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Karoon Energy Ltd
(Sydney:KAR)
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Rating:71Outperform
Price Target:
AU$2.00
▲(15.61% Upside)
Action:Upgraded
Date:08/27/26
The score is driven primarily by solid underlying financial health (strong margins and moderate leverage) but tempered by inconsistent free cash flow and recent revenue pressure. Valuation is a clear positive (low P/E and decent yield). The latest earnings call supports a constructive outlook with expected H2 cash uplift and cost savings, while technical indicators remain neutral and do not add strong confirmation.
Positive Factors
Strong Profitability
Healthy gross and net margins demonstrate that Karoon retains meaningful earnings power despite volatile oil prices. This profitability provides a durable base for funding operations, development spending and shareholder distributions across the commodity cycle.
Negative Factors
Declining Revenue and Production
Recent revenue and production pressure shows Karoon remains exposed to field performance, workover schedules and realized oil prices. Continued volume weakness would reduce operating leverage and make earnings less predictable even if margins remain healthy.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Profitability
Healthy gross and net margins demonstrate that Karoon retains meaningful earnings power despite volatile oil prices. This profitability provides a durable base for funding operations, development spending and shareholder distributions across the commodity cycle.
Read all positive factors
Karoon Energy Ltd (KAR) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.21B
Dividend Yield3.19%
Average Volume (3M)4.27M
Price to Earnings (P/E)7.4
Beta (1Y)0.20
Revenue Growth-19.58%
EPS Growth-39.27%
CountryAU
Employees167
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.17
Shares Outstanding698,172,550
10 Day Avg. Volume4,311,452
30 Day Avg. Volume4,272,279
Financial Highlights & Ratios
PEG Ratio1.45
Price to Book (P/B)1.12
Price to Sales (P/S)1.83
P/FCF Ratio-31.04
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$1.89Price Target Upside9.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.16
Revenue Forecast (FY)AU$584.17M
Karoon Energy Ltd Business Overview & Revenue Model
Company Description
Engaged in the exploration and production of oil and natural gas, Karoon Energy Ltd maintains operations across Australia, Brazil, and Peru. Its key interests comprise a full 100% stake in five offshore blocks situated in Brazil's Santos Basin, of...
How the Company Makes Money
Karoon Energy primarily makes money by producing and selling crude oil from its operated and non-operated upstream (exploration and production) assets. Revenue is generated when produced volumes are lifted and sold to buyers (typically under spot ...
Karoon Energy Ltd Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2026)
| Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call reflects an investment-heavy half focused on executing a major FPSO operatorship transition and revitalization program that temporarily reduced production and cash, but materially de-risked operations and reset the cost base. Strong realized commodity pricing, high FPSO uptime (97%), sanctioning of the high-return Who Dat East project (Karoon WI 40%), substantial liquidity (USD 363.6M) and continued shareholder returns (dividend and buybacks) support a positive outlook. Near‑term headwinds include the Who Dat E riser remediation, a temporary Brazilian export tax, residual transition costs and timing uncertainty on Neon and exploration farm‑downs; however, management expects USD 30–40M p.a. run‑rate cost savings from operatorship and stronger free cash flow in H2 2026 as benefits of the first-half investments are realized.Positive Updates
Strong Operational Recovery and FPSO Efficiency
Baúna FPSO efficiency reached 97% in H1 2026 (96% in Q1), exceeding the 90%–95% target range; restoration of production from SPS-92 and PRA-2 and resumption of water injection begun, supporting near‑term reservoir management and asset integrity.
Negative Updates
Planned Production Decline and Revenue Impact
Production on a net working interest basis was 3.17 million BOE and sales 3.08 million BOE; revenue declined by USD 63.4 million in H1 principally due to planned FPSO and well workovers which reduced Baúna production (revenue impact USD 66.5M) and lower Who Dat volumes (revenue impact USD 39.0M).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Operational Recovery and FPSO Efficiency
Baúna FPSO efficiency reached 97% in H1 2026 (96% in Q1), exceeding the 90%–95% target range; restoration of production from SPS-92 and PRA-2 and resumption of water injection begun, supporting near‑term reservoir management and asset integrity.
