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Karoon Energy Ltd (AU:KAR)
ASX:KAR
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Karoon Energy Ltd
(Sydney:KAR)
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Rating:63Neutral
Price Target:
AU$1.50
▼(-7.41% Downside)
Karoon Energy Ltd's overall stock score reflects strong operational efficiency and an attractive valuation, but is tempered by significant revenue and profit declines, as well as bearish technical indicators. The cautious optimism from the earnings call provides some positive outlook, but challenges in maintaining growth and profitability remain significant.
Karoon Energy Ltd (KAR) vs. iShares MSCI Australia ETF (EWA)
Market Cap
$1.17B
Dividend Yield4.64%
Average Volume (3M)4.18M
Price to Earnings (P/E)5.8
Beta (1Y)1.17
Revenue Growth-17.02%
EPS Growth-35.47%
CountryAU
Employees155
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.14
Shares Outstanding731,405,300
10 Day Avg. Volume3,032,031
30 Day Avg. Volume4,184,850
Financial Highlights & Ratios
PEG Ratio-0.09
Price to Book (P/B)0.70
Price to Sales (P/S)0.88
P/FCF Ratio3.20
Enterprise Value/Market Cap1.55
Enterprise Value/Revenue1.49
Enterprise Value/Gross Profit3.10
Enterprise Value/Ebitda2.34
Forecast
1Y Price Target
$2.09Price Target Upside28.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Karoon Energy Ltd Business Overview & Revenue Model
Company DescriptionKaroon Energy Ltd operates as an oil and gas exploration and production company in Australia and Brazil. The company holds 100% interest in the Santos Basin consisting of 5 off-shore blocks located in the State of Sáo Paulo, Brazil; 50% interest in the Carnarvon Basin located in the north Western Australia; and the Tumbes Basin covering an area of approximately 4,875 square kilometers located in northern Peru. The company was formerly known as Karoon Gas Australia Ltd and changed its name to Karoon Energy Ltd in December 2018. Karoon Energy Ltd was incorporated in 2003 and is headquartered in Southbank, Australia.
How the Company Makes MoneyKaroon Energy generates revenue primarily through the sale of crude oil and natural gas produced from its exploration and production activities. The company's revenue model is anchored in its ability to locate, extract, and sell hydrocarbons at competitive market prices. Key revenue streams include the sale of oil from its operational fields, with additional contributions from gas sales. The company has established significant partnerships with other energy firms and service providers, which facilitate its exploration and production efforts. Moreover, fluctuations in global oil and gas prices significantly impact its earnings, making market dynamics a crucial factor in its financial performance. Strategic investments in technology and sustainability initiatives also support operational efficiency and cost reduction, further contributing to its profitability.
Karoon Energy Ltd Earnings Call Summary
Earnings Call Date:Aug 26, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call presented both challenges and achievements. Key highlights included successful strategic acquisitions, resource upgrades, and strong production performance. However, these were offset by significant declines in profit and revenue, as well as operational setbacks. The outlook is cautiously optimistic with strategic plans to improve operations and extend project life.Q2-2025 Updates
Positive Updates
Successful Acquisition of Baúna FPSO
Karoon acquired the Baúna FPSO, which is expected to lower the cost base over time and extend the economic life out to 2039, increasing reserves by 45% to 52.7 million barrels.
Increase in Neon Resource
Neon resources increased by 54% to 86.5 million barrels of oil; the project is advancing with a potential final investment decision targeted for the second half of 2026.
Improved Safety and Environmental Performance
Safety performance improved with no LTIs and a reduction in emissions intensity. A 100-day safety improvement plan was completed for the FPSO.
Capital and Shareholder Returns
Returned $53 million to shareholders through dividends and buybacks, ending the half with leverage at 0.6x and strong liquidity of $452 million.
Positive Operational Performance
Baúna production exceeded expectations with FPSO efficiency at 94.5%, leading to an increase in production guidance for Baúna to 7.3 to 7.8 million barrels.
Negative Updates
Decline in Underlying NPAT
Underlying NPAT for the half was USD 45 million, 61% lower than the prior period, due to weaker global oil prices and lower sales volumes.
Electrical Submersible Pump Failure at SPS-92
Partial failure of the electrical submersible pump at SPS-92 reduced production rates; full production not expected to resume until Q2 2026.
Reduced Revenue
Revenue fell to $308 million from $409 million in the first half of 2024, impacted by lower oil prices and deferred sales volumes.
Increased Production Costs
Production costs increased by $3 million to $71.8 million, with transitional ops and maintenance service costs offsetting FPSO lease savings.
Company Guidance
In the first half of the fiscal year 2025, Karoon Energy Limited reported an underlying NPAT of USD 45 million, a 61% decrease from the previous year, primarily due to weaker global oil prices and lower sales volumes. The company ended the period with net debt of USD 238 million and strong liquidity of USD 452 million. During this time, Karoon acquired the Baúna FPSO, increasing its reserves base to 52.7 million barrels and extending the economic life of the project to 2039. Production for the first half was about 200,000 barrels of oil equivalent higher than the same period in 2024. EBITDAX was down by USD 66.2 million from the first half of 2024, with revenues at USD 308 million compared to USD 409 million the previous year. The company also returned USD 53 million to shareholders through dividends and buybacks, maintaining a leverage ratio of 0.6x. Looking ahead, Karoon plans to continue its buyback program and declared an unfranked dividend of AUD 0.024 per share, representing a 25% payout of its first-half underlying NPAT.Karoon Energy Ltd Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.22B | 776.50M | 847.00M | 842.19M | 531.00M | 228.98M |
| Gross Profit | 582.74M | 587.80M | 495.20M | 406.60M | 257.97M | 72.96M |
| EBITDA | 771.75M | 506.90M | 636.53M | 586.79M | 365.34M | 115.50M |
| Net Income | 200.05M | 127.50M | 251.29M | 242.33M | -88.87M | 5.88M |
Balance Sheet | ||||||
| Total Assets | 1.94B | 1.94B | 1.93B | 1.79B | 1.69B | 1.35B |
| Cash, Cash Equivalents and Short-Term Investments | 341.20M | 341.20M | 170.02M | 112.37M | 229.31M | 177.43M |
| Total Debt | 511.20M | 511.20M | 487.80M | 414.18M | 459.58M | 416.70M |
| Total Liabilities | 965.10M | 965.10M | 1.02B | 1.08B | 1.29B | 844.10M |
| Stockholders Equity | 976.40M | 976.40M | 911.94M | 711.49M | 401.66M | 506.49M |
Cash Flow | ||||||
| Free Cash Flow | 416.80M | 213.70M | -435.60M | -73.44M | 55.37M | -191.54M |
| Operating Cash Flow | 680.58M | 434.60M | 311.29M | 450.76M | 204.69M | 39.93M |
| Investing Cash Flow | -330.70M | -218.60M | -746.90M | -525.54M | -147.75M | -226.84M |
| Financing Cash Flow | -56.28M | -37.20M | 533.15M | -50.84M | -21.37M | -31.38M |
Karoon Energy Ltd Technical Analysis
Negative
1.62
Price Trends
1.74
Negative
1.78
Negative
1.60
Positive
Market Momentum
-0.03
Negative
43.88
Neutral
16.69
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:KAR, the sentiment is Negative. The current price of 1.62 is below the 20-day moving average (MA) of 1.64, below the 50-day MA of 1.74, and above the 200-day MA of 1.60, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 43.88 is Neutral, neither overbought nor oversold. The STOCH value of 16.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:KAR.
Karoon Energy Ltd Peers Comparison
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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.