What does the investor centre at santos think about the current price ($3.12)

Disclaimer: Please note that a friend has messaged Santos and received the following reply on Friday, who forwarded this to me. What are your thoughts

"

As a fellow shareholder and participant in the capital raisings, I understand your frustration with regard to the share price.

Since Kevin Gallagher’s appointment as MD & CEO in February last year, significant inroads have been made to stabilise the business, reduce costs and strengthen the balance sheet, including the following:
· A new leadership team appointed
· A new organisational structure and operating model established (including a significant reduction in headcount by 580 positions)
· A new 3 phase strategy implemented to transform, build and grow the business (see 2016 Shareholder Review attached for more detail)
· Our free cash flow breakeven has reduced from US$47/bbl at the start of 2016 to US$34/bbl and our net debt reduced from US$4.8 billion to US$3.1 billion as at the end of March 2017.

In 2016 we also reported record annual production of 61.6 mmboe and record sales volumes of 84.1 mmboe.

Whilst we are extremely frustrated at the current share price, we do believe that the foundations have been set for the company to participate in upside opportunities across its five core long-life natural gas assets, namely: the Cooper Basin, Western Australia Gas, Northern Australia, GLNG and PNG LNG. Recently we announced a promising discovery in PNG with the Muruk-1 exploration well and our Barossa-Caldita fields in the Bonaparte Basin are progressing as the lead candidate to provide backfill gas to Darwin LNG.

At present, the Federal Government’s intervention in the east coast gas markets has created a level of uncertainty for investors which is impacting our share price due to the lack of accompanying detail. The proposed Australian Domestic Gas Security Mechanism (ADGSM) will enable the Government to invoke liquefied natural gas (LNG) export controls when there is a reasonable prospect of a shortfall of gas supply in the domestic market in a forthcoming year. The ADGSM has been designed as a targeted and temporary measure.

In response, we are currently working closely with government, our joint-venture partners and the broader industry to not only ensure that gas remains available to homes and businesses across the east coast, but also to ensure the best outcome for our shareholders.

The Government expects the final mechanism to be in place by 1 July 2017.

Again, I appreciate your level of frustration and we are working very hard here at Santos to create shareholder value.

Regards,

Andrew."


Andrew Hay | Manager, Investor Relations
Santos Limited, 60 Flinders Street, Adelaide SA 5000