STO Santos Limited

[Daytr]

Ok whatever makes you feel better.
If I got it so wrong, how come I have made so much money out of shorting it?
Oh yeah because I was right it was going down, down, down. I made some pretty big calls on STO & Oil and they are proving right by looks.
I actually said that $6.92 was significant support on several occasions and it duly bounced, but I also said it would eventually go much, much lower & it has. I also predicted that oil was having a seasonal bounce and it was again going to revisit the lows & possibly target the low to mid 30s for WTI.
Well we aren't far off that now.
But apparently even when I get it right its wrong. Can't win with some people, only the market.
STO now touched that $4-5 range I have been talking about.
Currently down 11%!
Global equities obviously assisting with a bit of a meltdown going on.
Anyway as I said, I hope it works out for you.



You never predicted anything just made your calls after the fact. I didn't ignore what you said I just rejected it as the market noise it was/is.
I can't hold off buying stocks just in case they go cheaper, because it's not predictable.
You said it would go down to $4, it went to $9 if someone had shorted they would be killed. Then once the price was back down to $7 you started with your noise again and were correct, but 50/50 is rubbish performance.
May as well flip a coin or go to the casino, I prefer to invest.

[Joshuatree]

You guys are very entertaining ; bitching away , trying to get one up on each other, like sibling rivalry; some light relief for us:t_up:. I do think averaging down on anything increases ones risk of losing.

[Daytr]

Well one person has been talking this stock up and one has been talking it down, and its well down in fact it's now has a 30% valuation of what it did only a year ago. I just get a bit annoyed when someone still wont give you credence for what were pretty big calls.
Horse to water and all that. But fair enough what's the point.
Anyway overall PSE might do ok in the long run, as I also have always said, but STO probably do need to bite the bullet on that CR.
They maybe able to muddle through, although they will be wanting a bounce in oil as being cashflow negative which I expect they are at the current poo. And any length of time that is the case is a real problem when you have a mountain of debt.



You guys are very entertaining ; bitching away , trying to get one up on each other, like sibling rivalry; some light relief for us:t_up:. I do think averaging down on anything increases ones risk of losing.

[PSE]

US oil production declined in July vs June, low oil prices being the cure for low oil prices.
http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf
At present Brent Crude price STO is making maybe only 200m free cashflow once GLNG is complete, however this is an unrealistically pessimistic scenario.
STO is still a bargain, would be great to know where the bottom is on the shareprice but it is still totally unpredictable. We will only know once we have passed it and can look back.

[Daytr]

ASX200 up 3.3% STO down over 4% & now well and truly in that $4-5 range.
I'm still not feeling the love though.
North American production will be curtailed through price, but replaced by Brent imports.
Over time you would expect higher prices of poo, but it may take a wee bit of time & that's an issue for debt laden companies.

[Schrodinger]

I maybe pre-empting the bottom but oil stocks look like a great buy at the moment. Long term I expect the price to head back to $75

[Daytr]

Depends on the company Schrodinger.
Companies with little or no debt I would suggest in this environment.
Banks tend to get an itchy trigger finger when markets are chaotic and cashflow is weak on debt laden companies.
Obviously that sort price can't be ruled out & I suspect you are right if the Republicans re-gain the oval office.
Otherwise I would suggest $40-60 is more likely the new norm.

[Schrodinger]

Yes OSH looks like a more solid bet than STO due to a few factors (debt/reserves). I would expect STO to lower dividends at some stage if profitability is hit. It will be interesting to see when the USA and Saudi stop the "lets get Russia" routine and restrict supply. Long term I would expect the price to appreciate and maybe go over $100 but this could be based on the way the markets used to work (geopolitical Middle East tension=increase oil price)

[Daytr]

Funny thing is its costing them trillions if its all just about Russia. I think Russia is a red herring in all this.
Its more about trying to shut down alternatives to oil such as renewable energy & also reclaim market share.
Some commentators think we maybe heading to an era of basically free energy. i.e. the sun, wind etc.

[PSE]

Yes OSH looks like a more solid bet than STO due to a few factors (debt/reserves). I would expect STO to lower dividends at some stage if profitability is hit. It will be interesting to see when the USA and Saudi stop the "lets get Russia" routine and restrict supply. Long term I would expect the price to appreciate and maybe go over $100 but this could be based on the way the markets used to work (geopolitical Middle East tension=increase oil price)
I agree with Daytr that STO should have already cut the dividend.
The debt at STO is too high but that has driven the shareprice to a ludicrous price relative to OSH at present. The view that OSH is a 'more solid' bet than STO is fundamentally correct but when taken to extremes means that there are simply no buyers for STO.
If you think brent crude will stay below $45 for an extended period then STO will need a capital raising, not the end of the world in my view but will reduce returns.
On the other hand if the US oil production continues to decline and prices recover even modestly the returns on STO are fantastic.
The dividend is presently 30c/share but based on analyst estimates of future oil prices (as much as these can be trusted) it will increase to 60c in the next few years. At this point everyone will be able to see what an outstanding opportunity STO is at $4.96.
I bought some more today won't get any more though can't have too much in one company.
Do your own research and don't trust me please :) just sharing my thoughts not making a recommendation.

[Schrodinger]

I agree with Daytr that STO should have already cut the dividend.
The debt at STO is too high but that has driven the shareprice to a ludicrous price relative to OSH at present. The view that OSH is a 'more solid' bet than STO is fundamentally correct but when taken to extremes means that there are simply no buyers for STO.
If you think brent crude will stay below $45 for an extended period then STO will need a capital raising, not the end of the world in my view but will reduce returns.
On the other hand if the US oil production continues to decline and prices recover even modestly the returns on STO are fantastic.
The dividend is presently 30c/share but based on analyst estimates of future oil prices (as much as these can be trusted) it will increase to 60c in the next few years. At this point everyone will be able to see what an outstanding opportunity STO is at $4.96.
I bought some more today won't get any more though can't have too much in one company.
Do your own research and don't trust me please :) just sharing my thoughts not making a recommendation.

Agree with your comments here. What is harder to judge is the intentions of the major oil nations and what is an agreeable world price over the next two years. In the past I think the Saudis quoted $75 ish as an acceptable level during OPEC negotiations. Obviously Shale has changed the industry dynamics and this may mean the acceptable world price **might** be lower. I have been following Goldman closely on this as their predictions have been accurate up to this point. Not sure of their current forecast but a few months back they said oil could be in the $40 range for at least the next 6 months.

[Daytr]

Never take what the Saudis say publicly in regards the oil price as what they mean.
They are past masters at saying one thing and doing another. A bit like the Chinese.
Strong bounce for STO today and its bounced twice now off that $4.70-80 area, suggesting it is finally finding some support.
I still think we are going to see another sharp shove lower in oil and I fully expect to see a debt crisis associated with US oil production.
When we start seeing that, I think we will know we are getting close to a bottom.
I'm looking at 4th quarter I would say in regards timing, subject to there being no major supply disruption.

[PSE]

......
I'm looking at 4th quarter I would say in regards timing, subject to there being no major supply disruption.
So long or short Daytr? Can you give me a day and a price so I can save up to buy at the bottom and explain how it is done beforehand.
Thats a pretty big if on the supply disruption can you make sure that doesn't happen so I can hold off buying until I have your permission?

