Karoon to raise $480 million for US oil and gas assets

The news: ASX-listed oil and gas play Karoon Energy has tapped Macquarie Capital to lead a USD300 million ($480 million) raising to fund its purchase of oil and gas assets in the Gulf of Mexico.

The numbers: Karoon will buy a 30% interest in the Who Dat and Dome Patrol oil and gas fields offshore of Louisiana for USD720 million and a further USD27 million in costs. The total figure will be made up by the USD300 million equity raising, a USD274 million drawdown from a new USD340 million debt facility and existing cash of USD171 million. The five-year revolving reserve lending facility is backed by Macquarie, Deutsche Bank, ING and Shell Western. The equity raise comprises a $310 million entitlement offer and $170 million placement of new KAR shares. Karoon expects the acquisition to add a 57%-63% increase to FY24 production.

The context: The stake will further diversify the geography of Karoon's asset base, which has been limited to Brazil and Australia. Karoon shares were selling for $2.15 before trading was halted ahead of the announcement, but Citi earlier this month had put a 'buy' recommendation on the miner, which had signalled an incoming acquisition, the Australian Financial Review reports.