Morgans runs legal scenarios around a Dispute Notice from joint venture partner Pitkin Petroleum and concludes the development will likely be immaterial. The broker sees a modest settlement as reasonable, given the underlying agreement.
The dispute stems from an agreement to drill an additional exploration well in Peru, which Karoon energy did not go ahead with after the conclusive failure of the first well. The Add rating and $1.80 target are maintained.
Sector: Energy.
Target price is $1.80.Current Price is $1.20. Difference: $0.60 – (brackets indicate current price is over target). If KAR meets the Morgans target it will return approximately 33% (excluding dividends, fees and charges – negative figures indicate an expected loss).
