STO - Santos Limited

[RichKid]

STO has recovered strongly after some rough passages over the past, well above it's cyclical highs at $7. Gapped down heavily today on volume, looks like it is going lower to 8.50 (or 8) support. A lot of activity planned this year and the initial Jeruk assessments due by mid year too.

Any holders? Any views? I think STO has gotten ahead of itself, good drilling news will keep it steady but it may fall closer to recent trend in short term.

Longterm chart is monthly, short term is daily.

[RichKid]

Saw in the FinReview that Santos has announced a downgrade to oil reserves in its Mutineer and Exeter fields off WA, expecting recoverable reserves of 61 million barrels rather than 101 million (a big difference). Apparently STO had been relying on those reserves to drive growth, probably explains the dramatic fall in the sp. BUT, apparently they'll bring forward production so that is supposed to help balance out the bad news.

Let's see where the sp finds support.

[77TRADER77]

With 2006 Investment per last week ASX Announcement, and at its current price very nicely placed, hey all other Oil companies doubled in value in last 12 months, (compared to big brother Woodside who grabs glory). I'm thinking this stock could 'EXPLODE' in our faces..Hey Ive got none and Ive just talked myself into buying them. What attracts me is that secondary Drilling area (Woodside has primary) in Timor Sea.
The astrological signs tell me (and my gambler/trader instinct), just kidding, tell me this share may be how I can purchase my ticket to the moon on Richard Branson's Rocket Express!
Hell, Im having a go YO HO HO!
Geez after reading this youll sell yours cheap to me cause yu think Im crakd!
Good Luck Traders.

[clowboy]

Anyone know why STO is still in pre-open at 10.30AM?

I cant find any announcement's requesting it or the likes?


Thanx

[powerkoala]

Mulberry announcement makes STO jumps like crazy.
I suppose to buy went 11.40. Well another :banghead:

[clowboy]

Can someone take a look at a recent chart of STO for me and tell me if it is a double bottom (is there such a thing?).

Was looking at chart tonite and noticed a W, am I right in taking that as a double bottom and if so am I right in thinking that would be a bullish sign?

Thanx

[NettAssets]

Don't know where all Santos' little holders are coming from - the last 10 trades turned over a total of 12000 shares and dropped the price a couple of cents
John

[pacer]

Santos may be a good short at the moment with all that mud flowing over all those houses and polluting that river in Indonesia....surprised it's still holding its ground but a small head and shoulders makes it a bit of an attractive short....only the price of oil rising will give it any stability.....pretty sure it was STO that caused all this anyway.

Just convinced myself that it's a short....gone 1500 cfd's for a look.

[pacer]

Fell 1.88% today......happy with that considering they are announcing oil plays they have found......they wiil try to keep the price from falling too much but it is still in the poo.....and excellent short for a few more days yet me thinks...the Indo mud is unstoppable......feel sorry for the residents and the environment...but it'll make me a Quid or two.....that's life!

[arlee123]

can anyone give some opinions on Santos...(STO)

cheers

[Ken]

STO is on track to achieve its FY06 production guidance of 60 to 61mmboe. Despite this, we had assumed a higher relative contribution from liquids in 3Q06. This results in a lower than expected average achieved price overall and our FY06 earnings forecast declines 5% to 134.8cps. Our FY07 forecast is little changed, nor our $12.65ps valuation. Long term assumptions remain US$60/bbl oil, A$/US$ exchange rate of 0.76 and a 10% discount rate. Substituting US$50/bbl oil decreases our valuation 23% to $9.95.

Our Buy recommendation is retained and reflects an expectation of a long run annual return of 13%, above the 10% minimum required for a positive bias. Key risks remain commodity prices, cost pressures and comparatively short reserve life. The previously discussed Banjar Panji mud flow in Indonesia may negatively impact to an extent. Potential is for aggressive exploration strategies, in particular LNG targets in the Timor/Bonaparte region, to deliver a much needed cornerstone replacement asset for the mature Cooper Basin. Until they do STO will remain the poor cousin of Woodside.

[canaussieuck]

Well i'd like to have my 2 RMB worth here. From a technical point of view i think the weekly chart shows it could move into a period of consolidation. A break of the old support could be a bullish sign to moves higher.

Anyone else?

[Realist]

I know Pacer is shorting Santos. and has made a bit doing this.

My tip : wait... no hurry to get in at all...

[arlee123]

I know Pacer is shorting Santos. and has made a bit doing this.

My tip : wait... no hurry to get in at all...

yup..cheers..
but at what price do you think will make STO an attractive investment ?

simply an opinion

[pacer]

Just thought I'd let you all know I bailed 2 days later, for a small profit (2 cases of bourbon lol), after reading further that the dammage will mostly be covered by insurance, but still puts a bit of a hold up on that project and the resources used in the cleanup/repair job, (if they can repair it, personaly I'm putting money down on it continuing to flow for years...a write off), could have been used elsewhere, and Santos (and partners) will have to foot the bill till insurers pay out (If they are found to be at fault)...liability will be contested by the insurer I suppose.