[Daytr]

Neither, I covered my short yesterday.
You can be sarcastic all you like, but these are just my thoughts around the seasonality of the oil market and relying on my years of experience trading oil for a living. Combine that with GLNG kicking in, just seems about the timing to me.
That doesn't mean I'll be right, but who is all the time.
So far so good though in regards oil & STO.


So long or short Daytr? Can you give me a day and a price so I can save up to buy at the bottom and explain how it is done beforehand.
Thats a pretty big if on the supply disruption can you make sure that doesn't happen so I can hold off buying until I have your permission?

[PSE]

Neither, I covered my short yesterday.
You can be sarcastic all you like, but these are just my thoughts around the seasonality of the oil market and relying on my years of experience trading oil for a living. Combine that with GLNG kicking in, just seems about the timing to me.
That doesn't mean I'll be right, but who is all the time.
So far so good though in regards oil & STO.
I am right all the time, because I don't try to predict things I can't predict - like the price of oil in the short term.
Note when STO was at $7 I didn't say it was going up in the short term, I expected the price to be volatile and though I considered a fall to $4 or $5 unlikely I said I didn't know. I was happy to buy at a good price at the risk of missing an opportunity to buy at a better price.
OK so do you disagree or agree with my investment? Or are you only going to tell me with the benefit of hindsight because that's just pure aggravation with no use.

[PSE]

As you are an expert in oil trading Daytr here's a well reasoned argument that oil is due for a recovery.
The author lost money but at least put his money where his mouth is.
http://www.valuewalk.com/2015/08/andrew-hall-letters/
If you can point out the errors in this article I will consider myself better informed and thank you for it.

[Daytr]

Well I have been paid to predict things for twenty years, mostly commodities, so we are obviously from very different perspectives.
You do predict things, by the simple fact that you invest in shares.
I wont invest in something when I think its underlying product is going to lose substantial value, like oil has.
I predicted this oil collapse well over a year ago.
Re the article it really just points to the obvious in regards how lower prices will eventually impact North American high cost production.
No kidding, this is what the Saudis are trying to achieve.
The spiel about a surplus not eventuating as predicted, is just simply incorrect.
It ignores things like the massive efficiency changes in car engines and how most Americans have traded in the 5L pick up for a 2L Toyota.
It also doesn't cover Iran, Iraq, Russia and other major producers and how they are all fighting for market share, or that if oil does rebound strongly US shale & the like can be brought back on stream pretty quickly. The Saudis know this and will try & prevent the same happening again.
Its a very complex market and very difficult to cover all the aspects, but I try and keep up to date with the main drivers.
Things can obviously change & come from left field that can't be predicted, like war or other supply disruptions.
Over time demand from the likes of China & India you would think increases, but China is looking at electric cars in a big way & I think we will see a shift to them in the Western World over the next 10 years as well, that and perhaps hydro fuel cell.

Anyway its a big topic & I could go on for hours, but that's my skim of the surface take at the moment.

[PSE]

Thanks for that.
Actually all those things are covered, people in the US haven't swapped cars in the last six months so thats wrong. Solar is still marginal and hasn't affected oil demand, electric cars are restricted by battery range and a grid that runs on fossil fuels. People don't want cars with volatile hydrogen tanks rightly or wrongly although this technology is promising.
Iran, Iraq and Russia are covered, Iraq is mentioned to be at full production now so unable to increase further as US shale drops off. It seems that geopolitical risks are underestimated, as Andrew Hall says Iraq is losing the civil war with IS and the Kurdistan government argues with them about who gets the money.
So your skim of the surface take seems weak to me, and still you can't tell me is STO a buy or a sell at $5.12 or whatever it is today?
My position has always been clear, buy at $7 buy at $5 if you are a long term investor and can lock the shares into the bottom draw ignoring the fluctuations as meaningless.
Your position has never been clear to me, or at least sometimes you think oil is falling but the real question is when will oil recover.?
Or do you think not at all? That seems extremely far fetched.
It's not a matter of perspective, black and white is STO a good investment? If you don't have a view why have you been arguing with me?
Yes I predict things I understand so that I am not wrong, keeping it simple. With the complexities involved accurately predicting the short term price of oil is impossible, all the experts try and fail how could I beat them?
Knowing that oil will rise over the longer term is relatively simple and I have proven it to my satisfaction, the odds that STO will ride through without a capital raising are very good and when it does the returns will be exceptional. A capital raising is also no big deal.

[Daytr]

The link initially only brought up the first page for some reason, I see now there is more so will read tomorrow.
But I wont bother reverting. I'm not here to argue with you about what I think in regards oil. Especially when its not appreciated.
You just don't listen I have said over and over that buying at $7 will probably prove to be ok in the very long run.
Right here is more likely to be ok.
But its not without risk, due to debt and as you rightly say no one can predict what the oil price might do.
If it stays lower for longer than even I expect then STO becomes very risky.
My fluctuations as you put it have made me over $4 & in fact as I shorted it many times it's made me a lot more than that.
I don't think its either a buy or sell at $5.12, as I think there will be opportunities to buy it lower as I have said over & over.
You really must get a hearing check. Now I could be wrong, but it wont cost me anything if I am & in the mean time I have banked a very handsome profit on my short as I hope you do eventually on your long.
You seem to live in a very back and white world. I monitor things daily and things change daily and with it my view, as new information comes to hand.
Sometimes it will strengthen the same view other times the opposite.
The world is constantly changing and I choose to adapt with the times accordingly.
But that's the nature of a trader.

[PSE]

And it's a fact that traders generally lose money and all the wealthiest people on earth are varing shades of value investors living in our black and white world :) slowly and steadily never losing money.
So you say don't buy at $5 as there will be chances to buy cheaper.
Great.

[Daytr]

Just not in this case eh.
Really? I could name probably as many successful traders.
All banks have traders and they make billions year on year.
But just as investors, traders to lose money at times.
There is no right or wrong way, it just depends what you are good at & discipline is the key.
Nope I said I wont buy at $5, others will do what they like.
Never losing money, Yeah right. You are wasting my time.


And it's a fact that traders generally lose money and all the wealthiest people on earth are varing shades of value investors living in our black and white world :) slowly and steadily never losing money.
So you say don't buy at $5 as there will be chances to buy cheaper.
Great.

[Daytr]

haha, Black and white & white is black!
Makes me laugh, you constantly misunderstand me.
I have never said your strategy wont pay off, in fact I have suggested quite the opposite.
And you should stick with it, as it clearly works for you.
But like a good trader it takes a good investor to make the right picks, although I would suggest investing is generally easier.
I do both.
However I don't have the blind faith that you do that things will always just come right.
Valuation on STO at much higher levels i.e. $9Bln or higher are based on much, much higher oil prices and there is no guarantee of that, well not in the short to medium term & meanwhile STO has a mountain of debt.
So IF STO has to start chewing through more debt to stay alive, another words they are cashflow negative, or certain other ratios are triggered then debt covenants get triggered as well. I'm not saying that will happen, but it certainly could.
While buying at this level is a much better bet than at $7 as lets face it you can make close to 50% before you break even on your other trade, but its still not a no brainer.
New CEO to start and there is a reasonable chance of a capital raising & if so that is likely to mean a price quite a bit lower than where it is now.
Poo will obviously dictate.

