when I spoke with JW he said depending on the outcome of K2 that the plan is to recommence buyback Prior to the next well spudding. From this statement I get the impression that if the stock moves from undervalued to over valued the company might take the view there are better alternatives for their cash.
Additionally I would conclude that the period between P & A and spudding may only be a few days and as steve indicated they can only buy at prices capped to 5% of VWAP of previous day. My guess is if indeed they find 350+ m of oil column then their ability to do so maybe limited.
Finally hopefully the Oil price can stabilize around 80 USD ( moved slightly higher last couple days)and if we are lucky the OPEC meeting reduce produce by some meaningful amount to bring some support.
Note drilling costs are 37 Million for 120 days or about 308K USD per day. My guess is that this already accounts for EWT of 2 weeks on couple of wells. Note that Karoon share is currently 65% of that.
Finally assuming JW also said that in the FID Karoon where looking to fund their share of dev without additional capital ( using debt as indicated in AFR) but he also said they expect their share to be 40-50% meaning some of this funding is also being funded via farming down an additional 15-25%.
I will have a look at some transactions for recent farmins for undeveloped oil fields. Might be good to get a feel for what it might be worth once they establish the new 1C, 2C, 3C values for the kangaroo field.
IFL Price at posting:
$8.96 Sentiment: None Disclosure: Not Held
KAR Price at posting:
$2.94 Sentiment: Buy Disclosure: Held
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