Read all positive updates
Company Guidance
Management maintained its capital-allocation and operational guidance while flagging materially stronger H2 cash generation as Baúna production is restored and FPSO operatorship savings flow through: they expect direct production cost reductions of USD30–40m p.a., H2 2026 capital spend to be materially lower than H1 (when ~USD184m of investing, financing and FX outflows occurred), and higher produced volumes to reduce leverage from the reported 21% gearing and current liquidity of USD363.6m (cash USD80.3m + undrawn RBL USD283.3m). The company reaffirmed its 20–40% underlying NPAT dividend policy (interim dividend AUD0.012/share) and ongoing buybacks (2026 YTD >USD30m, ~24m shares, including a >USD15m tranche post‑30 June). Project guidance includes Who Dat East (Karoon WI 40%) share of capex USD155–165m, first oil H2 2028, initial net production ~6,000 BOE/d and a mid‑case post‑tax IRR >20%; near-term activity also includes a Who Dat G1 sidetrack planned in Q4 2026 (first oil targeted H1 2027). Operational and financial metrics underpinning the guidance: H1 production 3.17MM BOE (sold 3.08MM BOE), revenue USD244.9m, underlying NPAT USD29.2m, Baúna FPSO efficiency ~97% (Q2), realized liquids ~USD80.65/BOE (Baúna USD80.66, Who Dat USD80.60), gas USD6.35/Mcf, operating cash flow USD58.4m, and sustainability/safety metrics of 0 recordable injuries, 5 high‑potential incidents and Scope 1&2 intensity 14.6 kg CO2e/BOE.Karoon Energy Ltd Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2026 | Dec 2025 | Dec 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 633.09M | 628.65M | 776.50M | 847.00M | 842.19M | 531.00M |
| Gross Profit | 233.28M | 258.12M | 587.80M | 495.20M | 406.60M | 257.97M |
| EBITDA | 341.45M | 364.73M | 506.90M | 636.53M | 586.79M | -83.26M |
| Net Income | 126.18M | 125.51M | 127.50M | 251.29M | 242.33M | -88.87M |
Balance Sheet | ||||||
| Total Assets | 1.77B | 1.77B | 1.94B | 1.93B | 1.79B | 1.69B |
| Cash, Cash Equivalents and Short-Term Investments | 206.24M | 206.12M | 341.20M | 170.02M | 112.37M | 229.31M |
| Total Debt | 339.43M | 338.83M | 511.20M | 487.80M | 275.70M | 316.03M |
| Total Liabilities | 741.60M | 741.16M | 965.10M | 1.02B | 1.08B | 1.29B |
| Stockholders Equity | 1.03B | 1.03B | 976.40M | 911.94M | 711.49M | 401.66M |
Cash Flow | ||||||
| Free Cash Flow | -11.20M | -37.10M | 213.70M | -435.60M | -73.44M | 55.37M |
| Operating Cash Flow | 251.41M | 251.42M | 434.60M | 311.29M | 450.76M | 204.69M |
| Investing Cash Flow | -289.20M | -288.52M | -218.60M | -746.90M | -356.20M | -112.95M |
| Financing Cash Flow | -100.96M | -100.51M | -37.20M | 533.15M | -34.20M | -15.50M |
Karoon Energy Ltd Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | AU$1.21B | 7.39 | 12.15% | 3.02% | -19.58% | -39.27% | |
67 Neutral | AU$417.00M | 32.74 | 14.04% | 13.64% | -23.44% | -18.10% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
57 Neutral | AU$41.80M | -1.03 | -129.02% | ― | -59.94% | -297.26% | |
52 Neutral | AU$187.85M | -35.71 | -0.67% | ― | ― | -149.12% | |
47 Neutral | AU$1.79B | -23.69 | -8.63% | ― | ― | ― | |
43 Neutral | AU$339.13M | -13.91 | -12.35% | ― | ― | 25.55% |
* Energy Sector Average
AU:KAR
Karoon Energy Ltd
1.70
-0.02
-1.45%
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Australis Oil & Gas
0.03
0.02
200.00%
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Carnarvon Energy Limited
0.10
0.00
0.00%
AU:BTL
Empire Energy Group Limited
0.24
-0.06
-20.00%
AU:HZN
Horizon Oil Limited
0.23
0.05
25.00%
AU:TBN
Tamboran Resources Limited
0.26
0.11
71.05%
Karoon Energy Ltd Corporate Events
Karoon Energy Director Melissa Holzberger Boosts Indirect Shareholding
Aug 27, 2026
Karoon Energy director Ms Melissa Holzberger has increased her indirect shareholding in the company through SNJD Holdings Pty Ltd, lifting her interest from 24,492 to 39,069 ordinary fully paid shares. The shares were acquired via an on-market tra...
