Young kangaroo’s energy observed in delight (4)
I believe the answer is:
joey
'young kangaroo's' is the definition.
(I've seen this before)
'energy observed in delight' is the wordplay.
'energy' becomes 'e' (physics symbol as in E=mco).
'observed in' means one lot of letters goes inside another.
'delight' becomes 'joy' (synonyms).
'e' placed inside 'joy' is 'JOEY'.
(Other definitions for joey that I've seen before include "Threepenny bit" , "Young kangaroo" , "Sydney's youngster" , "jumper, in a pocket?" , "Baby boomer's" .)