Will Santos ever recover?, page-6

First 6 Last

Share
Profile

Follow
Grow Rich

2,336 Posts.

181

28/09/17

09:51

Post #: 27509772
Share
Originally posted by googoogaga ↑

Report from Livewire a few days ago...

GET INSIGHTS

Santos: The trend has turned

ROMANO SALA TENNAKatana Asset Management
6 days ago

In the true tradition of denial, we have maintained our position in Santos, and in fact, have added a modest amount over the past 12 months. Whilst it has been a particularly challenging period for both the company and investors, there are growing signs that the ship has been righted and that there are better times ahead.

1) Drilling Costs : drilling costs have declined and most of this is structural (estimated at 75%) not cyclical (ie labour costs etc , 25%). Some dramatic examples:

$6m /28 days to drill a well in the Cooper basin in 2014; today $2.8m / 12 days.

Aroma well cost $5m at FID; today <$1m.

2) All Costs : Santos sighted FMG as an example of an organisation that has transitioned from top quartile to bottom quartile on the cost curve through the relentless pursuit of efficiency and by challenging every aspect of what they are doing. This is the first time in nearly a decade that STO has not had a major project under development, which provides an opportunity to focus almost exclusively on costs.

3) Long Life Assets: 4 assets have decade plus lives with very little/further development. This provides a solid platform for growth.

4) 3 Growth projects; Santos’s existing portfolio offers multiple growth options. The top 3 priorities at present are to:

Triple production from Darwin LNG (by 2022/23)

Expand its involvement in PNG LNG by leveraging the Muruk discovery to become a partner in 3 trains with revenue from a 4th by (2024)

Progress Narrabri – initially by bringing this asset into its core portfolio with a view to finalising a decision and structure by late 2020. The original IRR was robust on old numbers – new cost estimates will further enhance the economics and by a significant margin.

5) GLNG 6mtpa: Santos now see GLNG as a 6mtpa producer rather than 7.8mtpa (nameplate) or 8mtpa+ (streamlined). This level of production can be met from:

Own gas plus

Already contracted gas from 3rd parties (via ~5 long term existing contracts).

Production will spike above this level ‘opportunistically’- ie where there is surplus gas in the system at a good price – but not as a base case. This re-thinking makes a lot of sense given the tightness in the east coast gas market.

As a final point, STO noted that the gas price makes up only 27% of the total cost of electricity. The sense is that the Government may be shifting its focus from gas producers to the electricity generators themselves.

Expand

Good post Goog.

The management of STO has done a good job.

Only a takeover speculation can accelerate the share price of STO from now. Oil price is so unreliable.
STO Price at posting: $4.14 Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

Reply

Top Stories

TYP

Tryptamine enrolling binge eaters for magic mushrooms study

PTX

This rare type of lymphoma ruins the body – so do existing treatments. Prescient could have a solution

NWC

New World board urges holders to accept Kinterra's now-uncontested takeover bid

Listen: HotCopper Wire Podcast 018 – Potatoes, TACOs, and the $120M helicopter heist

PSC

Prospect's Mumbezhi Project puts it at the middle of copper's megatrend. And FQM just bought in

There are more pages in this discussion • 211 more messages in this thread...

First 6 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

(20min delay)
Last $7.79		Change -0.010(0.13%)		Mkt cap ! $25.30B

Open	High	Low	Value	Volume
$7.79	$7.81	$7.78	$4.559M	585.3K

Buyers (Bids)

No.	Vol.	Price($)
56	58187	$7.78

Sellers (Offers)

Price($)	Vol.	No.
$7.79	53263	37

View Market Depth

No.	Vol.	Price($)
57	55256	7.780
32	68770	7.770
28	74125	7.760
18	76867	7.750
10	69316	7.740

Price($)	Vol.	No.
7.790	32831	29
7.800	53706	18
7.810	28646	15
7.820	68126	30
7.830	60972	19

Last trade - 11.27am 21/07/2025 (20 minute delay)

STO (ASX) Chart

Will Santos ever recover?, page-6

Tryptamine enrolling binge eaters for magic mushrooms study

This rare type of lymphoma ruins the body – so do existing treatments. Prescient could have a solution

New World board urges holders to accept Kinterra's now-uncontested takeover bid

Listen: HotCopper Wire Podcast 018 – Potatoes, TACOs, and the $120M helicopter heist

Prospect's Mumbezhi Project puts it at the middle of copper's megatrend. And FQM just bought in

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Will Santos ever recover?, page-6

Top Stories

Tryptamine enrolling binge eaters for magic mushrooms study

This rare type of lymphoma ruins the body – so do existing treatments. Prescient could have a solution

New World board urges holders to accept Kinterra's now-uncontested takeover bid

Listen: HotCopper Wire Podcast 018 – Potatoes, TACOs, and the $120M helicopter heist

Prospect's Mumbezhi Project puts it at the middle of copper's megatrend. And FQM just bought in

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News