As one of the people looking to "buy near the bottom" I've been...

As one of the people looking to "buy near the bottom" I've been looking at Santos of late. Trying to determine how much money was spent on what going through the entire annual report. Here was the breakdown of company expenses (after sitting on debt of $32+/bbl of reserves).

This set of circumstances is not a good omen; Santos doesn't seem to hedge, production barely budged over the year despite spending $8/bbl and assets purchases of a whopping $24/bbl. Revenue is set to drop sub $40/bbl for 2016 (LNG sells at a substantial discount per BOE)

This is a dangerous boat in my view, storage keeps racking up in the U.S., and I doubt STO can cut company costs 50% (headline proposed rate of 10%). LNG facility coming online will track up revenue, but with the spot market where it is, the cost of production exceeds the sale of supply.

Interested in hearing some counter-arguments.

	Column 1	Column 2
0		2015 $/BOE
1	Sales Volume (mmboe)	64.3
2	Revenue	$54.49
3	Exploration And Development	$(8.10)
4	Direct Cost Of Production	$(33.51)
5	Borrowing Related Costs	$(6.08)
6	Asset Purchases	$(24.26)
7	Dividends	$(3.34)
8	Total	$(75.30)

Disclosure - I am currently short STO