Karoon Energy (ASX:KAR) said an electrical fault has been confirmed at its SPS-92 well at the Baúna project in Brazil, prompting it to cut its 2026 full-year production guidance to 5.4 million to 5.7 million barrels from 6 million to 6.7 million barrels, according to a Monday Australian bourse filing.
The company said it shut down the well in a controlled manner on Sept. 22 to preserve pump integrity and investigate the system, with the pump now operating on two phases in a conservative manner to maintain safe operations.
Karoon believes a rig-based well intervention will be needed to replace the faulty cabling and restore full operability, and has started intervention planning, with timing dependent on securing permits and services, and about 3,500 barrels of oil per day expected to be deferred until the repair.
The production deferral is currently not expected to affect Baúna reserves, while Karoon believes its insurance program may partially offset lost production revenue and reimburse substantially all intervention and repair costs, subject to deductibles, policy terms and insurer confirmation, the filing added.
Total 2026 production is now expected at 6.6 million to 7.2 million barrels of oil equivalent, with unit production cost guidance raised to $15 to $16 per barrel of oil equivalent, Karoon Energy added.
The company's shares tumbled 12% in recent Monday trade.