Was a small play and I reverse my position or bail resonably regularly depending on several factors....this time it was a slow response in SP and to jump on KZL and ZFX....and we all know why I did that!!!!.....If anything this looks like a riser to me but is too unpredictable at the moment.....and I'm more interested in Zinc at the moment.

Sorry I took so long to look back on this for comment....good luck all.

[pacer]

STO has got more problems and is down 1,5% on news of an incident that killed some workers on a platform and has shut it down....I've gone short 1000 for a look again....they just don't seem to be able to put a foot right lately.

If it makes the ABC news I react...and that's twice within 2 months it's stuffed up....and oil is down from it's high too....

[pacer]

STO down 4% today....easy money....hehe.....

Now to decide whether to get out with the loot today or wait for more gains on the short side.

[chops_a_must]

Whoops. I was going to short this, and then slept in, haha.

How much have you made off it so far Pacer?

[pacer]

STO is rooted!.....it's just a shame I make money on the backs of others misfortunes.......RIP the guys that lost their lives here......:(

[Caliente]

hi holders of STO. Recieved a ML report this morning, thought I'd share this snippet.

Jeruk uncommercial at 50mmbbl

Santos has announced that the Jeruk oil discovery (STO 40.5%) is likely to be
less than 50mmbbl so with the commercial threshold at around 70mmbbl, we
believe that the field will now not progress to development. Previous Santos
guidance has been that the field contained “less than 170mmbbl”.

Given the lack of near-term catalysts, we are lowering our Santos
recommendation to Neutral. With Jeruk no longer a growth contributor we view
the Cooper oil program and appraisal of gas resources to expand Darwin LNG as
key. Whilst we are satisfied that the financial implications of the Banjar Panji
mudflow and subsequent pipeline incident are limited, we believe negative
sentiment may overhang the stock in the near term.
Lastly, with Santos being the best performing Australian E&P stock over the prior
six months (in a falling oil price environment) it may mark time as investors reweight
into the laggards.
We do not believe the stock is a Sell at this stage because of its near term
attractive multiples compared to its peers, Cooper Oil optimisation upside and
exploration activity offshore Northern Australia.

[Dutchy3]

Potential juncture for this one. MD remained unfavourable all day. Over all the ASX of 70 or so points .... bad news everywhere ... and yet does not make a new low?

A short term CALL play could be on the cards ... will we get a signal?

[MalteseBull]

wtf is with sto atm?

[Gundini]

wtf is with sto atm?

I thought it has held up well in the last couple of days considering, but maybe it's something to do with the mud pouring out of their drill hole in Indonesia, not sure, but good company standing up in these markets.

[Knobby22]

I've never liked Santos much.
Look at how they have performed long term next to Woodside.
They have pretty limited reserves, spent a fortune trying to find more and failed. Better oilers out there. Look at AMU for instance.

[Gundini]

wtf is with sto atm?


Banjar Panji incident media reports
02 Jan 2007


Media enquiries Investor enquiries
Christian Bennett Andrew Seaton
+61 8 8218 5155 / +61 (0) 400 686 106 +61 8 8218 5157 / +61 (0) 410 431 004
christian.bennett@santos.com andrew.seaton@santos.com

Santos notes recent media reports in relation to statements attributed to the Indonesian President, Susilo Bambang Yudhoyono, regarding costs claimed to be associated with the Banjar Panji incident.

It has been reported that “PT Energi Mega Persada’s unit Lapindo Brantas Inc [the “Operator”] must pay 3.8 trillion rupiah (US$421 million) to cover repairs and losses after gas exploration drilling triggered a mud flow disaster.”

Despite continued requests, Santos has not received any official communication in this regard from the Operator. Santos is continuing to attempt to clarify the status of any discussions between the Government of Indonesia and the Operator.

Further announcements in relation to Santos’ share of potential costs relating to the Banjar Panji-1 incident will be made as definitive information becomes available and has been evaluated.

Santos Brantas Pty Ltd has an 18% non-operating interest in the Brantas PSC which contains the Banjar Panji-1 well, located near Surabaya on the Indonesian island of Java. The PSC is operated by Lapindo Brantas Inc, with a 50% interest. The remaining interest is held by PT Medco E&P Brantas, which has a 32% interest.

[imaginator]

whats the outlook for Sto?
It shot up to 10.08 today.
DO u think its going up more?

[GeneralSantos]

whats the outlook for Sto?
It shot up to 10.08 today.
DO u think its going up more?

STO will henceforth be known as "Mr Magoo" until such time as Flint extracts the digit

[bigdog]

Very good FnArena article on the Santos Buyback titled "Santos Buyback Attractive?

