Fitch gives B+ to Karoon Energy notes

Fitch Ratings said it assigned Karoon Energy Ltd. a long-term issuer default rating of B. The outlook is stable.

At the same time, Fitch assigned a B+ rating with a Recovery Rating of RR3 to the proposed senior secured notes of US$400 million to be issued by Karoon Energy's wholly owned subsidiary, Karoon USA Finance Inc.

“Karoon Energy’s rating is constrained by its small operational scale and relatively short proven (1P) reserve life, which is concentrated across the Santos Basin and the U.S. Gulf of Mexico (GoM). The constraints are alleviated by the company’s lower counterparty and volume risks from a long-term volume off-take arrangement with Shell plc (AA-/stable) and its low-cost position,” Fitch said in a news release.

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