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Karoon Energy Ltd KAR

Morningstar Rating
A$1.81 +0.02 (0.84%)
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Company Report

Production Guidance Lowered at Who Dat

Karoon Energy, formerly Karoon Gas Australia, listed on the ASX in June 2004 and spent the first 15 years or so of life raising equity to direct to petroleum exploration, including in the Browse Basin offshore Western Australia and in the Santos basin offshore Brazil. The company raised over AUD 850 million in new equity between 2004 and 2019, but the approximate AUD 300 million market capitalization in 2019 basically reflected simply the remaining net cash on balance sheet. No cash-generative assets had been delivered and no shareholder returns made.

Price vs Fair Value

KAR is trading at a 357% premium.
Price
A$1.80
Fair Value
A$6.74
Uncertainty
Very High
1-Star Price
A$6.38
5-Star Price
A$7.29
Economic Moat
Qcbdk
Capital Allocation
Wcbxhrlk

Bulls Say, Bears Say

Bulls

Karoon’s well-timed acquisition of the Bauna oil field has furnished it with healthy net operating cash flows and growth potential.

Bears

Bauna was purchased past its prime, in decline, with reserve life less than eight years and material capital expenditure ahead to maintain oil output.

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Trading Information

Previous Close Price
A$1.79
Day Range
A$1.781.82
52-Week Range
A$1.712.71
Bid/Ask
A$1.80 / A$1.81
Market Cap
A$1.45 Bil
Volume/Avg
4.0 Mil / 6.1 Mil

Key Statistics

Price/Earnings (Normalized)
4.21
Price/Sales
1.23
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Karoon produces around 8 million barrels of oil annually from its wholly owned Bauna field in Brazil’s offshore Santos basin. The company acquired Bauna from Petrobras in 2020 and has been steadily increasing production via well interventions and new developments. Field life is approaching eight years based on proven and probable 2P reserves of 55 million barrels at end December 2022, though this excludes a further 82 million barrels in 2C contingent resources which which have potential to increase life further. We credit life of approximately 10 years, assuming partial conversion of 2C contingent resources into reserve category with drilling. There are also prospective untested targets within Karoon’s permits which could potentially add further reserves in the medium term.
Sector
Energy
Industry
Oil & Gas E&P
Stock Style Box
Small Value
Total Number of Employees
12

Competitors

Valuation

Metric
KAR
BPT
WDS
Price/Earnings (Normalized)
4.219.329.46
Price/Book Value
1.081.101.04
Price/Sales
1.232.192.49
Price/Cash Flow
2.284.374.94
Price/Earnings
KAR
BPT
WDS

Financial Strength

Metric
KAR
BPT
WDS
Quick Ratio
1.030.860.72
Current Ratio
1.151.161.03
Interest Coverage
9.35−6.3312.63
Quick Ratio
KAR
BPT
WDS

Profitability

Metric
KAR
BPT
WDS
Return on Assets (Normalized)
13.74%6.27%5.81%
Return on Equity (Normalized)
43.96%9.66%9.38%
Return on Invested Capital (Normalized)
23.42%8.48%7.73%
Return on Assets
KAR
BPT
WDS
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