Karoon Energy Declares Interim Dividend for June 2026 Half-Year
Aug 27, 2026
Karoon Energy Ltd has declared a fully franked interim dividend of AUD 0.012 per ordinary share, covering the six‑month period ended 30 June 2026. The stock will trade ex‑dividend on 2 September, with a record date of 3 September and p...
Karoon Energy Details 2026 Half-Year Performance and Strategic Focus
Aug 27, 2026
Karoon Energy has released its 2026 half-year report, presenting directors’ commentary, audited financial statements and detailed cash flow, equity and profit or loss information for the period. The report underscores the company’s eff...
Karoon Energy Flags Uncertainties as It Positions for Growth After First Half 2026
Aug 27, 2026
Karoon Energy has released its first half 2026 results presentation, positioning the period as a phase of delivering its operational platform and preparing for stronger cash generation and growth. The release underscores that its reserves and reso...
Karoon’s Baúna Spend Weighs on 1H Earnings but Sets Up Stronger Second Half
Aug 27, 2026
Karoon Energy reported first-half 2026 sales revenue of US$244.9 million and underlying net profit of US$29.2 million, as a major capital program at the Baúna field in Brazil temporarily reduced production but completed key upgrades and well ...
Karoon Energy Cancels 3.4 Million Shares in On‑Market Buy‑Back
Aug 14, 2026
Karoon Energy has cancelled 3,424,143 ordinary fully paid shares following an on‑market buy‑back completed on August 11, 2026. The reduction in issued capital reflects a capital management initiative aimed at adjusting the company̵...
Karoon Energy Sanctions Who Dat East Development in Gulf of Mexico
Aug 11, 2026
Karoon Energy’s Who Dat East joint venture, operated by LLOG, has approved the final investment decision for developing the Who Dat East field in the Gulf of Mexico, marking a significant step in the company’s U.S. growth strategy. The...
Karoon Energy Updates Market on Ongoing On-Market Share Buy-Back
Aug 9, 2026
Karoon Energy has provided an updated notification on its on-market share buy-back program involving its ordinary fully paid shares listed on the ASX under the ticker KAR. The filing confirms that the company continues to actively repurchase stock...
Karoon Energy Cancels 4.8 Million Shares After On-Market Buy-Back
Aug 7, 2026
Karoon Energy Ltd has cancelled 4,759,357 ordinary fully paid shares following completion of an on-market share buy-back, effective 5 August 2026. The reduction in issued capital is expected to enhance capital management efficiency and may support...
Karoon Energy Updates ASX on Progress of On-Market Share Buy-Back
Aug 6, 2026
Karoon Energy Ltd has issued an updated notification to the ASX confirming ongoing on-market buy-backs of its ordinary fully paid shares under the code KAR, as part of a previously announced program. The latest daily report shows the company had r...
Karoon Energy Updates ASX on Progress of On-Market Share Buy-Back
Aug 4, 2026
Karoon Energy Ltd has issued an updated notification to the ASX detailing daily activity under its on-market share buy-back program for ordinary fully paid shares. The update, dated 5 August 2026, reports that a total of 802,172 shares were repurc...
Karoon Energy Updates ASX on Progress of On-Market Share Buy-Back
Aug 3, 2026
Karoon Energy Ltd has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for ordinary fully paid shares under the code KAR. The latest daily update, dated 4 August 2026, reports that a total of 8,142...
