Karoon shares drop -4% on dusty ‘Who Dat’ well offshore Gulf of Mexico

Spare a thought for Karoon Energy (ASX:KAR) shareholders bullish on the company’s US offshore exploration activities in the lucrative Gulf of Mexico (GOM) – the company’s most recent well drilled has turned up a duster.

Called ‘Who Dat West’ (given its location to the west of a curiously named offshore platform in the GOM), Karoon (and the three other companies that oversee Mississippi Canyon Block 629) on Monday confirmed it had wasted time and money fishing where it did.

“Karoon Energy reports that the Who Dat West exploration well [has reached total depth] … drilling data confirmed that no significant hydrocarbon bearing intervals were present within the drilled section,” Karoon wrote on Monday.

“The well will now be plugged and permanently abandoned.”

It’s not exactly a fate uncommon for oil and gas explorers. After all, exploration requires failure for the successes to mean anything. But it’s a pretty good way to rattle the conviction of shareholders.

Some 2.4M shares for $3.58M in trades had swapped hands as at 1.35pm Sydney time on Monday per Morningstar data – though, compared to to the >700M on issue, that’s not too intense an indictment.

While Karoon’s 1Y returns are down -21.7%, it’s gained 17% in just the last month. Helping this is that at least four brokers are bullish on the stock.

Karoon briefly struck over $2.60/sh in October of 2023 but hasn’t since returned – and that’s the last time the stock broke above $2.50 in the last five years.

KAR last traded at $1.44.

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