Karoon Energy (ASX:KAR) Interest Coverage : 23.68 (As of Dec. 2023)

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What is Karoon Energy Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Karoon Energy's Operating Income for the six months ended in Dec. 2023 was A$322 Mil. Karoon Energy's Interest Expense for the six months ended in Dec. 2023 was A$-14 Mil. Karoon Energy's interest coverage for the quarter that ended in Dec. 2023 was 23.68. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Karoon Energy's Interest Coverage or its related term are showing as below:

ASX:KAR' s Interest Coverage Range Over the Past 10 Years
Min: 14.56 Med: 31.9 Max: 35.28
Current: 24.43

ASX:KAR's Interest Coverage is ranked better than
73.79% of 763 companies
in the Oil & Gas industry
Industry Median: 6.59 vs ASX:KAR: 24.43

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Karoon Energy Interest Coverage Historical Data

The historical data trend for Karoon Energy's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Karoon Energy Interest Coverage Chart

Karoon Energy Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

Interest Coverage

Get a 7-Day Free Trial

14.56

35.28

31.90

Karoon Energy Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial															29.68	38.83	42.57	25.53	23.68

Competitive Comparison of Karoon Energy's Interest Coverage

For the Oil & Gas E&P subindustry, Karoon Energy's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Karoon Energy's Interest Coverage Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Karoon Energy's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Karoon Energy's Interest Coverage falls into.

Karoon Energy Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Karoon Energy's Interest Coverage for the fiscal year that ended in Jun. 2023 is calculated as

Here, for the fiscal year that ended in Jun. 2023, Karoon Energy's Interest Expense was A$-15 Mil. Its Operating Income was A$471 Mil. And its Long-Term Debt & Capital Lease Obligation was A$340 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2023 )	/	Interest Expense (A: Jun. 2023 )
	=	-1	*	470.542	/	-14.751
	=	31.90

Karoon Energy's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, Karoon Energy's Interest Expense was A$-14 Mil. Its Operating Income was A$322 Mil. And its Long-Term Debt & Capital Lease Obligation was A$658 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	321.957	/	-13.595
	=	23.68

The higher the ratio, the stronger the company's Financial Strength is.

Karoon Energy (ASX:KAR) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Karoon Energy Interest Coverage Related Terms

Thank you for viewing the detailed overview of Karoon Energy's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Karoon Energy (ASX:KAR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Karoon Energy Ltd (ASX:KAR) » Definitions » Interest Coverage

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KRNGY:USA KRNGF:USA LBL:Germany

Address

6 Riverside Quay, Level 3, Suite 3.02, Southbank, Melbourne, VIC, AUS, 3006

Website

https://www.karoonenergy.com.au

Karoon produces around 8 million barrels of oil annually from its wholly owned Bauna field in Brazil's offshore Santos basin. The company acquired Bauna from Petrobras in 2020 and has been steadily increasing production via well interventions and new developments. Field life is approaching eight years based on proven and probable 2P reserves of 55 million barrels at end December 2022, though this excludes a further 82 million barrels in 2C contingent resources which which have potential to increase life further. We credit life of approximately 10 years, assuming partial conversion of 2C contingent resources into reserve category with drilling. There are also prospective untested targets within Karoon's permits which could potentially add further reserves in the medium term.