Karoon Energy seeks ASX quotation for additional ordinary shares
Aug 3, 2026
Karoon Energy has applied for quotation of an additional 49,747 ordinary fully paid shares on the Australian Securities Exchange, with an issue date of 28 July 2026. The modest increase in quoted securities reflects routine capital management acti...
Karoon Energy trims capital base with share buy-back and lapsed performance rights
Aug 3, 2026
Karoon Energy has cancelled 4,397,413 ordinary fully paid shares following an on-market buy-back completed on July 30, 2026. The company also allowed 74,052 performance rights expiring in April 2029 to lapse after conditions attached to those righ...
Karoon Energy Updates Market on Ongoing Share Buy-Back Activity
Aug 2, 2026
Karoon Energy Ltd has issued an updated notification to the ASX confirming ongoing on-market buy-back activity in its ordinary fully paid shares, under a program initially announced on 29 June 2026. The latest daily update, dated 3 August 2026, re...
Karoon Energy Continues Daily On-Market Share Buy-Back
Jul 30, 2026
Karoon Energy Ltd has issued an updated notification to the ASX confirming continued execution of its on-market share buy-back program for ordinary fully paid shares, coded KAR. The latest daily filing, dated 31 July 2026, reports a cumulative tot...
Karoon Energy Reports Daily Progress on On-Market Share Buy-Back
Jul 29, 2026
Karoon Energy Ltd has provided an updated notification to the ASX on its ongoing on-market share buy-back program for its ordinary fully paid shares. The company reported a cumulative total of 4,397,413 shares repurchased prior to the latest day a...
Karoon Energy Ramps Up On-Market Share Buy-Back Activity
Jul 27, 2026
Karoon Energy has provided an updated notification of its on-market share buy-back, disclosing that a total of 378,713 ordinary fully paid shares had been repurchased before the previous day. The company reported that it bought back a further 2,55...
Karoon Energy Reports Daily Activity in On-Market Share Buy-Back
Jul 23, 2026
Karoon Energy Ltd has issued an updated notification to the ASX confirming the ongoing execution of its on-market share buy-back program. The latest daily update reports that 378,713 ordinary fully paid shares were repurchased on the previous trad...
Karoon Energy boosts Baúna output and eyes stronger cash flow amid disciplined growth
Jul 22, 2026
Karoon Energy has completed a major revitalisation of the Baúna FPSO and transitioned operatorship, lifting efficiency to 97% and restoring total Baúna output to about 22,000 barrels per day. Second-quarter production reached 1.08 millio...
Karoon Energy Responds to Extension of Brazilian Crude Export Tax
Jul 10, 2026
Karoon Energy has highlighted a regulatory shift in Brazil, where the government has extended for 60 days a temporary 12% tax on crude oil exports that had been due to expire on 9 July 2026. The extension adds cost pressure to Brazilian producers,...
Karoon Energy Seeks ASX Quotation for New Ordinary Shares
Jul 9, 2026
Karoon Energy Ltd has applied to the ASX for quotation of 135,626 new ordinary fully paid shares, to be listed under its existing KAR code. The new securities, issued on 1 July 2026 following the exercise or conversion of existing rights, represen...
Karoon Energy Launches On-Market Share Buy-Back Program
Jun 29, 2026
Karoon Energy Ltd has announced a new on-market share buy-back of its ordinary fully paid shares, indicating it will repurchase stock directly through the ASX under the code KAR. The buy-back, formally notified on June 29, 2026, suggests managemen...
Karoon Energy to Launch New Phase of On-Market Share Buyback in July 2026
Jun 29, 2026
Karoon Energy will launch a third phase of its on-market share buyback in July 2026, following the completion of the second phase of a US$75 million program. To date, the company has repurchased and cancelled 94.3 million shares at a cost of about...
Karoon Energy Seeks ASX Quotation for Newly Issued Shares
Jun 19, 2026
Karoon Energy has applied for quotation on the ASX of 95,607 new ordinary fully paid shares, following the issue of these securities on 17 June 2026. The additional shares, arising from the exercise or conversion of existing instruments, will slig...