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=8D58E7BF-17A4-1130-F5D7300EDD4BA0B3

[Kruegs]

Hi there,

I have been following Santos for a little while, noting it has surged in price considerably in the last couple of months. Does anyone else share the opinion that it is due for a pullback in the near term?
I am assuming its price has increased on speculation of it benefiting from more flexibility with the removal of the 15% cap, and a solid oil price recently. However, the PE has also ramped up considerably. I am thinking with not much news of significantly increased earnings or new assets, the speculation value (and removal of some uncertainty in relation to the Indon Mud Volcano) may be fully factored in.
Any thoughts?

Regards.
Mark

[Kruegs]

G'Day,

Santos seemed to drop into a downtrend since the news of the Cap release, and release of some below-expectation drilling results.

Being new to charting, I noticed some interesting patterns on this chart and am after some advice. The Advance in price seems to be followed by a very consistent downtrend retracement, totalling around 50%. As it has followed a 50% retracement, and I can not see any major change in the fundamentals, is it due to continue an advance again? There does seem to be some support the last few days at around $13.15. Are there any other indicators I should be looking at to get a feeling of whether it is ready for a turnaround, or if the downtrend will continue?

Also note the 'Double Top' at the peak, before the downtrend commenced. Any comments on what this would normally tell us?

Cheers,
Kruegs

[Captain G]

Hi, can anyone tell me why Santos is holding up so well?? I have been watching it for weeks, and it seems to be doing OK compared to the rest of the market and most oil stocks. Any views ?? I've looked at the announcement and I can't seem to see anything of great significance.

[nitpra]

This is because of the company's growing LNG footprint, open register and strong leverage to rising East Coast gas prices.

[vishalt]

Profit fell but more reserves and good prospects?

SANTOS a good buy I reckon.

What do you guys reckon?

[Smurf1976]

East coast gas is seriously undervalued both by international standards and compared to other fuels (notably coal). Incredibly, gas is actually cheaper than coal in some situations right now - that's like saying gold is cheaper than lead.

I won't last simply because if it did, gas demand will go through the roof thus ensuring that the situation isn't sustainable. So either global gas and coal prices crash or east coast gas prices go up. The latter is far more likely IMO.

We're talking big jumps in price by the way, not small 10%, 20% etc rises.

So you could go long gas producers with access to the east coast market or go short anyone with gas as a major business cost who is unhedged, baseload power generation being the standout industry in that sense.

Be warned though that this will take years to play out not weeks or months. STO is pretty well placed to benefit from all of this IMO. :2twocents

[Dukey]

Anyone know whats happening with STO today... 9 'becoming a substantial holder' notices released last evening!!!
don't usually follow them much so I have no idea yet, downloading now...
-dukey

[Dukey]

Well theres a hell of a lot of legalese stuff to get through - and seeing I'm not holding I wont bother - the crux seems to be Deutsche Bank (group) taking a 5.5% stake via a multitude of on market trades since Feb 25.
This is something like a >600$mill investment - so obviously they expect big things from santos....should create some interest!!!!!!!!!

- dukey

[Dukey]

It would seem that this buying has been the main driver of the SP rises since late Feb - from around $12-13 to what we see now - $> 21.
will be interesting to see how she travels when they stop buying!!

[CAB SAV]

Hi Dukey, Buy some, heaps more upside in this one. Positioning itself for big growth for decades with oil & csm. if it doesn't get bought out. It's doing a hell of a lot better than a lot of oil penny dreadfulls which arn't rising with higher oil prices,eg CUE & co.

[YOUNG_TRADER]

A very interesting presentation by Santos today on their CSG,

It looks like their Gunnedah area may contain 40TCF of Gas which is double what their Qld acerage may contain (note though they did sell 40% recently to PETRONAS for $2.5Billion +)

Interestingly their Gunnedah acerage abuts ESG's PEL 238 and other tennements which makes ESG look strategically interesting (see page 13 of the presentation)

Overall highlights the value in the CSG sector

[Dukey]

Agree totally YT.
STO could be a big winner in NSW - will be watching for further sp corrections.
>> There is so much going on in CSG sector at the mo. - it's almost impossible to keep your eye on the ball - cause there are about 20 balls to watch!!

#BUL discounted due to ANZ/Chimaera issue.
#RPM/QGC/BOW t/over
#Early stagers like PES, BOW, BUL coming on
#LNG plants galore (4 planned for Gladstone alone!) - gotta be some partnerships to come there..
#NSW dvelopments - STO, ESG, AJL looking very good for the future.
#LNC/SXP and other UCG developments.


... very exiting for the future ... but hard to keep abreast of everything!
-d

[YOUNG_TRADER]

Hey Dukey,

Yeah there is so much going on its just crazy,

I can't believe ICN, I was looking at them, back in Jan they announced a 1TCF Prospective resource of CSG in there permit,

Key word was prospective, with 300m shares at 8c they were capped at $24m, since then after letting Santos take up a placement they moved as high as 40c = $120m Mkt Cap

Now they have settled back to around 25c = $75m Mkt Cap

I wonder what STO's intentions are there given its in the Surat Basin

[Dukey]

That STO slide says it all doesn't it - HUGE acreages.