[PSE]

I don't have any blind faith, I have looked into the numbers which is what gives me the courage of my convictions.
Yes investing is easier.

[Daytr]

What numbers? This has been my whole point.
The numbers have to be based on an oil price.
At what I think was a USD60 price average in the first six months they just barely made a profit.
Brent is now $43.40.
So when I say blind faith, which is probably a bit harsh, its in regards that the oil price will return to a very profitable level for them.
I would suggest that oil needs to average at a minimum $80/bbl to justify anywhere near the value placed on STO only a wee while ago of around $9.
In fact most analysts I read at the time were basing their price assumptions around those levels, $75-80/bbl oil.
I wouldn't be surprised to see oil at some stage touch those sorts of levels once there is a bust up in the North American oil industry, however I don't see it averaging those sorts of prices, but that's just my view on the current state of world affairs.

[PSE]

I don't need oil to return to $75 for an investment at $5 or $7 to turn out well.
Short term breakeven on cashflow at present brent, medium term a lot of cashflow even at $60 oil. I don't think a view on world affairs is very useful beyond my very simple one, the oversupply was caused by US shale and US shale is reducing output to correct the issue.
At the start that was my reason for buying, you say I am irrationally ignoring the facts. Factors have changed but my underlying story remains intact, if something happened to shake my reason for buying I would change my ideas but it probably won't happen.

[Daytr]

Well at the current poo STO revenue has dropped by over USD800M compared to the $60 price average they had for the 1st six months and they only made $39M in that period. I don't think they can reduce costs by anywhere near that sort of figure to make a buck.

Finally read that article. Its not bad and raises some good points.
One thing he gets horribly wrong though is the seasonality of oil. Summer is the demand season, not winter typically.
Perhaps if they get a very cold Northern Hemisphere winter it will help, but the premise that the demand is higher in these periods is just wrong.
We are now in hurricane season for the Gulf of Mexico, if they get through that relatively mildly then we should see prices lower again.

No mention of alternative energy besides gas either, which I think is missing why the point of why the Saudis are doing what they are doing.
One thing I do agree with, is that the risk to supply disruption in the Mid/East is not priced in at all.
But its one of those things, you can't really price when supply is abundant unless something actually happens.
Venezuela is another massive source of supply if they ever get their act together.
Not sure of their costs & how that may change with more production, but they have reserves similar to the Saudis.

[Joshuatree]

http://www.cnbc.com/2015/08/25/oil-is-the-biggest-investing-opportunity-strategist.html

Timing is everything:)

[PSE]

http://www.cnbc.com/2015/08/25/oil-is-the-biggest-investing-opportunity-strategist.html

Timing is everything:)
I would respectfully disagree, it is impossible to pick the exact timing.
In my view pricing is everything if you can hold for a few years with equanimity.

[Daytr]

Huge spike in oil overnight WTI up over 10%, Brent around 8% I think.
Massive short covering on the back of a very strong US GDP number.
Lower oil definitely creates broader economy strength overall as the consumer has more money in their pockets.
In saying all that, it doesn't change the supply situation for oil.

[Daytr]

US crude stocks are still at 450M bbls! Absolutely huge and that's just the US.
That's close to double what Andrew Hall reported PSE.
For someone writing a report on oil he made some very fundamental errors & perhaps was trying to paint a certain outcome?
He got the seasonality of crude demand completely wrong and under reported USD crude stocks by about 200M bbls!

http://www.bloomberg.com/news/articles/2015-08-26/oil-advances-as-u-s-crude-inventories-unexpectedly-decrease

[PSE]

I asked for it I guess but to be honest Daytr I am not interested too much in analyst forecasts for oil.
Andrew Hall is definitely talking up his position but also not lying about specifics (seasonality of demand or storage levels), he was wrong about the price of oil going up. Maybe it is just the dates of the report or something like that.
The oil price will rise something in the middle between the negative and positive analyst viewpoints if the future was certain they would all be saying the same thing.

[Daytr]

Yep, can't argue with that.
Not sure if he was lying or not, but he got some pretty fundamental things very wrong.
Anyway should be a nice green day for STO today.

[Aaron]

I guess anyone on this thread has already read this.
http://www.smh.com.au/business/energy/where-next-for-troubled-santos-20150830-gjayml.html

[Daytr]

Thanks Aaron, I hadn't seen it, but I felt like I had as its all the things I have been saying for some time.

[Daytr]

I'm back short by the way. ;-)
Covered at $4.85, now back short at $5.34.
Maybe a little premature & kicked myself for not hitting it above $5.50 last week, but there was just too much volatility.

[Daytr]

Another huge rally in oil overnight Brent & WTI up over 8% at one stage.
Glad I took my 4% intraday profit yesterday! STO should open much higher after 27% gains in oil in the last three sessions.
Looking at the chart STO could rally back to around $6, but if it does I'll be back short.
Shorted Brent this morning, but that too from a pure TA perspective could reach $60, but again would probably be a great shorting opportunity.
'There is fairly good resistance right here. Saudis want to talk to producers. What does that mean?

[Daytr]

Wow STO didn't pop as high as I thought it might and then tanked! Down 6%!
No news I can see, a little odd considering oil's surge in recent days.
I think people realize that they are currently loosing money at anything slightly below USD60/bbl Brent.

[Daytr]

Crude dumped again, day before's gains wiped out.
STO down 6% on a day when crude was up 7%, what's it going to be like today?
Damn I wish I had managed to get short again!
My target of $3.50 is now in real danger of being hit.
The real danger here is, its if the banks get nervous as there will be all sorts of debt covenants likely to be triggered.
If that happens a giant CR will be forced on them, rather than management choosing to raise capital.
So again IF that happens the dilution will be massive, however wiping out a chunk of debt is critical.

[mayday]

The assets sale is more likely to happen rather than cr if happens. GLNG project is on track of completion, sp shall recover from current bottom low once their cashflow turns into positive

http://www.afr.com/news/special-reports/australia-energy-future/lngs-huge-role-in-national-economy-20150831-gjbdrp

[Daytr]

Yep and just as it comes on stream the Asian price of LNG is being hammered.
Sure they can sell some assets, like the pipeline, however that will drive up operational costs.
And actually owning the infrastructure is the only thing that really makes sense in a downturn, unless of course the infrastructure is made redundant.
Also will the assets raise enough? They are hardly going to get good prices in the current market.
I said over six months ago they should have sold their crude oil plays and diversified into some green energy and continue with the gas.
But I also said they should have raised capital back then.
The thing is the options of what the management can or can't do maybe taken out of their hands by the banks.
Banks will make decisions that is right from them to protect their money & not necessarily in the best long term interests of the company.


