I would argue that the conditions are quite different for Karoon...

I would argue that the conditions are quite different for Karoon now compared to a decade ago under old management.

When Karoon was a pure exploration company the company was right to be focused on drilling alone. The cash it raised from the IPO, cap raises and the various divestitures / farm-outs were for that purpose. Exploration in the absence of production is highly risky, so as much cash as possible should have been retained in the company until it starts to generate cash. The lack of a dividend after the sale of the Browse assets is why management had to be replaced, but is now history.

Today the company is a producer and finally generating cash returns on its earlier investments. Shareholders should rightly expect a return on these producing investments, that in some cases (in Brazil) have been a decade in the making. IMO these returns can be delivered to shareholders in many ways. Dividends is certainly one that I would advocate. They provide a long awaited return and as shareholders we can reinvest this cash elsewhere.

Buybacks generate longer term returns for shareholders and I would also advocate for these now because of where the company is in the cycle. IMO oil is structurally in a strong position and this is likely to continue for the best part if this decade. Karoon has excellent producing assets and internal projects in Neon / Goia that will deliver long term value to shareholders well into the 2030s. M&A in Brazil is a bonus if management can find suitable assets.

Karoon has prospects of generating pre-tax cash margins of $80/bbl ($95/bbl Brent -$15/bbl costs) in 2023 and again in 2024. Over the next 24 months, the internal cash generated could be as much as A$3bn ($80/bbl margin x 34,000 bbls/day post Patola) at current oil prices. Post-tax, CAPEX & Bauna payments (say A$500m) thats well over A$2/sh or roughly where the stock is today. Even after paying substantial dividends in 2023 & 2024, Karoon could repurchase well over 50% of its share capital (in theory) by the end of 2024. If we see markets remaining volatile below A$3/sh, what better investment for the Board that its own severely undervalued stock?

IMO the Board should take advantage of these market conditions to deliver long term returns via a sustained buyback in addition to dividends.