I did have abit of a look at ICN last yr but figured they might be on inferior acreage on the edge of Walloons - seems they might be OK afterall - though I think I remember the seams were pretty thin.... but then so are BUL's so far.

My head is spinning trying to keep up!
so many companies... so few $$$
But I think AJL might be on the cards next for me though...

Still STO should be great long termer....
- As for their interest in ICN's area - I'm not sure If STO moves as fast as the mid-sized CSGers. Kind of like Telstra V Vodaphone. STO is a very big Co and possibly not so desperate to make things happen fast... but if they need that gas for their LNG plant then that could push things along.

[YOUNG_TRADER]

Hey Dukey,

Caught in the CSG whirl wind hey? he he he, here's some more for ya


Santos/Petronas deal going ahead

Gladstone LNG partnership transaction with PETRONAS receives regulatory approvals Santos today confirmed the Gladstone LNG (GLNGTM) transaction announced on 29 May 2008, whereby Santos selected PETRONAS as its 40% partner in the development, operation and marketing of the GLNGTM project, has become unconditional and will therefore complete shortly.
All regulatory conditions have been satisfied, including confirmation from the Foreign Investment Review Board that it has no objection to the proposed investment by PETRONAS.

On completion, PETRONAS will pay Santos US$2.008 billion for its 40% interest in the project. A further payment of US$500 million will be made by PETRONAS upon reaching a Final Investment Decision for a second LNG train of 3mtpa capacity.

[Dukey]

Hey Dukey,

Caught in the CSG whirl wind hey? he he he, here's some more for ya


Santos/Petronas deal going ahead

Gladstone LNG partnership transaction with PETRONAS receives regulatory approvals Santos today confirmed the Gladstone LNG (GLNGTM) transaction announced on 29 May 2008, whereby Santos selected PETRONAS as its 40% partner in the development, operation and marketing of the GLNGTM project, has become unconditional and will therefore complete shortly.
All regulatory conditions have been satisfied, including confirmation from the Foreign Investment Review Board that it has no objection to the proposed investment by PETRONAS.

On completion, PETRONAS will pay Santos US$2.008 billion for its 40% interest in the project. A further payment of US$500 million will be made by PETRONAS upon reaching a Final Investment Decision for a second LNG train of 3mtpa capacity.

Yup - difinitely - happily i've been in this CSG whirlwind for a couple of years now since QGC was a babe in arms! -and it just keeps getting stronger!

Looks like STO should be set for a big sustained run like so many others..

[YOUNG_TRADER]

Hey Dukey,

Caught in the CSG whirl wind hey? he he he, here's some more for ya


Santos/Petronas deal going ahead

Gladstone LNG partnership transaction with PETRONAS receives regulatory approvals Santos today confirmed the Gladstone LNG (GLNGTM) transaction announced on 29 May 2008, whereby Santos selected PETRONAS as its 40% partner in the development, operation and marketing of the GLNGTM project, has become unconditional and will therefore complete shortly.
All regulatory conditions have been satisfied, including confirmation from the Foreign Investment Review Board that it has no objection to the proposed investment by PETRONAS.

On completion, PETRONAS will pay Santos US$2.008 billion for its 40% interest in the project. A further payment of US$500 million will be made by PETRONAS upon reaching a Final Investment Decision for a second LNG train of 3mtpa capacity.

Santos has around 600m shares on issue, using an avg share price of say $20 (makes it easy too) the Mkt Cap is $12 Billion So really this deal represents about 1/6th of STO's Mkt Cap which makes it quite significant really,

Never bothered to think about it in that way, always just thought of Santos as an Oiler, perhaps their future expansion potential may lie with CSG?

[michael_selway]

Santos has around 600m shares on issue, using an avg share price of say $20 (makes it easy too) the Mkt Cap is $12 Billion So really this deal represents about 1/6th of STO's Mkt Cap which makes it quite significant really,

Never bothered to think about it in that way, always just thought of Santos as an Oiler, perhaps their future expansion potential may lie with CSG?

Hm yeah STO isnt too bad

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 75.8 107.4 112.1 96.8
DPS 40.0 40.0 40.0 40.0

thx

MS

[oldblue]

Hm yeah STO isnt too bad

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 75.8 107.4 112.1 96.8
DPS 40.0 40.0 40.0 40.0

thx

MS

Hi michael

Just to clarify, are your earnings and dividends forecasts your own work? Can I ask what are your sources?

Cheers

:)

[YOUNG_TRADER]

CSG article mainly on Shell, but mentions Santos and the Petronas deal


http://www.theaustralian.news.com.au/story/0,25197,24041984-5005200,00.html

"FOREIGN investors appetite for investments in coal seam gas and Australian companies with exposure to the new energy product shows no signs of slowing.

Royal Dutch Shell's global head of power and gas, Linda Cook yesterday said the super major was still looking for new CSG openings in Australia to add to its recently added stake in Arrow Energy.

"We've had that (CSG) on our radar for some years," Ms Cook said during a visit to Australia.

"Our interest remains high in various types of new gas opportunities including tight gas as well as coal seam gas in a number of countries around the world."

