Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-11

Santos has an identity crisis right now.. and it's not hard to see this via numerous actions of late. So far as I can see Santos has 3 businesses...

1. LNG (GLNG in QLD, PNG LNG, Barossa)
2. Domestic Aus - (Cooper Basin, Surat Basin, WA dom/Carnarvon Basin and Narrabri)
3. Oil and Gas - (Pikka and Dorado)

And there's a big push for STO to simplify this and focus on the LNG.

If the other Aussie oil and gas prospects weren't the basket cases they are you could easily have a Cooper Energy or Beach Energy picking up those domestic Aus businesses above (2). But they're focused on getting their own house in order so M&A unlikely soon.. perhaps a demerger is an option.

If Karoon wasnt such a basket case they would have gone from the oil and gas projects.. not who dat.. but alas here we are.

As it pertains to Dorado.. CVN tell us we have a 60,000bbl/day (22mmbbl/yr), $10/bbl opex, <$2bn capex project. At $50/bbl margins on that 22mmbbl/yr you're making north of US$1bn a year and there's over 160mmbbl. So a 2yr payback and very healthy return on equity.

So I think the Asset (Dorado) is good, the new management of CVN are good, the price of CVN stock is attractive... it's just that it currently sits in a vehicle (STO) that is not the best home given the identity crisis above. But I have no doubt the above resolves.. and for STO selling business (3) might be a good first move before flipping the domestic stuff into one of the other domestic players (BPT, COE) or demerging and creating a new dom player.