What is worthless?, page-174

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Santos says it's well placed to weather wild ride of oil prices and share price drops
Oil and gas producer Santos has shrugged off oil price woes and says it is settling in for the eventual price recovery.
The price of Australian liquefied natural gas (LNG) sold into Asia is calculated using the oil price.
West Texas Crude is sitting at $US48.14 barrel, a six-year low.
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Audio: Santos CEO, David Knox, on cost cutting (ABC Rural)
And like other oil and gas producers such as Woodside, BHP Petroleum and Beach Energy, Santos has had a torrid time of late.
The Santos share price has plummeted, halving in value in less than four months to $7.40.
It has been forced to slash exploration expenditure by $700 million and is considering selling assets, including a pipeline at its GLNG project at Gladstone in Queensland.
Just days ago investment bank Credit Suisse declared the company's value as 'worthless' at current oil prices.
It then issued a clarification 24 hours later, reiterating the 'worthless' value it put on the Santos share price was directly related to a continued low oil price, and it didn't believe they would remain low indefinitely.
"Clearly things have got out of control, and that statement is clearly nonsensical," said CEO David Knox.
"Our projects here in Australia and in PNG and Asia have lifespans of 20 to 30 years, and it gives Santos a very solid base."
Another research house, Citi, declared Australian oil and gas company shares were a good buy.
The oil price is cyclical, it goes up and it goes down. It wasn't many months ago it was above $US100 barrel
David Knox, CEO, Santos
Santos CEO David Knox admitted the company was being squeezed, but said that was part of being involved in the volatile energy industry.
"We're a very long term industry. We invest on five to ten year cycles," he said.
"So the real question, that goes to the heart of the value equation for a company such as us, is what's the oil price going to be in 2017, 2018 and way beyond?
"It's not possible to put an absolute number on it, but of course we recognise the oil price is cyclical, it goes up and it goes down.
"It wasn't many months ago it was above $US100 barrel. Today it is about $US46.
"But in the long term, the world needs energy. By 2030, it's estimated there will be more than eight billion people in the world.
"And the International Energy Association believes they're going to need up to 50 per cent more energy.
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Audio: Santos CEO, David Knox, on cost cutting, the oil price, share price, analyst ratings and future developments (ABC Rural)
"Where's that going to come from? Some will come from gas, some from renewables, for sure, but the world is going to need more energy.
"And more energy of a lower carbon footprint than coal, which is why gas is going to be crucially important to global energy supplies."
Anti coal seam gas activists and market watchers alike have questioned the ability of Santos to meet its obligation to deliver LNG from the massive GLNG project it operates on Curtis Island at Gladstone, Queensland.
The first shipment of LNG left the island early last week, leading to predictions that CSG will be Australia's leading industry by value in 2015.
"What we're doing in Gladstone we're doing within our budget, and we'll be bringing it in on schedule," Mr Knox said.
"We've got good, strong sale contracts into Korea and the Malaysian peninsula.