So there are a number of areas where I would argue your numbers...

So there are a number of areas where I would argue your numbers are too conservative

1. Karoon is more than doubling production.

• The company started at 12,000 bbl/day before the Bauna intervention and after it are at now 24,000 bbls/day. Patola is an additional targeted 10,000 bbls/ day and the first well is completed and the second should be completed by year end.
• So by January I expect production to be 34,000 bbls/ day. (ie production is increasing by 2.8x)
• The company's FY 2023 (ie to 30 June) only captured 50% of this increased production hence their guidance of 7.5-9m bbls for the financial year.
• However on an annualised basis at full post Patola production this is 12m bbls/day and I expect will be reflected in the guidance for FY24 (ie 30 6/24).

2. Production is already running at 24,000/bbls /day this quarter (Q2FY23) so at the high end of the company's estimated costs of US$20/bbl & 10% royalties (conservative) @US$95/bbl Brent they should be generating pre tax cash flow this quarter they should generate US$65.5/bbl margins or US$141m in Q2FY23 cash flow.

• When Patola is completed in January production costs should come down further towards US$15/bbl (conservative), so margins will increase to US$70/bbl ($95/bbl brent -$15/bbl cost - $9.5/bbl royalty) @34,000 bbl/day = US$214m Q3FY23 pre tax cash flow.

3. I agree with your capex & Bauna deferred payment projections estimate for FY23 of US$364m.
4. So on my math

• Cash as at 30 Sept 2022 US$181m
• Q2FY23 cash flow US$141m
• Q3FY23 cash flow US$214m
• Q4FY23 cash flow US$214m
• Less Capex & deferred Baunan payments (US$364m)
• Pre tax cash available at 30 June 2023 = US386m = A$593m

5. Current market cap A$1.27bn.
6. Available annual pre tax cash flow at 34,000 bbls/day = US$214/quarter x 4 = US$856m = A$1,316m

So hence my suggestion of a buyback starting in January after Patola is completed, to target 15-20% of the stock from January to December 2023 (ie 2HFY23 and 1HFY24) or at current stock levels this would amount to a capital return of A$190-A$240m. This could be combined with a dividend as well and should be adjusted based on where production, profitability and the oil prices are.