Karoon Energy has successfully renegotiated the Bauna deal with Petrobras. This results in a -40% reduction in acquisition costs.
Macquarie does not expect shareholders will receive a special dividend or capital return, given the completion of the deal. Cash will be needed for expenditure on the asset to boost production rates.
Macquarie retains an Outperform rating and raises the target to $1.25 from $0.90.
Target price is $1.25.Current Price is $0.74. Difference: $0.51 – (brackets indicate current price is over target). If KAR meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges – negative figures indicate an expected loss).