Karoon - my views

Karoon. Where do we start! Finally they the done a deal. The overhang that everyone has been waiting for. Yes they have paid top dollar for this oil - but it’s because - tier one location and because it comes with organic growth opportunities.

This makes it the second biggest pure oil play in the ASX, second only to Woodside. Yes oil is declining today, but I see oil >100 as Saudi maintains cuts to help drive their transition plan.

There are 4-5 broker reports out - all maintaining buy with bjoey upgrading to buy. Average price target 2.70-2.80.

index flow - this will be up weighted in msci and added to asx 200. The index and quant guys will have to add this in size.

BAML”We firmly believe that, following the acquisition, KAR becoming a dual-asset companyacross multiple jurisdictions should warrant a re-rating, as it is clear currently trading on 1.2xEV/EBITDA (CY24), well below larger peers Woodside, Santos and Beach on 3.8x.”

it’s unfortunate oil price is dropping today but I wonder if oil was 120 if this would have gone ahead ? I am super positive here and will be taking up full rights due to my belief that it’s a better company and the overhang of a deal is gone.

Goodluck everyone. I call for 2.40 by the end of next week.

PB