Karoon Gas Australia Ltd (KAR)

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General Information
Company Name: Karoon Gas Australia Ltd
Stock Code: KAR
Website: www.karoongas.com.au
GICS Sub-Industry: Oil & Gas Exploration & Production
Market Cap ($M): 533
Equiv. Shares (M): 247

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 2.160 $ 2.170 $ 2.180 $ 2.140 $ 2.160 594,105 0%

Company Overview

Business Description:
Karoon Gas Australia Limited (KAR) is an Australian oil and gas exploration company operating in Australia, Brazil and Peru. KAR currently has 5 projects, the producing Browse Basin offshore gas reservoirs and the North Carnarvon Basin (Australia), the Tumbles and Maranon Basins (Peru) and Santos Basin (Brazil).

Strategy Analysis:
The Karoon Board and management are committed to securing high quality hydrocarbon exploration areas with the right partner. KAR is currently in a JV with ConocoPhillips in regards to the WA-389-P permit, with Karoon contributing 40% equity. The Board believes that the Browse Basin permits are ideally located and will continue to take advantage of continuingly favourable hydrocarbon prices. The company strategy will focus around capitalizing on oil prices and accelerating exploration programs. KAR has completed processing seismic surveys of WA-314P and WA-316-P and is now interpreting the data set in preparation for the selection of drilling targets. The Poseidon Prospect remains a high grade source of production, with other areas in that region, anticipated to result in important additions to the potential resource base Karoon Gas Australia reported positive cash flow of $27.63m for the quarter ended 31 December 2012. Operating cash flow for the period was $(53.17m). Payments for exploration and evaluation were $(51.98m). Investing cash flow was $80.8m. Financing cash flow was nil. Cash in hand at the end of the quarter was $228.25m. Key activities during the quarter included the successful testing of the first well in the phase two Browse Basin drilling campaign, with the Boreas-1 exploration well achieving an equipment constrained stabilised gas flow rate of 30.2 million standard cubic feet per day through a 40/64" choke at a well head pressure of 3,300 psia and an associated condensate rate of 18 barrels per million standard cubic feet. In addition, drilling in Brazil commenced with the Kangaroo-1 exploration well, which spudded during December 2012.

Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2014  A -5.5 -2.2 -- 0.0 0.0 0.0 --
2013  A -10.9 -4.9 -- 0.0 0.0 0.0 --
2012  A -3.2 -1.4 -- 0.0 0.0 0.0 --
Source: Aspect actuals / Thomson IBES estimates

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F
Beach Energy (BPT) $1,323 M 0.8455 -0.6951 -0.5207 5.1411 16.8595 35.1724 1.96 2.94 2.94
Karoon (KAR) $525 M -- -- -- -- -- -- 0.00 -- --
Oil Search (OSH) $10,902 M 0.6947 0.3941 0.1077 24.7067 17.7228 16.0000 2.72 2.54 2.54
Santos (STO) $7,035 M 0.0505 -0.5043 0.8323 12.8831 25.9904 14.1847 4.99 4.40 5.55
Woodside Petroleum (WPL) $28,013 M 0.5477 -0.4966 0.2799 9.5046 18.8815 14.7525 9.14 4.24 5.41

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
KAR -- -- 0.72 -- 490.9
Market 0.88 16.6 1.30 2.38 1.59
Sector 1.00 10.70 0.58 8.37 2.57

Name Position Start Date
Mr Mark Alexander Smith Executive Director,Exploration Manager 16 April 2004
Mr Robert (Bob) Michael Hosking Managing Director 16 April 2004
Dr Geoffrey David Klingner Non-Executive Chairman 19 December 2014
Mr Clark A.N. Davey Non-Executive Director 01 October 2010
Mr Bernard Wheelahan Non-Executive Director 24 June 2014
Mr Peter Turnbull Non-Executive Director 06 June 2014
Mr Geoff Atkins Non-Executive Director 22 February 2005
Mr Jose Coutinho Barbosa Non-Executive Director 31 August 2011

Name Position
Edward Munks Chief Operating Officer
Scott Hosking Company Secretary
Tim Hosking South American General Manager and Chief Executive Officer Brazil

Substantial Shareholders
Holding Name
35,152,430 (13.73%) Wellington Management Company
17,226,929 (6.73%) Paradice Investment Management Pty Ltd
13,023,854 (5.09%) IOOF Holdings Limited
26,358,356 (10.30%) Talbot Group Holdings Pty Ltd

Calendar of Events
Date Event
29 January 2016 Report (Quarterly)
30 October 2015 Report (Quarterly)
11 September 2015 Report (Annual)
30 July 2015 Report (Quarterly)
29 April 2015 Report (Quarterly)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.


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