Research Update: Karoon Energy Ltd. Assigned 'B' Rating; Outlook Stable; Proposed US$400 Million Notes Rated 'B+'

Australia-based oil and gas exploration and production (E&P) company Karoon Energy Ltd. is planning to issue five-year senior secured second-lien notes of US$400 million. It will use the proceeds to diversify debt funding sources, lengthen its maturity profile, and repay the drawn amount (US$274 million as of Dec. 31, 2023) in its existing US$340 million reserve-based lending facility (RBL facility). Karoon benefits from the low-cost position of its 100%-owned Bauna project, located in the Santos Basin off the coast of Brazil, and its recently acquired 30% noncontrolling interest in the Who Dat asset, located in the Gulf of Mexico. However, the relatively small size of the company's reserves and production levels compared with rated global peers constrain the ratings. On

...- Australia-based oil and gas exploration and production (E&P) company Karoon Energy Ltd. is planning to issue five-year senior secured second-lien notes of US$400 million. It will use the proceeds to diversify debt funding sources, lengthen its maturity profile, and repay the drawn amount (US$274 million as of Dec. 31, 2023) in its existing US$340 million reserve-based lending facility (RBL facility). - Karoon benefits from the low-cost position of its 100%-owned Bauna project, located in the Santos Basin off the coast of Brazil, and its recently acquired 30% noncontrolling interest in the Who Dat asset, located in the Gulf of Mexico. However, the relatively small size of the company's reserves and production levels compared with rated global peers constrain the ratings. - On April 23, 2024, S&P Global Ratings assigned its 'B' long-term issuer credit rating to Karoon and 'B+' long-term issue rating to the company's proposed senior secured second-lien notes. The '2' recovery rating on the...

Research Update