[CAB SAV]

Lost count of the number of times someone has had sold 2 shares today, done a real good job of keeping the price down.

[cartel31]

This stock IMO is now on the start of an uptrend. The shorters have kept it down. They will have to buy back some time, and so will the longers. It will gradual increase im expecting over the next two months IMO.

I'm pretty sure they haven't had their annual report announced yet. It should be pretty good withe oil pricing so high lately. I just go buy the technical side.

Should close higher tm.

[cartel31]

Done well today STO is going to provide its report tommorow so it should follow OSH, it's up 9% at the moment after yesterday when it announed its full year report. IMO it should be up at least 3 % tommorow. I jumped in yesterday and will be out tommorow if all goes to plan.

Every please do your own research and do not in anyway take what I say serious at all! I am a newbie!

[UPKA]

Done well today STO is going to provide its report tommorow so it should follow OSH, it's up 9% at the moment after yesterday when it announed its full year report. IMO it should be up at least 3 % tommorow. I jumped in yesterday and will be out tommorow if all goes to plan.

Every please do your own research and do not in anyway take what I say serious at all! I am a newbie!

u might want to explain where u pulled the 3% from... hopefully its not something u dreamed up last night.;)

[CAB SAV]

Done well today STO is going to provide its report tommorow so it should follow OSH, it's up 9% at the moment after yesterday when it announed its full year report. IMO it should be up at least 3 % tommorow. I jumped in yesterday and will be out tommorow if all goes to plan.

Every please do your own research and do not in anyway take what I say serious at all! I am a newbie!

Good call, I sold nearly half my holdings @ $18.85 and bought in again @ $18.08. Crayfish for tea tonight.
Positive reports get rewarded in this climate.

[cartel31]

u might want to explain where u pulled the 3% from... hopefully its not something u dreamed up last night.;)

LOL What dream? They were goin to announce their accounts today, I said at least 3% I jumped out when it was at 9%.

[dan-o]

I couldnt find an existnig thread on this which surprised me so apologies if I missed it.

Santos has been punished last week, worse than Origin, and its ownership cap comes off soon. Does anyone know of any reasons why they were so heavily punished last week, apart from the obvious??

[oldblue]

Hi dan.

As you note on the QGC thread, almost everything got trashed last week.
Add in the continuing slide in the PoO and the liability hanging over STO from the Indonesian mudflow business and I'm not surprised that the SP continues to be under pressure.

Disc: Not holding STO at present.

[dan-o]

This keeps getting smashed. Is it because of the price of oil?
I put in an order at a price i thought was too low to be reached any time soon and now it has been filled and the shares continue to slide... Any reason why its going worse than the market at large??

[oldblue]

This keeps getting smashed. Is it because of the price of oil?
I put in an order at a price i thought was too low to be reached any time soon and now it has been filled and the shares continue to slide... Any reason why its going worse than the market at large??

Certainly, it's about the PoO.
Everything on my O&G watchlist is down.

PPP -2.6%
NWE -5.9%
OSH -3.1%
STO -4.3%

I don't think it's anything personal against STO - they're all in a downtrend so I'm not buying!

;)

[So_Cynical]

This keeps getting smashed. Is it because of the price of oil?
I put in an order at a price i thought was too low to be reached any time soon and now it has been filled and the shares continue to slide... Any reason why its going worse than the market at large??

Its like anything negative or even the lack of positive news...seems to drive
the SP down, and that's every stock...not just Santos.

Gold falling with Oil.

[rob brewster]

This keeps getting smashed. Is it because of the price of oil?
I put in an order at a price i thought was too low to be reached any time soon and now it has been filled and the shares continue to slide... Any reason why its going worse than the market at large??

could have something to do with that bloody great mudflow they have going in java . there are estimates of up to $829 million for the clean up & Santos have provisioned for about $90 million so maybe that is whats spooking the market

[kingbrown]

thinking on jumping into sto ? ;)

would like too hear from anyone who thinks she's good value at this price ?
Or is there more down side ?

this company has some great potential
hearing many QGC sellers are jumping into this

[agro]

just like to make everyone aware that Santo's cap gets taken off on the 29th .. leaving it open to takeovers from Petronas

good luck :)

[Ferret]

just like to make everyone aware that Santo's cap gets taken off on the 29th .. leaving it open to takeovers from Petronas

good luck :)

Any other time I would say this was worth a punt. But at the moment .......

I'll probably be kicking myself in a few weeks time.

[TheAbyss]

just like to make everyone aware that Santo's cap gets taken off on the 29th .. leaving it open to takeovers from Petronas

good luck :)


Looks like the first bid is being prepared if the press can be believed (which you can't but there is a lot of smoke around and volumes are up).

Good call Agro. If it wasnt for price of oil i would have bought a lot more with my QGC money. Anyway these times it pays to safeguard your best asset (cash) so happy that i have some STO and watching with interest.

[jackson8]

Looks like the first bid is being prepared if the press can be believed (which you can't but there is a lot of smoke around and volumes are up).

