Balanced Portfolio Recommendation: Energy Rebalance Switch 2% Woodside Energy Group (WDS) to Karoon Energy Ltd (KAR)

Sector: Energy

• Woodside Energy Group Ltd (WDS): As an established Australian oil and gas company, Woodside specializes in hydrocarbon exploration, evaluation, development, production, and marketing. The company’s extensive portfolio primarily focuses on natural gas, featuring offshore platforms and oil floating production storage and off-loading vessels. While Woodside has a strong international presence, its primary energy commodity is natural gas.

• Karoon Energy Ltd (KAR): Karoon is an international oil and gas exploration and production company with significant assets in Brazil. It is listed on the ASX and primarily focuses on crude oil, aligning well with our strategic goals for enhanced crude oil exposure. Karoon’s operations center on exploiting profitable hydrocarbon reservoirs, with an asset base that is not only well-positioned but also currently undervalued in the market.

Rationale:

1. Strategic Commodity Alignment: Shifting from WDS to KAR allows us to better align our investment portfolio with the crude oil market, which is expected to offer superior risk-adjusted returns compared to natural gas in the current economic climate.

2. Valuation Opportunity: KAR presents a compelling buy opportunity due to its undervaluation, which stands in contrast to WDS’s assets, potentially inflated by recent natural gas price volatility.

By selling Woodside Energy Group and buying Karoon Energy, we strategically increase our portfolio’s exposure to crude oil.

Sell 2% Woodside Energy (WDS)

<$28.3

Buy 2% Karoon Energy (KAR) 2%

>$1.95