stream, Karoon revealed that final execution costs exceeded internal budgets.
Complex wellbore debris, equipment-related non-productive time, and weather delays pushed total expenditure higher, prompting a revision to the company’s full-year 2026 capital expenditure (capex) guidance.
Total group capex guidance has adjusted upward to between US$178 million and US$202 million. This reflects an increase in Baúna capex to US$89 million to US$97 million, which was partially offset by decreased spending estimates and lower contingencies at the company’s Who Dat asset in the US Gulf of Mexico.
Karoon CEO Carri Lockhart said the completion of the major maintenance campaign marks a pivotal commercial turning point for the company.
“Successfully completing the FPSO flotel revitalisation campaign and restoring production from SPS-92 marks our transition from a period of high investment to one of expected strong cash flow generation,” Lockhart said.
“We enter the second half of 2026 with materially higher production and a stronger operating platform.”
With major remediation works wrapped up, Karoon expects sustaining capital requirements at Baúna to remain low for the next few years.
The operation is positioned to leverage annualized cost savings of US$30 million to US$40 million following its recent operatorship transition.
“The capital we invested this year strengthens the long-term value of Baúna and reinforces our confidence in maintaining its low operating cost break-even and cash-generating capacity,” Lockhart said.
