STO - Santos Limited
- Thread starter RichKid
- Start date
-
- Tags
- santos santos limited sto
Anyone still holding or following STO with interest?
I was lucky to take a position in August last year as it broke its long term downtrend on the weekly charts. It has been moving up and up nicely and was pleasantly surprised with the TO.
I will continue to hold as STO is they are turning things around and the price of oil is steady at circa US$63
I was lucky to take a position in August last year as it broke its long term downtrend on the weekly charts. It has been moving up and up nicely and was pleasantly surprised with the TO.
I will continue to hold as STO is they are turning things around and the price of oil is steady at circa US$63
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
Still holding.
Jumped in too early at around $7. Lucky to averaged down to about $5.40s or so. So if offer goes ahead, will make profit but not as big as it could be if I took a holiday or something around that time.
There are concerns that the takeover might be rejected on National Security grounds. I doubt that though.
There are some 3 major LNG players in Australia? Santos being the 3rd largest? Hard to make a case based on that. The states... do they have much say on takeovers?
Maybe this is wishful thinking but with oil looking like it'll either stay at this level or move higher rather than lower, might get counter offers from the Chinese or the Middle Eastern sheikhs.
I'm more worried about a GFC number two ruining the party than Canberra on this one.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
https://www.smh.com.au/business/com...worth-substantially-more-20180503-p4zd3n.html
"
The rising oil price means US private equity firm Harbour Energy's $13.5 billion takeover bid for Santos may have to be lifted to get more attention from the company.
At its annual general meeting on Thursday, Santos revealed it had divested a suite of non-core Asian assets and said it was focused on its operations rather than Harbour Energy’s "uncertain" offer."
Maybe a $7+ offer?
Iran is most likely going to be sanctioned, again, this coming May 12th. That'll be one big tap being shut off.
The Saudis might get their planned prices up between $80 to $100.
"Every $US10 increment in the oil price above our free cash flow breakeven will generate around $US250 million to $US300 million in free cash flow per year," chief executive Kevin Gallagher said.
Incredible how quickly fortune could turn.
"
The rising oil price means US private equity firm Harbour Energy's $13.5 billion takeover bid for Santos may have to be lifted to get more attention from the company.
At its annual general meeting on Thursday, Santos revealed it had divested a suite of non-core Asian assets and said it was focused on its operations rather than Harbour Energy’s "uncertain" offer."
Maybe a $7+ offer?
Iran is most likely going to be sanctioned, again, this coming May 12th. That'll be one big tap being shut off.
The Saudis might get their planned prices up between $80 to $100.
"Every $US10 increment in the oil price above our free cash flow breakeven will generate around $US250 million to $US300 million in free cash flow per year," chief executive Kevin Gallagher said.
Incredible how quickly fortune could turn.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
Who's betting Santos will reject the current offer?
Seems Harbour [Habor?] made the Chinese an offer they can't refused. But as various AFR articles are saying, STO had gotten a lot more valuable since the first public offer a few weeks ago.
There's the oil prices gaining some 17%, the approval to frack the crap out of NW NSW (for the state and its battlers gas security); some field in NT and LNG, more reserves discovered in its fields.... So current offer of $US4.98 could be $500M to $1B short.
Seems Harbour [Habor?] made the Chinese an offer they can't refused. But as various AFR articles are saying, STO had gotten a lot more valuable since the first public offer a few weeks ago.
There's the oil prices gaining some 17%, the approval to frack the crap out of NW NSW (for the state and its battlers gas security); some field in NT and LNG, more reserves discovered in its fields.... So current offer of $US4.98 could be $500M to $1B short.
I also think the Santos board will reject the offer. Santos has transformed their business over the last two years and cut down costs, sold non core assets to become a low cost producer (free cash flow breakeven at $36 a barrel). Oil prices currently being just shy of USD$79 a barrel, Santos is making very good cash. Oil prices are at a 3 year high so there should be some good momentum.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
I think so too.
With Santos saying that for every $US5 increase per barrel they gain $US250M in free cash per year [?]. It's increased some $15 since the public offer.
Iran being sanctioned, Venezuela being sanctioned with their oil infrastructure crumbling and expects to reduce output from 1.5mbpd to some 1M. That would take around 2to3 million off the market.
With new report showing the average 5 year global inventory is currently below demand; demand from Asia (and the world) rising... under-investment in the past few years; only 1 out of 3 offshore barrel extracted being replaced. The macro is definitely looking bright for oil in the medium to longer term.
