KAR – Citi rates the stock as Buy

Karoon Gas will farm down 50% of its North Carnarvon Basin permit to Apache, which will also become the operator. Citi considers the deal a good one for Karoon, given the remaining 10% share of costs in the exploration well to be drilled in the first half of 2015 will likely be funded by the US$9.05m seismic reimbursement.

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KAR – UBS rates the stock as Buy

Karoon’s Proteus-1 well in the Browse Basin has demonstrated good flow and condensate potential. The broker is increasingly confident in the greater Poseidon structure which is an important hurdle for commercial potential. UBS expects Karoon will look to sell a 10% stake at a premium to that received by JV partner ConocoPhillips, which sold a 20% stake in the field to PetroChina for an estimated US$371m.

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KAR – UBS rates the stock as Buy

Karoon’s Proteus-1 well in the Browse Basin has demonstrated good flow and condensate potential. The broker is increasingly confident in the greater Poseidon structure which is an important hurdle for commercial potential. UBS expects Karoon will look to sell a 10% stake at a premium to that received by JV partner ConocoPhillips, which sold a 20% stake in the field to PetroChina for an estimated US$371m.

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KAR – Citi rates the stock as Buy, Speculative

Citi analysts poignantly summarise the case for owning shares in Karoon Gas in their subtitle for today’s initiation of coverage report: "high risk but compelling upside". Their maiden price target of $10.77 comes with a lot of caveats as well, as the analysts admit they’ve tried to guesstimate future cash flows post anticipated funding/dilution to pay for both exploration and development.

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Karoon Remains An Exploration Play

Oil and gas exploration play Karoon Gas Australia (KAR) delivered disappointing results from its Kontiki-1 well, an outcome that has caused a de-rating of expectations in the market with respect to the potential value of the company. But according to Morgan Stanley, the current share price can be justified by resources already discovered by the company and a conservative valuation for the company’s remaining exploration acreage.

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Karoon A High Risk, High Reward Exploration Play

Oil and gas exploration is a high risk game but the upside from success can be significant, a case in point being Karoon Gas Australia (KAR). According to Bank of America-Merrill Lynch, which has initiated coverage on the stock with a Buy rating today, the pure exploration play offers potentially transformational growth given its substantial upcoming exploration program.

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