Karoon cuts 2026 output guidance after extended Who Dat delay
Jun 16, 2026
Karoon Energy has reported new operational setbacks at the Who Dat joint venture in the U.S. Gulf of Mexico, where operator LLOG now expects that production through the E manifold will not be reinstated until the second half of 2027, following rem...
Karoon Energy Cancels Shares Following On-Market Buy-Back
Jun 10, 2026
Karoon Energy Ltd has cancelled 418,059 ordinary fully paid shares following an on-market buy-back completed on 8 June 2026. The reduction in issued capital through this share cancellation may improve capital management metrics and marginally enha...
Commonwealth Bank of Australia Exits Substantial Holding in Karoon Energy
Jun 9, 2026
Commonwealth Bank of Australia and its related bodies corporate have lodged a notice that they have ceased to be a substantial shareholder in Karoon Energy Ltd as of 8 June 2026. The change in substantial holding may alter Karoon’s instituti...
Karoon Energy Completes A$36.5 Million On-Market Share Buy-Back
Jun 4, 2026
Karoon Energy Ltd has completed its on-market share buy-back program of ordinary fully paid shares, as disclosed in a final notification to the ASX. The company repurchased a total of 21,229,362 shares for aggregate consideration of about A$36.55 ...
Karoon Energy Updates Market on Progress of On-Market Share Buy-Back
Jun 4, 2026
Karoon Energy has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for ordinary fully paid shares. The company reported that it had repurchased a cumulative total of 21,193,482 shares prior to the ...
Karoon Energy Continues On-Market Share Buy-Back Program
Jun 3, 2026
Karoon Energy has disclosed an update on its ongoing on-market share buy-back program, confirming that a total of 21,147,410 ordinary fully paid shares had been repurchased prior to the latest reporting day. The company reported that a further 46,...
Karoon Energy Updates Daily On-Market Share Buy-Back Activity
Jun 1, 2026
Karoon Energy Ltd has reported an update to its on-market share buy-back program, confirming that a total of 21,048,302 ordinary fully paid shares had been repurchased prior to the latest trading day. The company disclosed that an additional 40,50...
Karoon Energy Continues On-Market Share Buy-Back Program
May 31, 2026
Karoon Energy Ltd, the ASX-listed oil and gas producer, continues to execute its on-market share buy-back program involving its ordinary fully paid shares. The company is using this capital management initiative to repurchase its own stock on the ...
Karoon Energy Director Rachid Lifts Shareholding via On-Market Purchase
May 29, 2026
Karoon Energy director Ms Luciana Bastos de Freitas Rachid has increased her direct holding in the company by acquiring 2,000 ordinary fully paid shares in an on-market trade. The purchase, completed on 28 May 2026 for a total consideration of $4,...
Karoon assumes full operatorship of Baúna FPSO in Brazil
May 28, 2026
Karoon has completed the formal transition of operatorship for the Cidade de Itajaí floating production, storage and offloading vessel at the Baúna field in Brazil, taking over from former operator Altera Ocyan. The move follows the acq...
Karoon Energy Cancels Shares Following On-Market Buy-Back
May 28, 2026
Karoon Energy has reduced its issued capital through the cancellation of 131,336 ordinary fully paid shares following an on-market buy-back completed on 27 May 2026. The move reflects ongoing capital management, slightly shrinking the company̵...
Karoon Energy Updates Market on Ongoing On-Market Share Buy-Back
May 28, 2026
Karoon Energy Ltd is an Australian energy company focused on the oil and gas industry, with its ordinary fully paid shares listed on the ASX under the ticker KAR. The company actively manages its capital structure through listed equity and on-mark...
Karoon Energy Updates Progress of On-Market Share Buy-Back
May 27, 2026
Karoon Energy Ltd has issued an updated notification regarding its on-market share buy-back program for its ordinary fully paid shares listed on the ASX. The latest daily disclosure shows that 42,366 shares were repurchased on the previous trading...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.