KAR – Morgans rates the stock as Add

Given the high internal rate of return and fast payback period, Morgans saw little risk of the Patola oil field not reaching the announced final investment decision.

Management will hedge 40% of group production in the first year, and 30% in the second. The capex budget has been set at US$175-$185m. The Add rating is unchanged and the target price is increased to $1.90 from $1.80.

Sector: Energy.


Target price is $1.90.Current Price is $1.37. Difference: $0.53 – (brackets indicate current price is over target). If KAR meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).



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