Macquarie’s outlook for oil prices and top 3 ASX energy picks

Wed 28 Jun 23, 12:46pm (AEST)
A cargo ship idles alongside an offshore rig as the sun sets in the background
Source: iStock

Key Points

  • Macquarie expects oil prices to remain range bound between US$70-80 over the next 6-12 months
  • The analysts share their three preferred small-to-mid cap energy plays
  • There's a preference for companies with low debt and reserve upside

Every oil price rally seems to get sold into – crude prices are down almost 45% since March 2022 peaks and have dipped  16% since OPEC’s surprise production cut on 4 April.

Macquarie expects oil prices to remain in the range of US$70 and US$80 a barrel over the next six to 12 months. The investment bank’s analysts forecast a potential supply deficit in the second half of 2023, recently upgrading their Q3 and Q4 price forecasts by 14% and 7% respectively. Their new estimates include:

US$ a barrel






























Source: Macquarie

The state of play for small-to-mid-caps

When it comes to Australian small- and mid-cap energy stocks, Macquarie said it prefers companies with “low debt and reserve growth.”

Its top picks in this space include Karoon Energy (ASX: KAR), Strike Energy (ASX: STX) and Tamboran (ASX: TBN).




Market cap (A$bn)

Target price


Beach Energy





Karoon Energy





Strike Energy





Cooper Energy














Source: Macquarie

The rationale

The Macquarie note provided a few high level dot points for each company. Here’s the rundown.

Karoon Energy has been trading sideways since August last year and it recently tightened its FY23 guidance from 7.0-7.7MMbbl to 7.0-7.1MMbbl.

  •  “Production has been shifted from June quarter into FY24; export levy falls away from 1 July. We estimate 30kb/d production in September quarter”

  • “Neo resource certification in the next 1-2 months will be key.”

Karoon Energy 12-month price chart (Source: Market Index)

Strike Energy shares are up 40% year-to-date and 64% in the last 12 months. It's currently consolidating around the 45 cent level. Macquarie only noted one key point, which was how the “Walyering gas field should be ready for start-up soon, which is significant in providing first recurring revenues for Strike.”

The Walyering Project is a 55:45 joint venture with Talon Energy, which is expected to produce 33 terajoules of gas per day. Talon says it expects this to generate up to $30 million per annum in net operating cash flows. 

Strike Energy 12-month price chart (Source: Market Index)

Tamboran Resources shares have also been range bound since July last year. The company is the largest acreage holder of the Beetaloo Basin in the NT, with 1.9 million prospective acres and a contingent resource of 1.5 trillion cubic feet. The stock has been under pressure in recent days after raising $53.2 million at 18 cents per share (12.2% discount to pre-raise close). Macquarie noted:

  • “Amungee-2H has been challenging (potentially due to a reservoir skin issue), with an uninhibited gas flow yet to be achieved. Management will be seeking to better understand this completion issue for future wells.”

  • “Agreement with APA on a 500MMscf/d pipeline is positive, in our view.”

  • “We have factored in the dilution from the $71.4mn capital raise. We estimate another $250-280m needs to be raised prior to commercial production; if flow tests strengthen, this becomes far less dilutive.”

Tamboran 12-month price chart (Source: Market Index)


Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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