Australian (ASX) Stock Market Forum

STO - Santos Limited

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sptrawler said:
Don't know what's happening but $7.94 today, someone must be in the know.
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I doubt that there's anything to "know". Just a matter of STO - and many others - getting oversold in the big sell-off recently and now bouncing back somewhat. Let's see what happens offshore tonight!
 
ROE said:
Safer way to play STO is buy $500 worth and wait for Capital raising :), low risk with a decent chance of getting extra 15K on the cheap
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Talks started in the last week or so that STo has some pipelines to sell to inject liquidity and alleviate the need for a large capital raising. I think that partly explains the rise in the past few sessions.

I used to have a portfolio of "captial raising" stocks just as you described. But they don't really work very well these days. Many of them are renounceable rights issues and they limit the how many new shares you can apply in addition to your rights entitlement.

E.g. I have a tiny PDN position and they raised 1-for-2 @ 26c, you can apply for additional shares but I got scaled back to 50% of my holding. So now I simply increased my $500 holding to $800 holding so a bit of waste of time.
 
skc said:
Talks started in the last week or so that STo has some pipelines to sell to inject liquidity and alleviate the need for a large capital raising. I think that partly explains the rise in the past few sessions.

I used to have a portfolio of "captial raising" stocks just as you described. But they don't really work very well these days. Many of them are renounceable rights issues and they limit the how many new shares you can apply in addition to your rights entitlement.

E.g. I have a tiny PDN position and they raised 1-for-2 @ 26c, you can apply for additional shares but I got scaled back to 50% of my holding. So now I simply increased my $500 holding to $800 holding so a bit of waste of time.
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And with that - Santos announce a $1B facility with ANZ for 3 years. Good work sptrawler!

I thought the declining oil would play a negative role but I guess not?
 
JTLP said:
And with that - Santos announce a $1B facility with ANZ for 3 years. Good work sptrawler!

I thought the declining oil would play a negative role but I guess not?
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I wish I could jag those opportunities more often, 20% in a week.:D
I think I will hang on for $9.99.:xyxthumbs
Watch me get my fingers burnt.
 
SANTOS result published.
Probably market already discounted the current price with about $7 B debt and lower price per barrel.
I do not predict market behaviour if the price goes up today but not going to put my own money on this speculative move.
When I read the 132 or so pages casually in addition to massive losses and lower fuel price what I attracted my eyes that company has not made any provision for legal cost towards capital expenditure which is pretty common for a large assets like this. So for long term investors it is meant a high level surprise when government asks for each well abandonment and cost.
In addition the massive undersales in WA.
The sweetening tone is 6% increase in underlying profit does not sweeten the whole scenario.
I will be watching for market to react but not going to sell family jewels to buy STO today.
No wonder this thread is not looked by ASF readers.
 
Is there any one following SANTOS and would like to share thoughts ?
Got the DLS published STO shares and it did not appreciate toe noise
 
Miner said:
Is there any one following SANTOS and would like to share thoughts ?
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Well, it's not looking hot. The oil price has started to fall again and it looks like a new low could be printed. The STO chart is basically following the same pattern and is precariously hanging around the December low. It could easily crash through that tomorrow.

Capture.JPG

IMO they need to bit the bullet and raise capital (or sell some assets).

Miner said:
Got the DLS published STO shares and it did not appreciate toe noise
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Not sure what you meant here.
 
Miner said:
Is there any one following SANTOS and would like to share thoughts ?
Got the DLS published STO shares and it did not appreciate toe noise
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Just bought a bunch last week at $7.10.

Why am I suicidal?

All directors seem to have bought it around that to $7.30 (last December?). Good enough for me. :D

OK, a few other quick look that might give me whiplashes later:

- at $7.11, equivalent of $6.9Billion market value; compare to around $9.4, say $10Billion book value.
- So that's 30% off.

- At same price, market implied STO will grow at ~2.5% p.a. next 7 to 10 years based on Graham and Dodd's shorthand thingymajig).

I don't think STO grow at such low rate for next decade. Not given the couple of major projects it's getting online this year and the next; not given its projection of doubling output by 2020 [?] from current and almost completed production capacity.

And to oil price being halved. Read storage spaces are running out around the world. Should get there around July this year at current rate. So oil producers will have to cut back supplies or throw it out or something.

Don't like its capital structure, but it's been like that throughout its life except for after the GFC where it raises more equity. So it's not in financial distress. Operating cash would need to decline 93-95% for it to default.

It's about to complete its investments, major capex expenses and who knows, could be about to reap the rewards. But if capital is needed, won't be raising equity at such low market price (I hope) so either sell off assets or borrow. Doesn't seem like a good idea to sell assets at the moment, and debt ratio is at normal levels and with cheap credit might opt for that.

I haven't look at the finer details, or management, and don't really know much about oil either... haha... but it's only money.
 
This analysis was posted elsewhere last Tuesday.

Triangle target $6.10 but wave equality projection lower as shown on the chart. This assumes a 5-wave move is unfolding lower which definitely appears to be the case.
 

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Santos hit a near 12 year low today, looking at the all data chart going back to 1988 its easy to see the oil price bubble of the last 9 - 10 years and the current low, the last time i bought STO was after a big explosion and plant shut down in early 2004, paid $5 something, 12 years later and we are almost back to that price.
~
 

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Will be interesting to see if the recent denials of capital raising plans will stay that way with tomorrows results.
 
Hey guys,

What dose everyone think about this sub $6 price atm? Will it hold or drop further? Opec is making a supply decision in December I believe.

Marti
 
tanti said:
Hey guys,

What dose everyone think about this sub $6 price atm? Will it hold or drop further? Opec is making a supply decision in December I believe.

Marti
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Well there is hope

Santos has managed to climb 0.8 per cent despite a close to 90 per cent drop in core profits, a lower dividend, and the announcement of the resignation of its CEO.
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But it really doesn't read that well, does it!
 
What are the chances of a take over, at these prices, some must be running their ruler over them.

The gas reserves plus the infrastructure assets, are a long term play, as oil prices must recover IMO, OPEC will be hurting as much as anyone else.

It is obvious that O/S companies are eyeing off Australian assets, as has been seen with the Toll and Asciano take overs.
 
sptrawler said:
What are the chances of a take over, at these prices, some must be running their ruler over them.

The gas reserves plus the infrastructure assets, are a long term play, as oil prices must recover IMO, OPEC will be hurting as much as anyone else.

It is obvious that O/S companies are eyeing off Australian assets, as has been seen with the Toll and Asciano take overs.
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Once you have run your ruler over them you will NOT want to do a take over, STO is over.
 
oldblue said:
Perhaps.

Nevertheless, today's AFR reckons that STO is setting up datarooms for potential suitors. Selected assets only?
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would see this more as selling the family silverware to pay the cash converter loan....a bit harsh but
 
WPL chose OSH instead of STO on a 75% off sale.

Must give a bit of reality to the situation.

Unless conspiracy theorists think the WPL CEO is shorting STO (I'm sure a HC thread has started).
 


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