Karoon Cash Flow to double to over US$150m / Quarter, page-8

I have a model based off the 2021 annual report and have the next financial year set below.

PAT - US$53-US$68m
EPS (AUD) - 12.8c - 16.5c
P/E Ratio - 11-14
EBITDA = US$189m-US$215m
EV / EBITDA Ratio - 2.8-3.2

I used an average oil price of US$75 and used the quoted production of 4.2-4.6m barrels to create the ranges along with the quoted Operating costs.

So on current production, KAR is probably fairly priced, but we all know that the Bauna intervention and Patola development are fully funded, resulting in a step change in production in around 12 months time.

So I've also looked at those scenarios where we are producing 8-10m barrels / year.

PAT - US$172m-US$252m
EPS (AUD) - 41.5c - 61c
P/E Ratio - 3-4
EBITDA = US$407m-US$547m
EV / EBITDA Ratio - 1.1-1.5

On either measure, using P/E of 8-10, I get a target price of $3.30-$6.10.
Using EV/ EBITDA of 3-4 times, I get a target price of $3.60-$6.44

They are fully funded for Bauna, Patola and this will also fund the Neon / Goia development as well I suspect. M&A activity is going to be interesting, they have plenty of flexibility bearing in mind they are funded upto a business that will produce US$500m / annum in FCF.