Karoon shares rise on $38m buyback, new capital returns policy as production falls
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The news: Oil and gas explorer Karoon Energy announced an overhaul of its capital returns policy and a USD25 million ($38 million) share buyback, after seeing production fall and revenue rise in the June quarter.
The numbers: Karoon reported Q2 production of 2.14 million barrels of oil equivalent (MMBoe), 27% lower than the prior quarter, primarily due to a scheduled three-week maintenance outage at its Baúna oilfield in Brazil.
Sales revenue for the quarter rose 8% to USD212.8 million, reflecting the timing of shipments in Brazil as well as higher oil prices.
Meanwhile, Karoon announced its revised capital returns policy, which will see shareholders paid 20% to 40% of underlying NPAT by way of a dividend and/or share buyback.
The company also launched a USD25 million share buyback, to take place over the period to 31 December.
Karoon shares rose 1.5% to $1.82 by 11:45am AEST and over the past 12 months has fallen 11.98%.
The context: Karoon said the buyback would be an opportunity to add value to the shares on issue, with the company's board noting its current share price "does not accurately reflect the underlying value of the company's assets".
The June quarter saw Karoon face public criticism from shareholders Samuel Terry Asset Management and Sandon Capital, which failed in their attempt to deny five of the nine tabled resolutions at the energy company's annual general meeting.
What they said: Karoon chair Peter Botten said: "The announcement of our updated capital allocation framework and capital returns policy represents another significant milestone for the company, with capital returns one of the key components of our stated 2021 strategy".
"Following the successful completion of the Baúna interventions, Patola development and the Who Dat acquisition in the US Gulf of Mexico, the company has now achieved a stable and diversified production base that allows for capital returns to shareholders," he said.
The sources: ASX announcement, ASX announcement
