Boosted by quarterly updates, these energy shares jumped strongly.
Bannerman Energy Limited (ASX: BMN)
Bannerman Energy Limited (ASX: BMN) has made significant progress on the Etango Uranium Project during the December 2024 quarter, with key construction and early works activities advancing on schedule. Bulk earthworks are on track, including the successful completion of the primary crusher site’s first blast. Essential infrastructure such as the construction water supply and storage dam were completed on time, ensuring continuity for ongoing bulk earthworks. Additionally, the manufacturing of long-lead items like the High-Pressure Grinding Rolls (HPGR) tertiary crusher is ahead of schedule. Detailed engineering for the processing facilities is progressing well, and critical construction power and water supply contracts are being executed effectively.
The company’s financing efforts for the Etango Project continue to move forward, evaluating both conventional and strategic funding options to support development. Discussions with various counterparties, guided by Bannerman’s strong financial position and cash reserves, aim to secure favourable terms and mitigate project risk. Bannerman is working with advisors to execute an optimal funding mix, which will balance shareholder returns with funding flexibility. Offtake agreements are a key part of these efforts, which will help secure the project’s financial foundation for the long term.
Market conditions for uranium remain positive, with prices reaching a 15-year high of US$82/lb U3O8 by the end of the quarter, driven by global demand for nuclear energy. Supply constraints, exacerbated by geopolitical tensions and mine disruptions, have highlighted the need for secure and diversified uranium sources. Despite softening spot prices, the long-term outlook remains strong, supported by increasing investments in nuclear energy worldwide. Bannerman’s Etango Project is well-positioned to capitalize on this demand, as the company aligns its development with the global energy transition and decarbonization goals. The project's success would help meet the rising need for secure, long-term uranium supplies.
Karoon Energy Ltd (ASX: KAR)
Karoon Energy Ltd (ASX: KAR) delivered a mixed but strategically significant fourth-quarter 2024 (4Q24) operational update. While production on a Net Revenue Interest (NRI) basis declined 3% quarter-over-quarter to 2.59 MMboe, annual NRI production reached a record 10.4 MMboe. Sales volumes surged 53% in 4Q24 to 3.14 MMboe, driven by the timing of Baúna liftings, resulting in record annual sales revenue of US$776.5 million. Operational challenges impacted the quarter, including a 12-day FPSO shut-in at Baúna and adverse weather in the US Gulf of Mexico. FPSO efficiency remained below expectations at 84.5%, though the company is actively addressing maintenance backlogs to improve reliability. A flotel-supported campaign is set to commence soon, aiming to enhance Baúna's production systems. Meanwhile, Karoon is negotiating with Altera & Ocyan to acquire the Baúna FPSO, a move expected to provide greater operational control and cost efficiencies.
In exploration, Karoon concluded its Gulf of Mexico drilling program with two out of three wells yielding success. The Who Dat East 2C Contingent Resource estimate was revised up 190% to 15.7 MMboe, and further evaluation is underway at Who Dat South following positive results. Development studies for Who Dat East and South have commenced, underscoring the potential for future production growth. Looking ahead, initial 2025 production guidance stands at 9.0 – 10.5 MMboe, with capex projected between US$99 – 117 million, excluding a potential FPSO acquisition. The company expects to mitigate natural declines through planned well interventions and production system optimizations, particularly at Who Dat.
Financially, Karoon significantly strengthened its balance sheet, reducing net debt from US$104 million to US$9 million by year-end, despite an active exploration program and share buybacks. With capital discipline in focus, the Board has authorized an additional US$75 million in buybacks for 2025, supplementing prior buybacks totaling US$50 million in 2024. Overall, Karoon’s strong cash flow, operational improvements, and strategic developments—particularly in Brazil and the Gulf of Mexico—position it well for sustained shareholder value creation. Investors will be closely watching updates on the FPSO acquisition, the Neon field development decision, and further resource upgrades at Who Dat.
Source: Company’s Report
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