Santos Shares Fueled by Robust Financials and New Acquisition

Santos is an oil and gas producer in the Asian pacific region, concerned with the exploration, development, production and sales of natural gas. Major products of the natural gas company are Liquid Petroleum gas, methane, ethane, coal seam gas, condensate and oil, shale gas and liquefied natural gas.

Five major assets of the company include: Cooper Basin, Papua New Guinea, Gladstone LNG, Western Australia and Northern Australia. Santos runs its operations in two major geographies – Asia and Australia. Recent surge in the share price came riding on string of positive news and half year result.


Earlier, STO turned down a takeover bid amounting to $10.8 billion from Harbour Energy that did not resonate well with the Investors. However, the stakeholders did exhibit confidence after the company announced acquisition of Quadrant Energy for more than $2 billion. Talking about the synergies, the acquisition would provide Santos with greater ownership of the target. The high-quality portfolio would boost the offshore operating capacity of Santos. It would unlock the value for the shareholders in the long term and push the company to take the top spot in the domestic natural gas supplier space.

Santos earns majority of its revenue from the oil linked space and addition of Quadrant to the portfolio wound ensure the consistent cash flows as well as higher revenue for the company going ahead.

[optin-monster-shortcode id="wxhmli4jjedneglg1trq"]

The acquisition of Quadrant is in line with the Santos long term vision and to expand their infrastructure. The acquisition would help the company in cranking up its annual production by 32% whereas the reserves would be up by 26%.

On the financials performance front, the company has reported underlying profit of $217 million which is almost double of the previous year. As opposed to the last year, the company has also revived the dividends at 3.5 cents per share. The performance of the Santos can be marked with remarkable sighting the losses they suffered in the wake of earthquake. Santos is on the path of achieving its debt reduction target a year ahead of the schedule.

Source: Company Report

Cooper basin has witnessed revival in the production with oil production reported highest in four years whereas costs per barrel came down by 13%. Santos managed to complete the Scotia CF1 project in Queensland earlier than the year in which it was scheduled for. Further, Roma East development is in line with its schedule.

On the liquidity front, Santos is performing good with $3.5 billion in cash and undrawn bilateral facilities. Further, the company is expecting proceeds from the sale of Asian assets by the second half of 2018 which justifies the dividend.

Stock Price Update

The stock has gapped up this month clocking the level of $7, the same offered by Harbour during the takeover bid. After gap down in the month of May, the stock has been rising gradually, making higher highs and higher lows and respecting the upward trendline as support. After forming a HAMMER pattern on the chart last week, the stock confirmed that the pullback is just around the corner.


Going ahead, as the price cools down, level of 6.68 followed by 6.45 should be watched out for. Resistance is pegged around 7 followed by 7.12

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.



The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and