The second quarter not only was Karoon Energy's first sales result, but also according to Morgans completes the evolution from global explorer into mid-tier oil producer, following finalisation of the Bauna acquisition.

Post intervention of Bauna and development of Patola, the company expects to be producing 25-30kbopd in 2023 (in line with the broker's forecasts). Kbopd is defined as a thousand barrels of oil per day.

Having already paid the US$50m deposit for Bauna, and US$150m upfront consideration, an estimated US$44m payment is set to be paid in May 2022. The remainder of the consideration is a series of annual contingent payments.

Morgans decreases the target price for Karoon Energy to $1.63 from $1.64 and the Add rating is unchanged. 

Sector: Energy.

Target price is $1.63.Current Price is $1.01. Difference: $0.62 - (brackets indicate current price is over target). If KAR meets the Morgans target it will return approximately 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena