Shares of international oil and gas explorer, Karoon Gas Australia Limited (ASX: KAR), surged 14% today following the release of its half-year accounts to the market.
Updating the market on Monday evening, in the six months to 31 December 2014, the company declared a $209.1 million profit, up from an $8 million loss in the prior year.
Late last year, Karoon Gas announced it would sell its 40% stake in two of its Browse Basin (located off the north-west coast of Australia) exploration blocks to Origin Energy Ltd (ASX: ORG) for $665 million. Karoon subsequently undertook a share buyback.
Yesterday's profit result was largely buoyed by this transaction and included a "gain on divestment of exploration permits" – of roughly $276.5 million. It also earned $83.5 million on foreign currency gains.
At 31 December 2014, Karoon had $680 million in cash and no debt.
Karoon – a top-200 publicly-listed company included in the S&P/ASX200 (ASX: XJO) (Index: ^AXJO) – holds interests in a number of exploration blocks in the Santos Basin, off the coast of Brazil. It is in the Santos Basin, where the company will invest more money and look to transition from oil explorer to producer.
In this region, massive oil deposits have been discovered. However it is likely to cost billions of dollars for Karoon to commercialise any offshore deposits and in a plunging oil price environment, nothing is certain to take place.
Get our best LNG stock idea – FREE!
