Ann: Second Quarter Activities Report-STO.AX, page-32

Q: "Can Santos survive if "many" is 5 years or more?

My Answer: Depends how low is low? If under $50, then no they won't survive and if they do, it'll be near worthless to current shareholders.

What scares me is that debt maturity in 2019. I believe that as long as oil starts averaging $50+ next year, they'll get through it. However, if we have another downturn like in the 2nd half of 2015/start of 2016 (sub $30) I'm not too confident they'll make that 2019 maturity. As more time will be used up and their net debt will grow larger.

I personally feel that in a vacuum there is no way oil will drop that low again. However there are so many possible serve financial and economically crisis's that could happen, which would very likely send oil down under $30 again.

The other day on the AFR there was an article about how there is a 66% chance of Asian financial crisis. Now if you combine that with at least a 50% chance of one happening somewhere else (like European banks), there is a 83%+ chance of a financial crisis.

In such case happening I suspect that there is a 80% chance Santos would fail/become worthless (my opinion only) so I could argue there is a 66% chance of Santos failing (83% x 80%).

By worthless I mean, they've either done another capital raising, sold off PNGLNG stake in a buyer's market or had to refinance debt with massive double digit interest rates, and so on.