The assets sale is more likely to happen rather than cr if happens. GLNG project is on track of completion, sp shall recover from current bottom low once their cashflow turns into positive

http://www.afr.com/news/special-reports/australia-energy-future/lngs-huge-role-in-national-economy-20150831-gjbdrp

[Daytr]

Hi PSE, I'm not suggesting foreclosure I'm suggesting they will perhaps force a capital raising.
How are they cashflow positive at $50 oil? They made $39M at $60 oil fo 6 months. That is a reduction in cashflow of USD1.1Bln pa.
GLNG wont be making up that difference, not by a long chalk.

There was an interesting post in regards the terms of the STO bonds issued and that if they get downgraded below BBB then that to can trigger an equity raising. I'm not expert on this and am paraphrasing a post on Hot Copper.

[PSE]

According to the posters on HC the bonds would be triggered if a change of control event caused a reduction in credit rating. It is likely that STOs credit rating will be downgraded but this shouldn't require redemption of bonds.
In any case I think the focus should be on the debt as the bonds are not such a large amount. Terms like those described actually seem good for shareholders participating pro rata in any capital raising. Of course they should have done it earlier, now they try to sneak through and maybe won't make it. No ideal but certainly not a crisis.

[macduffy]

Today's AFR has an article - behind the paywall of course - about STO setting up datarooms for potential suitors/buyers of selected assets. The market likes the idea and has marked the shares up 10% today.

[macduffy]

Another afr article attributes the oil search takeover offer as the culprit. It is all speculation, animal spirits.

Yes, looks like a false alarm as far as STO is concerned. Woodside opens merger talks with Oil Search.

http://www.theage.com.au/business/woodside-opens-merger-talks-with-oil-search-20150908-gjhddi.html

[Daytr]

Well sort of it will certainly put shorts on edge seeing a sharp rally like that.
I almost went long yesterday, but was sticking to my guns for a $3.50ish target level.
Would have been pure luck anyway, but nice to have!
It was up over 10% at one stage!
It will probably just settle back down as if you looks at the value placed on the deal still makes STO look expensive when considering their debt that you are buying into.

[mayday]

An interesting article to read

http://www.oaoa.com/inthepipeline/dennis_elam/article_ad4faa0a-544f-11e5-836b-4fb89972e70a.html

[Joshuatree]

Thanks very int ;covered a lot in a short article.And China in the bering sea too.

[Daytr]

I have had a sell order at $53 in Brent for some time, but yet to be hit! He too sees this as major resistance.
The footing for war in the Mid/East has certainly gone up a notch, although there doesn't seem to be an appetite yet for troops on the ground.
That could change & if so would obviously be seen as a potential for supply disruptions.

[JBmurc]

Brought a trading position 4.45 today just couldn't make my mind up on where to invest (low to nil volumes not helping) so think STO was looking good for a quick trade pure gut feeling along with trading depth and the fact of deal / T/O speculation

To think STO traded @ $14 a year ago ...

I see it's now trading @ 4.53 should I take the $200 2hr hold profit ....mmmmm

[JBmurc]

I like to "look at things in the aspect of eternity" rather than the next 5 minutes so really couldn't say.

No for sure ....still I'm $250 better off today sold @ 4.52 ...see how STO opens tomorrow ....not confident in the sector currently but like the high volumes traded in the likes of STO and must surely be closer to finding support and forming a base .. see how it goes tomorrow ..

[Daytr]

Brent smashed overnight, down 3.35%, interesting WTI down only less than half of that.
The gap between the two only $2.50 now.
I hold that WTI will return to a premium over Brent in the coming months.

[JBmurc]

Yes along with weaker market should add some downwards pressure on open for STO ....

Really at these levels your have your long term buyers up against the Traders (shorters etc)

STO issues are of course round the large debt in USD and the lower oil price .. but we get strength in OIL / AUD then STO will see further Buying interest ... yet like you DT I don't think the bottom has come for Oil just yet ..

Analyst on CNBC last night was very bearish on the near term for Oil with even a chance of high 20's spike low ...

Aussie new leadership ...

maybe another inter-day trade here today ... see what kind of base it can form today

[Daytr]

Really? So you bought more today PSE?
There is a nice bounce here & considering the move down in oil its been a very strong day.
The take over rejection by OSH I would suggest is what fueled it, however I think people should be asking themselves the questions why there hasn't been a move on STO rather than that there might be.
Basically to take over STO say at a 15% premium from the current SP you are paying A$16Bln including the debt.
For something at the current poo is losing money...
BBBIIIGGG punt!
I recon we may see $4.80ish perhaps even $5 again, but I will be looking to short if we do, subject to no new news breaking.


Buying from short sellers is ideal :t_up:.
They drive the price so low it is great, I guess I take my pound of flesh each time but it still works out well for them as the market is dominated by muppets who freak out and sell.

[mayday]

I recon we may see $4.80ish perhaps even $5 again, but I will be looking to short if we do, subject to no new news breaking.

DT, they don't really need 'breaking' news as I reckon.

http://www.wsj.com/articles/nikkei-up-choppy-trading-ahead-of-boj-decision-1442279838

.....Still, Santos, which recently said it would consider selling assets to bolster its balance sheet, advanced 3.1%. That followed a research report from Macquarie that estimated Santos would be the biggest beneficiaries of a lower Australian dollar among the country’s bigger energy companies.....

DYOR

Held + Buy

[Daytr]

Mayday, I would do some analysis on what impact a lower Aussie has on STO if I was you.
Quite simply with low oil prices & USD denominated debt, its a negative as the debt rises in value more than their revenue.
What's under pining the price at the moment is the value being placed on their PNG LNG assets which is the same project as Woodside just bid for that OSH own 29% of. Massive long term project, so it will be interesting what they could get for it in the current climate.

[mayday]

Mayday, I would do some analysis on what impact a lower Aussie has on STO if I was you.
Quite simply with low oil prices & USD denominated debt, its a negative as the debt rises in value more than their revenue.
What's under pining the price at the moment is the value being placed on their PNG LNG assets which is the same project as Woodside just bid for that OSH own 29% of. Massive long term project, so it will be interesting what they could get for it in the current climate.

"Market analysts believe that the offer made by Woodside for Oil Search implies a value of $6.5bn for Santos’s investment in Papua New Guinea...." let's make it 5b which means the single asset sale could help Santos to halve its current debts. By that, santos's debt issue'll no longer be an issue (after the sale)

[Daytr]

Well it cost them $2.5Bln & oil has halved in that time, however it is a great asset.
So it will be interesting what they could get for it.

[macduffy]

It happens regularly in the companies I invest in and I never lose, watch and learn Daytr.

Careful, PSE!

Getting very close to the "bit arrogant and boastful" bit there! I, too, think that STO will survive this oil price cycle but how it looks - and what assets it has left when the dust settles - is very much still in question. And Mr Market will no doubt have a lot more to say on the matter!

;)

[Daytr]

I wasn't referring to your position as big punt, although it could be, but that's your business.
I was referring to anyone paying a premium to make a takeover offer for STO.
Re hedging, they should have hedged the using Brent oil contracts.
If their debt was to be in USD they should have hedged USD oil, if Aussie then Aussie oil.
I advised them at the time to hedge 40-50% of their output over 3-5 years.
I also advised that they should have a good portion of their debt in AUD.