Good call Agro. If it wasnt for price of oil i would have bought a lot more with my QGC money. Anyway these times it pays to safeguard your best asset (cash) so happy that i have some STO and watching with interest.

Any fundamentalists who may have a view on what a reasonable price would be if sto were to have a takeover bid placed.
With price of oil , recession and delay of projects this must be a hard one to answer.

[TheAbyss]

Any take over offer must come at a premium to induce share holders to sell. Anywhere from 40%-75% if you use the last few take over bids.

STO has a market cap of approx $7b so $10.8b-$12.5b is my estimate. That equates to around $18-$20 per share.

That is if a bid gets off the ground of course. The CSG assets may get sold off in a bid to keep the current ownership in place also but lets wait and see as we are less than a month into the ownership restrictions being lifted so thre will be a few cashed up oil companies taking a look under the hood yet.

[jackson8]

Any take over offer must come at a premium to induce share holders to sell. Anywhere from 40%-75% if you use the last few take over bids.

STO has a market cap of approx $7b so $10.8b-$12.5b is my estimate. That equates to around $18-$20 per share.

That is if a bid gets off the ground of course. The CSG assets may get sold off in a bid to keep the current ownership in place also but lets wait and see as we are less than a month into the ownership restrictions being lifted so thre will be a few cashed up oil companies taking a look under the hood yet.

the full article from china news


China National Petroleum Corp, the largest oil producer on the mainland, is considering pairing up with a foreign oil company to make a bid for Australian oil and gas major Santos, market sources said.
"They've looked at a couple of parties but haven't put out any feelers. It would probably be a European firm that doesn't have a huge presence in Australia already," said one source. "There's really only a handful of buyers that could pull that deal off now."
Energy companies' share prices have taken a hammering as oil prices plummeted from historic highs hit earlier this year.
Apart from CNPC (SEHK: 0135), potential bidders could include Chevron, BP, Eni and Total, industry observers said. CNPC declined to comment
"Eni doesn't have a presence, and that would make them more open to a deal, but they've already spent a lot on acquisitions so [CNPC] would have to offer them pretty good terms," said a London-based oil and gas analyst.
"The corporate culture and the way they operate are so different, there would be major obstacles to overcome before they could do a deal. Even Eni and BP would have issues working together."
While CNPC would be seeking a partner to mitigate political opposition, the benefit to a partner, which could very likely make a bid on its own, was nil, the analyst added. "Would they hope to get deals in China? China doesn't have any oil."
Santos, the third-largest oil and gas company in Australia, was freed on November 29 from a 15 per cent limit on individual stakes imposed on the company by South Australia that had been aimed at blocking takeover attempts and keeping energy supplies in the state. The firm had long complained that the cap kept its share price artificially low and prevented it from competing with regional players.
Santos hired Deutsche Bank and Australia's Caliburn Partnership to run the company's defence of expected takeover attempts by multinational oil and gas firms, sources said.
"The Australians aren't going to let go of that without a big fight, because it's one of their flagship companies," said Larry Grace, an energy analyst at Kim Eng Securities.
Santos has a market capitalisation of US$4.52 billion. Its shares have fallen 13.95 per cent this year, compared with the 44.95 per cent slide in the S&P/ASX 200 Index.
The company said on May 2 that it was in the early stages of "potential strategic initiatives".
Volatile equity markets and tight credit have made executing transactions difficult, and many potential mergers and acquisitions have failed to be completed.
Anglo-Swiss mining firm Xstrata backed out in October of a US$10 billion acquisition of Lonmin, the world's third-largest platinum miner.
"A full takeover [of Santos] might not be on the cards because they can't get the value that they want, given where the market is now," said one Australian-based analyst. "That's why a joint venture may be the answer."
Such a move would keep control of projects in the company's hands and management intact.
The company negotiated a first joint venture in May with Malaysian state oil company Petronas, the third-largest producer of liquefied natural gas in the world, which will pay up to US$2.5 billion for a 40 per cent stake in Santos' Gladstone LNG plant and 450km gas pipeline.

[Trader Paul]

:)

Hi folks,

STO ... looking for some negative sentiment over the next
couple of months, as several negative time cycles come into
play, especially around:

2601-20022009 ... at least 4 negative time cycles
come into play, during this period.

Happy trading in 2009.

have a great day

paul

:)

=====

[rustyheela]

they also still have some ongoing issues with their indonesian panji mudbath, bloodbath but a couple of days ago a report said that they are trying to negotiate some sort of settlement to exit this environmental disaster. Reports say the damage bill could top $1 - $2b. with scientists saying it is impossible to cap until mother nature decides to call a halt!!
bit risky to take over with that issue unresolved, i would of thought!

[TheAbyss]

they also still have some ongoing issues with their indonesian panji mudbath, bloodbath but a couple of days ago a report said that they are trying to negotiate some sort of settlement to exit this environmental disaster. Reports say the damage bill could top $1 - $2b. with scientists saying it is impossible to cap until mother nature decides to call a halt!!
bit risky to take over with that issue unresolved, i would of thought!

