Bloomberg News

Karoon Says Peru Assets Drawing Interest From Potential Partners

February 20, 2013

Karoon Gas Australia Ltd., an explorer with oil blocks in South America, said more than 10 companies are interested in becoming a partner to help develop its assets in Peru.

The company plans to offer about 30 percent of the Peru prospects and is starting to give potential bidders access to the data, Executive Chairman Robert Hosking said yesterday in an interview in Melbourne. Karoon also hired Rob Singh from Schlumberger Ltd. unit IndigoPool, an adviser to oil and gas companies, to help with planned transactions to bring in partners in South America and Western Australia, Hosking said.

“We’ve got a lot of interest,” Hosking said, without naming any companies. “There’s a healthy appetite.”

Mt Martha, Victoria-based Karoon is developing oil blocks off Peru and Brazil after scrapping a proposed initial public offering of its South American business in November 2010. Colombia’s Pacific Rubiales Energy Corp. agreed in September to acquire a 35 percent stake in Karoon’s exploration assets in Brazil’s Santos Basin.

Karoon shares, which have risen 35 percent in Sydney this year, gained 1.3 percent today to A$7.15 at the close in Sydney, valuing the company at A$1.58 billion ($1.64 billion). Australia’s benchmark S&P/ASX 200 Index climbed 0.3 percent.

While Pacific Rubiales may be interested in a Peru partnership, Karoon’s holdings in that country probably won’t generate as much interest as the assets in Brazil, said Kirit Hira, a Sydney-based analyst at Macquarie Group Ltd., who values Karoon at A$10 a share and the Peru assets at about A$1 a share.

“The Santos Basin is one of the hottest places in the industry,” Hira said by phone today.

The explorer plans to begin drilling in Peru at the end of 2013 after finding a partner to help fund the project, Chief Financial Officer Scott Hosking said in January. The holdings in Peru’s Tumbes Basin may hold as much as 1.92 billion barrels of oil, according to Karoon’s estimates in December.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net


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