It's possible I may have to take a loss on an investment one day but only if I make a mistake. When it hasn't happened for so long I become a bit arrogant and boastful, I am still listening to arguments from Mr Market but haven't heard anything which concerns me.
He is just raving and frothing at the mouth again offering me STO for $4.5 is it now?
Yes there is such a beast as a pure value investor and times have never been better for the tiny minority with the ability to think differently from the crowd, to rely on our own judgment and ignore the noise.

[mayday]

Santos's sp keeps its momentum following previous closing day, Brent re bounced back above usd50 this morning

http://www.bloomberg.com/energy

But there is still 50/50 chance that fed may go for rate hike on Thu and therefore it will surely hurt global stock market even just for a short period.

Getting a headache now if I should take profit out before closing or put on a bet Fed will not increase rate at this time :confused:

[PSE]

I don't do short term sorry mayday, prefer a 3-5 year period. If I had to hazard a guess though I think the recovery for STO is set to happen in the next 6-12 months. From my perspective though if it takes another year it doesn't matter.

[JBmurc]

I don't do short term sorry mayday, prefer a 3-5 year period. If I had to hazard a guess though I think the recovery for STO is set to happen in the next 6-12 months. From my perspective though if it takes another year it doesn't matter.

Whats your average PSE ..... should have held onto my 4.45 ....would have made closer to 2k by now ....but thems the breaks in ST trading
still can't complain as long as I'm making a profit from the trade be it 2hrs to 6months I'm a happy trader ...

[JBmurc]

Santos's sp keeps its momentum following previous closing day, Brent re bounced back above usd50 this morning

http://www.bloomberg.com/energy

But there is still 50/50 chance that fed may go for rate hike on Thu and therefore it will surely hurt global stock market even just for a short period.

Getting a headache now if I should take profit out before closing or put on a bet Fed will not increase rate at this time :confused:

You don't go broke taking a profit ...it really comes down to your style of investing ....if your not a TAX paying trader .... then hold the trend IMHO

[mayday]

Hi PSE and JB, thanks for sharing your thoughts. Just halved my sto shares on the market but will keep the rest for a bit longer term :)

[Daytr]

I got back in short today @ $5.16.
Think oil rally was short covering before FOMC.
Overall oil to head back lower I would suggest.
We will need to see a dramatic decrease in US production to make a difference as more Mideast production comes on stream.

[JBmurc]

My average is $5.60 including dividend reinvestment (those dividends they shouldn't have paid) and exchange rate gains, because I ignore all the trends and stuff I don't get in at the bottom. Some people maybe think they can predict that sort of stuff but to me it is only clear when the bottom is reached with the benefit of hindsight.
You did well though looking at some kind of trendy stuff and pretty much called it, though you talked yourself out of it?
Oil may have another leg lower in which case STO will fall but bottom line for the oil market is that the US tight oil has started reducing supply and that's what I was looking for when I started buying in February at $7.35.
With hindsight I should have sold a few at $9, I was a little nervous then but oh well.
Best case they ride it out, worst case they sell some assets I think $7 is a very pessimistic outcome - what they should do in my view is tap the shareholders for a capital raising rather than sell assets at below book value.
I reckon they are waiting for GLNG to be complete and the price of oil to stabilize before doing this. Some guy is getting paid $35,000 a week to work out options which seems a decent hourly rate and a job any moron could do.
Pleased you got a profit from the short term trade, you seem one of the better ones at this game JB Murc.

Right well $5.60av is still very good holding price when you think only 12m ago it was trading at $14...I think your be right and make a good p.a profit in the Medium term 1yr-2yr

Yes Trying to pick the very top or bottom in any trend has a good amount of luck/hindsight yet sometimes that gut feeling you go with over thinking about it too much is the right call ....I've have several good calls over the years... Got it perfect with TRY.asx one of my best where I moved a big position 000,000s out @ $5 (Paid $1.23 currently trades for 29c) .. One of my worse buying OGC.asx for lik only 23c to then selling 50c etc to watch it climb $4

Yes I did talk myself out of STO ...trying to control my greed sometimes stuffs me up.. I seen the $250 for 2hrs hold rather than a bigger picture seconds later GONE..(still I think I would have sold the next day) ... I'm certainly a much better Buyer than Seller as long as I listen to myself and don't take on too much outside Noise ....

My biggest losses have come about from #1-Rose tinted glasses.... Talking with Mgmt,spending huge hours in studying them etc ,talking with other bullish holders ending up getting numb putting the blinkers on when the company has issues or other factor go against them not wanting to take the loss or profit I once had >>> 12yrs 1000's hrs of Investing/trading and I slowly getting better..LOL

[JBmurc]

I personal wouldn't recommend contrarian investing for most guys ...trends are exactly that and most the time it's best to follow rather than fight ..but a trend that's looking near exhausted like I believe we have with the likes of OIL -STO.asx ...is certainly worth taking a contrarian investment esp if you have a longer term outlook ...

A good example of the way not to do it was a friend of mine that decided that it was a great time to be a contrarian investor with Nickel.Iron ore,oil shares like when AGO was crashing and buying in 30c etc ...he stated that they were great companies and use to be many $ higher only years ago..."Yeeeahh I said but that doesn't mean d*ck " ..your going against a pretty strong trend ...why not invest in a trend that going well in the same overall Resources sector like AUD GOLD stocks ?

Another example was Nickel many tip sheet guys and even top analyst were calling for a massive boom ..huge undervalued etc in the price and huge money to be made etc ....I invested into MCR 60c etc for a trade on the hopefully higher Nickel price ..but with LME stocks heading higher and a price that could just not make any really gain I walked for a small profit..... now it trades for 26c and looking flat

Value investing is great for the guys like yourself that have a longer term outlook and some experience and discipline.... but for me I like Short term Interday-interweek-intermonth to max mid term 1yr holding...


---daytr-- looks like you got it right there mate good Short ...how is your CFD trading going ?

[PSE]

You are right that's the problem mainly people think value investing means buying something that has fallen but just because it has fallen doesn't mean it is cheap. You need to understand its long term earning prospects and understand it is cheap relative to this, newspapers aren't coming back.
Cabcharge, Myer, Fortescue, Metcash - these business have all fallen but have poor prospects of recovery in the long term.
That's the same for any method though, most of the people buying and selling stocks should leave it to the professionals or dollar cost average into an index fund.
If you understand the method though you can ignore the technical analysis/trends and understand the fundamental analysis without placing any real faith in predictions which depend on an uncertain future.
I see the future as a grey area of company valuations where a fundamental analyst works out future earnings for the next 10 years and discounts it back to present day. They do a great job but because it is impossible they are often wrong and they are also often wearing those colored glasses I think.

[JBmurc]

If I had been looking to enter the Oil & Gas sector(from memory I just wasn't interested in it at that time) ...with the way I invest/trade currently I might well have brought into STO ,,but as the downward trend hadn't been broken more so looking like sideways trading range

...I certainly would have had a trailing sell order in place

Now I don't have any Stoplosses or trailing sells in place currently but that's because my shares currently are micro cap with very Gappy low volume trading ranges ....I do wish I had put in place a tight trailing sell on STO after my 4.45 Buy the other day ....would have paid for the extra commission ten fold ... still after selling out I did put the funds into LNG and ended up making another $550 for 24hr hold

[Daytr]

Well its better value today. ;-)
Took a nice 10% profit from my short yesterday.