It cost them $22.5 Million US but Santos have walked away from that liability. Link to doc follows.

http://www.asx.com.au/asxpdf/20081211/pdf/31f4nzb5n2ql90.pdf

[oldblue]

It cost them $22.5 Million US but Santos have walked away from that liability. Link to doc follows.

http://www.asx.com.au/asxpdf/20081211/pdf/31f4nzb5n2ql90.pdf

Leaving only possible third party claims against Santos Brantas which STO think would be successfully resisted.

[Boggo]

thinking on jumping into sto ? ;)

would like too hear from anyone who thinks she's good value at this price ?
Or is there more down side ?



With the current middle east conflict all oil stocks should benefit.

Bombs go down and oil goes up.

I am long on STO.

[white_crane]

It looks like STO has resistance at $15. So I'm going to wait for it to break $15 and do a retest before jumping on this.

[kam75]

STO has formed a decent looking Ascending Triangle reversal pattern. I think the resistance zone spans more to around the 15.25 level. I'm still to be convinced about the volume on this one. Wanna see it pick up before breakout with a definite increase on breakout day, at least around 10m and a decisive close above the resistance. There's gaps to fill at 17.13 and 18.55 so may have a bit in it.

http://sharesmadeeasy.com/STO.gif

[pan]

has been sold down in the last couple of days..

any chartists got a view on santos?

is the ascending triangle still present?

[jackson8]

has been sold down in the last couple of days..

any chartists got a view on santos?

is the ascending triangle still present?

i think it is just general market conditions at the moment keeping it down
they have just upgraded their reserves but oil prices are still supressed
i think also rumours of takeover by china pet. have worn off , like you i would be interested in a chartists view

[pan]

positive movement in the oil will see positive moment in the sp i guess.

my opinion from the chart is that it is starting to just trade sideways.

would be good to hear another view

[jackson8]

positive movement in the oil will see positive moment in the sp i guess.

my opinion from the chart is that it is starting to just trade sideways.

would be good to hear another view

you will notice that sto , wpl , osh all have a similiar chart pattern over last three months
waiting for a trigger for a movement either way i suppose

[rustyheela]

can santos break the resistance shackles and get out of the 5 month triangle?

looks good, consistently higher lows. Go the STO!!:):):)

[So_Cynical]

your prob looking for this thread....

http://www.aussiestockforums.com/forums/showthread.php?t=2722

[Go Nuke]

Well, i decided to buy back into STO on Friday, though seeing the dow down 180 points the other night Im regretting that I did.

What lead me to buy back in..well...

Volume increasing slightly over the past couple of days.

More than double the amount of buyers vs sellers.

At least 2 good attempts lately to hold above $15 failed but on Friday to me it looked like a better attempt (though holding over $15.50 looks more bullish these days).

7 day has crossed and the 21 day is close to crossing the 100 day MA.

All this leads me to believe/hope that the sp will run to about $17.50 - $18.50 based on previous support resistance.

Lets wait and see.....Im probably wrong :>

[jackson8]

hi all
anyone have any ideas why santos has risen so much today
seems to be going against the general market
maybe takeover speculation starting to build again ?

[pan]

well santos closed above 15.60 today after touching 16.00 hopefully have a good day in US and hopefully see the break about 16.00 tomorrow??

cheers

[vincent191]

Me too have no idea why it is going up but I am very happy. Maybe the forward price of oil & gas is forecasted to go up? Anyone got any research?

[kennas]

Well, i decided to buy back into STO on Friday, though seeing the dow down 180 points the other night Im regretting that I did.

Lets wait and see.....Im probably wrong :>Right on this one GN, nice work! That ascending triangle you id looks to have been broken. Should move higher from here in all probability.

[pan]

interesting article regarding santos

http://uk.reuters.com/article/oilRpt/idUKHKG6040520090324?sp=true

[dan-o]

What do people think of their equity raising? $12.50 per share seems like a good deal to me (assuming your' holding)

[nikemi]

What do people think of their equity raising? $12.50 per share seems like a good deal to me (assuming your' holding)

What you have to remember is that rights issues actually adjust the pre issue price, so your entire holding if you bought at 17.09 which is last close and take up the rights issue will be valued at 15.78 per share and this is what the closing price will be adjusted to. of course if you bought before that you will have to work out for yourself what your average price per share will be. and also with rights issue one cannot expect the same dividend even if the pay out ratio remains the same. so there are a lot of things to consider not just the price.

[Ruincity]

First of all: Surprise equity raising is annoying to say the least..

At least it is available to retail investors as "sophisticated investor" capital raising not available to regular sharehoulders stinks.
As a shareholder I personally will be looking to take this offer on..
I have ducked in and out of STO many times and it looks like I may be forced to take a little bit of longer term view now.
IMO fundamentals of both this company and it's sectors/sub sectors are good, I was particularly liking the look of it's chart as well but I suspect that won't be looking so pretty come wednesday...

