Karoon Energy announces that its wholly owned subsidiary, Karoon Petróleo & Gás Ltda., has completed the acquisition of a 100% operating interest in the Baúna field (Concession BM‐S‐40) located in the Santos Basin, offshore Brazil.

As previously announced, under the terms of the amended Sale and Purchase Agreement (“SPA”), the Purchaser is obliged to pay US$380 million of “firm” consideration and up to US$285 million of “contingent” consideration(1).

Pursuant to the SPA, the Purchaser paid US$150 of the “firm consideration” at closing (in addition to the US$49.9 million deposit already paid at the signing of the SPA), which was fully funded from available cash. It is expected that future payments in respect of the remaining “firm” and “contingent” consideration will be funded from Karoon’s existing cash and organic cashflows from the Baúna asset.

The acquisition delivers Karoon a quality production asset supported by prudent funding arrangements. Baúna remains cash flow positive at current oil prices.

Robert Hosking, Karoon’s Managing Director, said he was delighted to complete the acquisition which is fully aligned with Karoon’s strategy to acquire a producing asset and that Karoon is delighted to commence operating the Baúna asset.

“We are delighted to finally assume operatorship of the Baúna asset which will enable Karoon to transform from an oil and gas exploration company to a substantial oil production company. We are looking forward to continue running the Baúna field in a safe and efficient manner while seeking to realise the full value of the field for our shareholders via our planned workovers of Baúna’s underutilised production infrastructure and the development of the Neon and Patola fields.” 

(1) This excludes an amount of US$50 million that is payable by the Purchase in the event the average Brent oil price exceeds US$100 in calendar year 2020.

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