For Santos to accept the current offer would be quite irresponsible.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
Based on their US-dollar offer, it's now $5.21 from $4.98... that's only a 4.6% increase.
Oil had since increased from $65 to $80, or 23%.
Santos could argue that the future of oil is looking pretty good and there's more room for the offer price to go.
In not making a one or two firm offer, Harbour is just opening up options for a higher price. Since they're not amateurs at these sort of thing, maybe they're really anxious to take Santos before the Chinese or other gulf states make a better offer.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
Where's Sceptre?
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
https://www.reuters.com/article/us-...billion-bid-as-oil-prices-surge-idUSKCN1IN10S
Australia's Santos rejects Harbour Energy's $10.8 billion bid as oil prices surge
(Reuters) - Australia’s Santos (STO.AX) said on Tuesday it terminated discussions with Harbour Energy and rejected the U.S.-based company’s final takeover offer of $10.8 billion, saying it undervalues the oil and gas producer as oil prices surge.
Harbour made a final offer for Santos this week, hiking its bid for a fifth time in nine months after a steep rise in global crude oil prices.
“(The board) resolved to reject the final proposal on the basis that it does not represent a full value of the company and, when combined with the associated risks, is not in the best interests of Santos shareholders,” Santos said in a statement.
Australia's Santos rejects Harbour Energy's $10.8 billion bid as oil prices surge
(Reuters) - Australia’s Santos (STO.AX) said on Tuesday it terminated discussions with Harbour Energy and rejected the U.S.-based company’s final takeover offer of $10.8 billion, saying it undervalues the oil and gas producer as oil prices surge.
Harbour made a final offer for Santos this week, hiking its bid for a fifth time in nine months after a steep rise in global crude oil prices.
“(The board) resolved to reject the final proposal on the basis that it does not represent a full value of the company and, when combined with the associated risks, is not in the best interests of Santos shareholders,” Santos said in a statement.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
I agree.
Their final offer is too risky, too low. Asking Santos to hedge our oil in a rising environment just after the crash. What happen if FIRB don't approve but our production are already hedged in a rising oil market?
There's the unfair treatment with major shareholders; the price being offered only in US dollars but their "best" offer counts the rise in AUD instead.
Board's doing good. The share price tomorrow won't be fun though.
The SP has recovered and held up well after concluding takeover talks, which is very promising. It finished at around the same price as the initial takeover announcement on 03 April 2018.
Next price target is circa $7.50 where there will be some resistance if it breaks that it is blue skies ahead, if oil price maintains it currents price, my expectations is in the near term within 6 months, unless there is an update in between.
Next price target is circa $7.50 where there will be some resistance if it breaks that it is blue skies ahead, if oil price maintains it currents price, my expectations is in the near term within 6 months, unless there is an update in between.
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
Good AFR article on the takeover.
https://www.afr.com/business/energy...ergy-this-is-the-inside-story-20180601-h10ub7
https://www.afr.com/business/energy...ergy-this-is-the-inside-story-20180601-h10ub7
Santos announces acquisition of Quadrant Energy.
A quick review of the acquisition is very positive. This should bode very well for the share price, well done to Kevin Gallagher and the excom team.
Santos also reports tomorrow so let's see how this goes.
In addition to the highlights below:
The acquisition reduces the cash flow breakeven to $32 per barrel a reduction of A $4 per barrel.
A quick review of the acquisition is very positive. This should bode very well for the share price, well done to Kevin Gallagher and the excom team.
Santos also reports tomorrow so let's see how this goes.
In addition to the highlights below:
The acquisition reduces the cash flow breakeven to $32 per barrel a reduction of A $4 per barrel.
Last edited:
- Joined
- 2 May 2007
- Posts
- 4,698
- Reactions
- 2,907
Bingo for Santos share holders.
Wesfarmers already sold out their full quota and got cash.
So on Thursday would market accept it or just drill down ?
- Joined
- 21 April 2014
- Posts
- 7,956
- Reactions
- 1,070
The market should be positive towards this. A bit more debt but the sales growth, per share earnings accretive, synergies... propelling Santos to be Australia's largest domestic gasman.
I scanned through the AFR on Quardrant's oil equiv. last year and the potential reserves... my calculator at $50 per barrel makes the purchase price look very, very reasonable.
But then maybe the market had already priced this in? There's rumour of it for a couple months at least now.