Will be looking to get long at some stage as agree in the long term it should do well especially if they manage to offload some assets to reduce debt.
The PNG/LNG appears to be their lifeline if you ask me.

[JBmurc]

I wasn't really looking at that time either but went through the ASX200 and identified the 2 or three companies that I consider undervalued in an overvalued market. One of them happened to be oil and gas.
Thanks for that though, with hindsight I am not sure I would have done much differently - I don't understand the things you are using but stop losses.
I understand what this is but would never use it, taking losses is not how I roll :cool:
It is interesting that you consider the downward trend broken probably gut feel I agree but I certainly wouldn't put any money on it.


No Not broken.. at Jan Feb right up to recently I would have been looking at STO as Neutral or a HOLD etc as the Downtrend "had not" been broken aka a uptrend hadn't moved through the moving average ..so that's why I think we seen the pretty sideways movement over many months of trading.the fight of the Bulls Vs Bears was pretty even and from memory I do think slight uptrend moved through shorter MA ...but that of course broke down and the downtrend continued ......Now I'm no T/A expert and really don't use it as much in the High risk low vol , micro cap resource sectors I've focused on for many years ...but do like it on these major companies...

Yes taking a loss is never cool ,,but I rather take 10% loss etc than 40%-50% as that can happen pretty quick ...as we seen from STO $14 to $7

[Daytr]

Oil smashed again, all gains given back. Should've held my short in STO! ;-)
Could be an interesting week ahead.
Will the lows be tested?

[macduffy]

STO's thread has gone very quiet!

Meanwhile, production has started at the GLNG plant.

http://www.theage.com.au//breaking-news-business/santos-flags-start-of-qld-lng-production-20150924-43c56.html

[macduffy]

From Share Café.

UBS notes the AFR has reported it has obtained sale documents relating to the asset sale process underway at Santos. The documents outline four separate portfolios of assets and all appear up for sale.

UBS suspects Santos will be ready to announce its preferred course of action in November. It remains unclear as to whether it will proceed with a strategy briefing given the review is underway. UBS retains a Buy rating and $6.10 target.

Sector: Energy.

Target price is $6.10.Current Price is $4.88. Difference: $1.22 - (brackets indicate current price is over target). If STO meets the UBS target it will return approximately 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

[Daytr]

Assets are making a loss aren't worth much.
STO is only worth a lot more if the oil price is a lot higher.
At $6 its effectively valued around A$16Bln due to its debt, so I would suggest at the current poo that is over priced by a couple of bucks. Right now I would suggest its close to fair value, but its not cheap. Just my view.

[macduffy]

According to the AFR indicative bids due 7 October with final bids at the end of October, the various parcels of assets are described.
Of course it is worth much more than $6, UBS are clearly up to stuff all - I bet they had a buy at $14.
You holding macduffy?

Yes, just a small parcel - a contrarian holding!

:cool:

[PSE]

Good on you Macduffy contrarian is the only way forward for the long haul 3-5 years. Daytr the price today is $4.8 and you think it is fair value, I will remind you of it when I sell and at that point it would be great if you can stop contradicting me.

[Daytr]

PSE, why don't you stop getting personal & stick to debating the topic at hand.
Where did I say that oil will stay at $50 forever?
I also never said I don't have a long term view, however I will continually adjust that view as new information comes to hand.
So lock in that statement all you like, as its your statement not mine.
At the current price of oil STO imo is still a little rich.
If you think oil will trade higher in the long term as long as STO manages it debt situation, STO will no doubt be higher.
However if I think oil is going higher, then I will just go long oil rather than a debt ridden company that is at best fair value, not good value at the current poo.
Lets face it PSE you were saying similar things when it was trading between $7-$9.50, now its almost half that, but you don't give people who were right any credit.
At some point I may get long STO, I almost did just above $4 a few weeks ago & obviously in hindsight that would have been a great trade, but if I had I would have been out by now having banked 20-30%.

Anyway PSE as I have always conveyed, I hope it works out for you in the long run.
Play nice. Daytr.

[PSE]

Yes the price has fallen and I said the same things all the way from $7 to $4.5, the fall in shareprice was unpredictable don't act like you called it. You said it may fall and I agreed, it may also have risen (in fact it did didn't it went to $9 and I kept saying the same things - although I was a little nervous I held but should have sold).
We can only tell with hindsight but in the long term the price will follow the earnings and these are predictable.
The loudest posters like Daytr have the least to add is why I have given up on this forum. When you base your idea of value on shareprice and trade 5 times a day you are losing money long term.

[Daytr]

Fallen! Its been crushed!
My call was for $3.50 so I put my hand up its only dropped to $4.05 from over $9 where I called it.
Hey but there is still time... ;-)

[Daytr]

Put my toe in the water today at $4.36.
The story at the current poo isn't great, but i think they have too many options still at their disposal to reduce debt & clearly have some great assets that will be in demand.
I hope they don't sell their PNG asset & I still would rather see them raise a couple of billion in equity.
I actually think they could do that at a premium to the current SP between $4.50-5 as it would give confidence back to the stock & the short covering alone would see it back well over $5.

[Daytr]

Picked some more up today just above $4.
Shorts are now over 10% of issued stock or 100M shares!
That's a lot to cover if we see a spike again.

[JBmurc]

Yes thinking about dipping my toe back in for a swing trade ...3.97 last I looked ...

[Daytr]

Sure there is a risk of that, but it will de-risk the company so if it happens I will just pick up more.
I think asset sales are more likely, but I would also like to see them issue a convertible bond with say a two year redemption to convert or something along those lines. That would be the smart play imo.


What is the risk of a STO capital raising at a big discount - like ORG has been forced to do (34% discount to price)? I wouldnt want to be long STO if that happens. The shorts will probably use the cap raising as an opportunity to cover - so there will be no short squeeze on market.

[JBmurc]

In on the close yesterday $4 ....looking for a bounce today on higher Markets + Oil up .... shorters covering + Bargain buyers

[JBmurc]

well took my profit for the day ..if only it was always this easy to "mine a share"

[Daytr]

Yeah I took a bit of money off the table as well.
Will see if we have a pullback to load up again.
Nice day for commodity stocks OZL up 20%, I took profit on that as well. ;-)

[JBmurc]

Yes going be many more good days ahead with this volatile market ...I've only really tuned my Trading style since start of the year to date has lifted my funds by near on 40% in that timeframe ,,,,CAV the only DOG that's cost me round 10%(but still holding just!!) ....

[Daytr]

Closed out the rest of my position for an ok profit.
Just get the feeling oil may pull back from here.

[Daytr]

Well got that wrong. Oil up 4%! Doh

[Corporate]

Well got that wrong. Oil up 4%! Doh

5.2% at the moment.

[JBmurc]

Another HUGE day up 7.5% currently .......

