The Karoon Energy (ASX: KAR) share price is jumping today after the company announced strong oil production in its March quarterly update.
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Karoon Energy Ltd (ASX: KAR) shares are jumping markedly today after the company reported achieving 1.14 billion barrels of oil production in its March 2021 quarterly report. At the time of writing, the Karoon share price has climbed 6.78% to $1.26.
Karoon Energy is an Australian oil and gas exploration company engaged in the exploration and development of natural resource properties. It’s a relatively new major oil producer and has projects in Australia, Brazil, and Peru.
Let’s dive into the company’s quarterly report and find out why some investors are becoming excited.
Quarterly performance highlights
The Karoon share price is having a bumper day after the company reported positive figures across the board in its latest report. Karoon highlighted that oil production from its Baúna Field in the March 2021 quarter totalled 1.14 million barrels, produced at an average rate of 12,641 barrels of oil per day.
As a result, the company’s total oil sales receipts for the quarter (which included proceeds from the December cargo) were $97.2 million. This figure isn’t comparable to previous quarters, as it represents the company’s inaugural cash flow from oil sales.
The company reported no safety or environmental issues for the period. Karoon also noted that the COVID-19 pandemic did not impact its operations in Brazil. This was despite the nation suffering one of the worst global death tolls as well as widespread industry shutdowns.
In further news boosting the Karoon share price, the company highlighted that its cash reserves and equivalents at 31 March 2021 were $173 million, up from $133 million at the end of December 2020, with no external loans.
Karoon CEO Julian Fowles commented on the upbeat results, saying:
Karoon produced more than one million barrels of oil in the three months to March 2021, our first full quarter of production. We also received inaugural gross cash inflows of A$97.2 million from the first three Baúna oil cargoes, marking the Company’s first quarter as a substantial and profitable oil producer.
After sales expenses, the average oil price achieved for the two cargoeslifted during the period was a healthy US$55.38/bbl, reflecting the strong competition from a number of global refiners for our high quality Baúna crude.
Karoon share price snapshot
The Karoon share price has surged over the past twelve months, rising by around 135%. It’s also up by 6.8% over the last week, almost 18% in the past month and nearly 20% in 2021 so far. Furthermore, Karoon shares have beaten the energy sector over the past year by around 114%.
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*Returns as of February 15th 2021
Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.