Karoon Energy shares climbed after the company secured full ownership of six oil blocks in Brazil’s Santos Basin, positioning it for growth amid rising crude prices.
(AI video summary)
This video was created on 18 June 2025 for IG audiences by ausbiz.
Karoon Energy is gaining attention after securing 100% interests in six offshore blocks in Brazil's Santos Basin. This strategic acquisition has boosted the company’s shares, and Managing Director Julian Fowles states it strengthens Karoon's presence in the basin.
The bid terms include a bonus payment of approximately $14.8 million. Karoon is unique on the Australian Securities Exchange (ASX) due to its direct leverage to crude oil prices, being an oil producer in a sector dominated by liquefied natural gas (LNG).
Karoon recently broke a resistance level at A$1.70, pointing to potential momentum if oil prices rise. Analysts suggest holding the stock, eyeing a buy point between A$1.80 and A$1.90 on a pullback.
Karoon remains unhedged, producing around 10 million barrels of oil annually. It was valued at A$1.20 with a low price-to-earnings (P/E) ratio of about 3 to 4 times.
Middle East tensions contribute to volatility, but Karoon's fundamentals were already improving due to oil supply constraints. These constraints result from low investment in new fields and a shift of funds to United States (US) technology sectors.
With global oil demand set to rise, despite an expected peak in China, Karoon Energy is well-positioned to benefit.
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