[mayday]

Hi PSE and JB, thanks for sharing your thoughts. Just halved my sto shares on the market but will keep the rest for a bit longer term :)

My patience has got rewarded, sold the rest of my STO shares today with 15% profit gain

Always DYOR and then MYOD (make your own decision) :t_up:

[macduffy]

A milestone day for STO.

http://www.theage.com.au/business/energy/first-glng-cargo-set-to-leave-gladstone-friday-20151015-gka404.html

[mayday]

Santos rejects indicative acquisition proposal
http://www.reuters.com/article/2015/10/21/us-santos-ltd-m-a-idUSKCN0SF34820151021

what a shame, I sold mine too early :mad ;:

[Daytr]

Yep same here. Interesting to see what happens from here.

[macduffy]

Some interesting thoughts on energy supply - with particular relevance to STO's LNG interests.

http://www.nikkoam.com.au/knowledge-dividend/nikko-am-aus-investment-research/energy-supply-glut-insights-from-the-us?utm_source=Trending+on+Livewire+%22The+Morning+ Wire%22&utm_campaign=e2a90bda32-Trending+on+Livewire&utm_medium=email&utm_term=0_1911ffeed5-e2a90bda32-82636925&mc_cid=e2a90bda32&mc_eid=9f402457b0

[Joshuatree]

$2.5 billion shareholder Cap raise @ $3.85 1 for every 1.7. S/P fri $5.91
$520 mill sale of int in Kipper field to mitsui
$500 million private placement

PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01682597)

[mayday]

Can anyone give me any idea? In the release, it says "under the entitlement offer, eligible shareholders are entitled to subscribe 1 for 1.7 existing shares held as at 7pm on Thursday 12 Oct 2015". What if I bought some last week, am I still entitled to the offer?

[macduffy]

No, the record date is 12 November, which is when it resumes trading. If you bought shares last week you will be on the record as of 12 November, and entitled to participate. You may take up your entitlement or you can sell them on market.

Just to clarify, the company has corrected the original announcement of the record date to 12 November, not 12 October.

http://www.asx.com.au/asxpdf/20151109/pdf/432v2s7vljf2yz.pdf

[mayday]

Just to clarify, the company has corrected the original announcement of the record date to 12 November, not 12 October.

http://www.asx.com.au/asxpdf/20151109/pdf/432v2s7vljf2yz.pdf

I was wondering.....hell company secretary

thanks md

[Joshuatree]

Insto shortfall bookbuild @$4.60, Insto component raised re $1.17 billion re 86% take-up..
Full ins to amount raised re $2.5 billion.

Retail component expected to raise approx $1.35 billion.
Entitlements trading from today deferred.

S/P currently$4.38 low $4.31 can't locate ticker for rights?

[macduffy]

The institutional entitlement offer has been completed and STO has recommenced trading around $4.38.

http://www.asx.com.au/asxpdf/20151112/pdf/432xkzjr9dfk5c.pdf

[macduffy]

Insto shortfall bookbuild @$4.60, Insto component raised re $1.17 billion re 86% take-up..
Full ins to amount raised re $2.5 billion.

Retail component expected to raise approx $1.35 billion.
Entitlements trading from today deferred.

S/P currently$4.38 low $4.31 can't locate ticker for rights?

Ticker is STOR.

Rights have traded 51c - 70c, currently 55c.

[mayday]

Looks sto is oversold now but it may test even lower along with gloomy crude oil price. I'm thinking of re entering. Any thought, guys?

[Joshuatree]

Thanks mac.I don't know how to value it mayday. Ive read oil HAS to stay above $40 for STO to survive but don't know how accurate that is either. MKt is prob pretty efficient with this one atm.

This article below suggests oil can go a lot lower yet

http://www.zerohedge.com/news/2015-11-12/something-very-strange-taking-place-coast-galveston

[Joshuatree]

Closed @ $4.13 was re$3.87 on the 13th. Did you get some mayday. We are taking up the spp @ $3.85 for our trust and are well in the Red atp.A long term play.

[mayday]

Closed @ $4.13 was re$3.87 on the 13th. Did you get some mayday. We are taking up the spp @ $3.85 for our trust and are well in the Red atp.A long term play.

JS, I have traded my rights on STOR. The oil outlook is a bit bearish at the moment. Fed is close to raising interest rates in Dec....the battle is out there between long and short.

http://www.theweek.co.uk/oil-price/60838/oil-price-why-it-could-collapse-to-20-a-barrel
Although I don't believe oil would dip into 20s, the news indicates GS is shorting oil at the moment.

I've been awaiting for a bargain so let shorts do what they must :D
http://www.asx.com.au/data/shortsell.txt
STO SANTOS LIMITED FPO 4,820,473 1,111,319,695 .43

[mayday]

For long-term shareholders (> 24 months)
http://www.fool.com/investing/general/2015/11/22/opec-issues-another-warning-of-a-future-oil-price.aspx

[Joshuatree]

Down another 10% to $3.40 a ten year low(WPL too) and no respite anytime soon. Pretty grim out there for those stuck in Energy and resources land.:(No respite and where is the bottom. Not tempted to catch or throw knives here.

[JBmurc]

Great LOng term buy I see the World will be demanding several million more Barrels of oil by 2020 ...many Oil producers will be better of just turning of the Taps of late ....huge exploration cuts ....

[Joshuatree]

10 year low (at least) $2.95 .Morning star have a valn of $ 6.50 :D

[Daytr]

How much debt do they have left?
STO has been a management disaster.

[Joshuatree]

In the strategic review 9 nov
$6.2 billion debt after the $3.5 bill cap raise.
"Significant liquidity position with $5.5 billion in cash and undrawn facilities
Santos expect current BBB S&P rating will be affirmed"

[Daytr]

Thanks, but of course there are now roughly twice as many shares issued.
They will also be losing significant cash at the current price of oil.
They should of sold their crude production a year ago and raised equity at the same time.
Anyway, they should survive with that sort of liquidity.

[JBmurc]

Daytr long time between posts .hows the CFD trading Going


..Glad to have kept well away from the likes of STO only have interests in..... ASX... GOLD, tech/metal, PGM pricing in AUD/RAND etc

But there will come a day it will be a very smart move to BUY up large in the likes of STO as OIL will trade much higher again in the not too distant future once the Deflation is flushed away from massive DEBT write-offs

[Daytr]

STO has been one of my most profitable trades as I shorted on multiple occasions.
Oil will trade higher no doubt, but we might see further pain yet.
I fully expect to see an energy related debt crisis as bankruptcies in the energy sector explode.

Those without debt & low costs should do ok.

Oil I don't see going back to the lofty levels we have seen in the past due to the increased production capacity that a higher price supports.
Unless of course there is a major supply disruption which is always possible.

[macduffy]

Oil I don't see going back to the lofty levels we have seen in the past due to the increased production capacity that a higher price supports.
Unless of course there is a major supply disruption which is always possible.

Seems to call for a cunning "Short A, Buy B" strategy!

;)

[Daytr]

STO's half year report will be released toward the end of the month.
It will be some sorry reading, even though it will be based on average a much higher oil price.

[Daytr]

FYI, I heard the Saudis are gong to list some of their assets.
You would have thought they would have done this a year ago!

