Breakeven Price - $38 Brent, page-10

Klu, - what investor2009 says is correct.

it is "non-sensical" in the bigger picture b/c of the following:

1. STO is coming to the end of its capex cycle (spend on GLNG).
2. the FCF does NOT include "purchased inventory", nor does it include LNG plant costs.....(as per preso's)

the "reason" that STO have included this number is
during the cap raise programs - mr market wanted to know "at what level" would Santos be able to pay for the remaining / forward capex programs out of "operating cashflows" ......


as a (funny) aside - if you carefully check mr gallager's renumeration - you will see its set by "FCF" as defined in the preso's ...........he is GUARANTEED to get 5mill - because the spend on glng (plant !!!!) is finished..............

again - as an aside - if you are FCF neutral at 38us$/brent - and ave for last half is circa 52 ......then how is it that sto needed some additional cash ??????

you may wish to chk the following:

1. the ESG indepent experts report has a well / flows / capital spend in the appendix.......
2. when SHG owned the roma shelf - there was a public scheduale of wells required and capital spend ........
3. STO - about 18 months ago - gave a capex number for the upgrade re Moomba (cooper basin capital day preso) .....

basically - ALL of the most recent cap raising (and then some !!) is already committed to try and fill the GLNG plant ..........

as the last (and most funny) aside - you may wish to go through the "Horizon contracts" - and then sum up the total tj's/day that STO has "contracted" ........and then ask the other bleedingly obvious question .......which is - why isn't GLNG operating at capacity (rather than circa 70%).......

that, my fine furry friend .....is the nub of the question !

kind regards
Value_Hunter