[JBmurc]

FYI, I heard the Saudis are gong to list some of their assets.
You would have thought they would have done this a year ago!

Thats one big IPO ....Saudis looking to cash in on some of their assets to shore up balance sheets ?

[Daytr]

Oil getting smashed again. A year ago I called for $32, seems I was optimistic.
I'm now thinking $18 - 22 as a low.
Until we see bankruptcies in the energy sector this ain't bottoming.

[JBmurc]

Iran to bring on stream 500mbbl+ ....next week or so ....this will add to the 1mill+ excess capacity certainly mid 20's IMHO

Now How the Hell can Shale oil and tar sands (need $50-$70bbl to break even) still be operating let alone many other non M.E producers
there is one **** storm coming that's for sure will make the GFC look like a sunday picnic

[Corporate]

Iran to bring on stream 500mbbl+ ....next week or so ....this will add to the 1mill+ excess capacity certainly mid 20's IMHO

Now How the Hell can Shale oil and tar sands (need $50-$70bbl to break even) still be operating let alone many other non M.E producers
there is one **** storm coming that's for sure will make the GFC look like a sunday picnic

Surely they are on average all operating at a cash loss. Although I saw a report yesterday suggesting that in the short-term they might be just breakeven (excluding capex).

[Daytr]

I don't think you can exclude all capex as the nature of their business is they have to keep developing the gas field to extract it. I'm referring to GLNG.
I think they need around USD45/bbl to break even and that's not repaying any debt.
It maybe a bit lower than that since they reduced their debt burden, but I would suggest its close to that sort of number.
We will know in a few weeks when they release their half year report.


Surely they are on average all operating at a cash loss. Although I saw a report yesterday suggesting that in the short-term they might be just breakeven (excluding capex).

[h2so4]

I don't think you can exclude all capex as the nature of their business is they have to keep developing the gas field to expect it. I'm referring to GLNG.
I think they need around USD45/bbl to break even and that's not repaying any debt.
It maybe a bit lower than that since they reduced their debt burden, but I would suggest its close to that sort of number.
We will know in a few weeks when they release their half year report.

It's a disaster in the making if oil continues to freefall.

[JBmurc]

It's a disaster in the making if oil continues to freefall.

Even if oil doesn't continue to fall but stays under $40bbl USD longer term ,,,,we will see some big names fall ..and billions of investment funds wiped out ...if not trillions

[JBmurc]

STO down hard again on open $2.67!! sub $2 ?? Tax loss selling May/June could well see a bottom ..

[stoploss]

http://www.smh.com.au/business/how-to-lose-425m-in-three-months-bet-on-santos-20160127-gmev9l.html

[Joshuatree]

Santos in play?. Homy capital now have 80 mill shares re 3.2% of STO.half were bought for$3.98 current price. S/p lept today to $3.85 currently.

[JBmurc]

Back into STO @$3.02 for a swing trade after take a sizable profit from my MGX position

[JBmurc]

WTI up 2% overnight ....STO might well get a good kick on today .....

[Joshuatree]

Lowball takeover offer @$4.55 has spiced the s/p up 12% atp to $4.90.

[Schrodinger]

Yes been following closely for 4 months. I expect the price to head to $6 due to an improved offer and potential bid competition. The Aramco float is also a big bonus to price.

[tobo]

in a channel for 6 months now. Climb is so steep for such a big company that I keep expecting it to flatten out. And, as you say, Schrodinger, there is still bidding in the wind.
(Chart looks great if you don't look a few years back.)
9395

Discl: Holding since early 2017

[Schrodinger]

Rising like this due mostly to the offer and oil price going crazy (Aramco linked IMO).

https://www.thenational.ae/business/markets/tadawul-taking-all-measures-for-successful-aramco-listing-1.694411



https://steelguru.com/gas-oil/saudi-arabia-takes-step-closer-to-giant-aramco-ipo/499392 (https://steelguru.com/gas-oil/saudi-arabia-takes-step-closer-to-giant-aramco-ipo/499392)

Saudi Arabia takes step closer to giant Aramco IPO

Gasoil News - Published on Tue, 09 Jan 2018

https://steelguru.com/uploads/news/aramco_36405.jpg (https://steelguru.com/gas-oil/saudi-arabia-takes-step-closer-to-giant-aramco-ipo/499392#aramco_36405.jpg)Image Source: moneycontrol.comSaudi Arabia announced that Aramco had been granted new status allowing individuals to hold shares in the oil giant, which it aims to float on the stock market this year. A bulletin published in the kingdom's official gazette said the cabinet had approved giving joint-stock status to Aramco effective January 1, 2018.

The move comes as the kingdom prepares to sell under five per cent of state-owned Aramco, the crown jewel of its economy, in what is expected to be the world's largest ever initial public offering.

The flotation forms the cornerstone of a reform drive led by Crown Prince Mohammed bin Salman to wean the economy off its reliance on oil.

Managed by a board of directors, rather than directly by government, joint-stock companies allow individuals to hold stock and thus share in both the debt and profit of the company.

The bulletin said that a provisional board of directors - Aramco's first ever - will be appointed based on the recommendation of the kingdom's oil minister. It will be followed at a later date by "the formation of a board of directors under the provisions of the founding statute".

According to the gazette, the state will retain direct ownership of the majority of Aramco shares.

The Aramco IPO could generate some USD 100 billion in much-needed revenue after the country lost hundreds of billions of dollars since crude prices slumped in mid-2014, leading to huge budget deficits.

Mr Amin Nasser CEO of Aramco said that the IPO is scheduled for the second half of 2018.Source : AFP (http://gulfnews.com/business/sectors/markets/saudi-arabia-takes-step-closer-to-giant-aramco-ipo-1.2152263)










































Lets see whats in the best interests for this float... first guess is a preferred high oil price into late 2018.

[wizAlvin]

Will STO be in the 2018 ASX competition? closing days.

[Joshuatree]

Santos rejects Harbour proposal and terminates discussions (https://hotcopper.com.au/threads/4205831/)

$5.88 down 8.7% today and energy/oil rising, $100 barrels on the cards?

[Schrodinger]

No biggie they are expecting a large profit and reinstating divs. Should head to $7 and beyond. Harbour should up the bid.

[Joshuatree]

Bang on Schrodinger from $4 to $7.25 today, in one year.Great recovery.Pretty excited about the dorado discovery.

Santos targets production of more than 100 mmboe by 202526 / Sep / 2018 (https://www.santos.com/media-centre/announcements/santos-targets-production-of-more-than-100-mmboe-by-2025/)

Santos announces acquisition of Quadrant Energy22 / Aug / 2018 (https://www.santos.com/media-centre/announcements/santos-announces-acquisition-of-quadrant-energy/)

Santos doubles half-year underlying profit to $217 million and reinstates dividends to shareholders23 / Aug / 2018 (https://www.santos.com/media-centre/announcements/santos-doubles-half-year-underlying-profit-to-217-million-and-reinstates-dividends-to-shareholders/)

PSE has done well, have been reading his posts on H/C but think he's taken bat and ball and moved on now from STO and H/C..