Just wondering how the offer will be put accross to retail holders now?

[oldblue]

As with most of the many recent equity raisings, shareholders are almost "forced" to subscribe to avoid quite heavy dilution of their holdings.
Will be interesting to see what price STO trades at once trading resumes, ex entitlement.
I could be tempted back in if the price is right!

;)

[Harro7]

I've only just begun to play the game and have been caught of guard by this announcement. I experienced a trading halt whilst holding FMG also as they sought external finance.

Santos is undergoing a capital raising. From what many of you say it won't be a pretty chart of ascending triangles when it returns... how do I protect my investment as a small time player, or is there no hope for someone in my position?

[sanford002]

or the Santos could take off like BHP & BSL...

take a look at these articles

http://www.shawstock.com.au/news/pos...l-raising.aspx

http://www.businessspectator.com.au/...cument&src=tnb

[vincent191]

Given rising oil prices and a strenghtening equity market and a hefty 27% discount you will be mad not to take up the rights issue.

Santos does not pay a very good dividend but this sort of discounted equity issues more than makes up for it.

Going forward I hope they can get another equity partner in the Gladstone project, currently they hold a 60% interest. To me it is far too much. The methane to LPG process is very new and never been tried before on a large scale. It is full of risk but if it is successful the rewards are very big. I would love to see Santos spread the risk a bit more, it would be nice if they can off load another 10% of the Gladstone project.

[Dangerous]

Given rising oil prices and a strenghtening equity market and a hefty 27% discount you will be mad not to take up the rights issue.

Santos does not pay a very good dividend but this sort of discounted equity issues more than makes up for it.

Going forward I hope they can get another equity partner in the Gladstone project, currently they hold a 60% interest. To me it is far too much. The methane to LPG process is very new and never been tried before on a large scale. It is full of risk but if it is successful the rewards are very big. I would love to see Santos spread the risk a bit more, it would be nice if they can off load another 10% of the Gladstone project.

I sold STO a few weeks ago as demand for oil has tanked and refiners are over their heads in stock. I see oil retracing significantly in the short to medium term until the huge cutbacks in production kick in and bring it back to current levels or higher.

After seeing the rights issue i'm glad i took my profits on STO. I would be furious to see a $12.50 rights issue so far below current trading levels.

As for Gladstone, i don't think it will be so easy to get another partner as Petronas are already in 40%. The max STO would want to see another partner grab is 20%, leaving it 40-40-20. I view JV's as spreading capital requirements more than spreading risk. They are an evil necessity of the industry and to get another partner will only make the project more difficult.

[jono1887]

Well looks like that discounting hasnt gone well with their stock price... how stable is STO?? is it worth getting at 14.8?

[oldblue]

The SP of most companies which have had heavily discounted capital raisings recently has taken an initial knock, eg TSE, OST, BSL, NPX, FBU. Not surprising when you consider the volume of shares being issued and the need for some shareholders to sell in order to afford the "cheaper" new shares.
As the market settles after the issue, the SP's have recovered somewhat, not entirely, because of the dilutionary effect of the issues, but enough to warrant taking a cautiously optimistic view in most cases.
I don't see any reason why STO's SP shouldn't follow a similar pattern, in the absence of any other developments but DYOR.

[oldblue]

I don't see any reason why STO's SP shouldn't follow a similar pattern, in the absence of any other developments but DYOR. QUOTE.


I've just put my money to work to test the theory by buying a few on the re-opening following the announcement of a successfully oversubscribed institutional offering.

;)

[grace]

I don't see any reason why STO's SP shouldn't follow a similar pattern, in the absence of any other developments but DYOR. QUOTE.


I've just put my money to work to test the theory by buying a few on the re-opening following the announcement of a successfully oversubscribed institutional offering.

;)

I see the offer does not close until Thursday 14/5 for retail. So I can buy tomorrow and still get the 2for5 at $12.50? Is that how you read it? I've always wanted some Santos shares.:)

[oldblue]

I see the offer does not close until Thursday 14/5 for retail. So I can buy tomorrow and still get the 2for5 at $12.50? Is that how you read it? I've always wanted some Santos shares.:)

I don't think so.

Although "Record date" is 14 May, the mechanics of buying shares means that purchases are not "recorded" until 3 days after purchase ( T+3).
Yesterday's trading would have been "ex entitlement", or at least that was my assumption when I bought a few.

[venno]

Well after selling up my portfolio over a month ago and sitting on the sidelines watching the market, I jumped into Santos at 13.74 a share (20k quantity) on Thursday hoping for a good day today.

Not dissapointed with todays jump, but I did expect it to go a little higher. I was hoping to sell today and take a quick profit but the price didn't hit my limit so I'm left holding until Monday open now.

Always get a little nervous sitting on large holdings over the weekend, I hope the SP continues upwards next week.

[venno]

This stock is starting to look up in todays trading, getting closer to my trigger:)

It will be interesting to see how the market responds to the dilutionary effect of the equity raising, or is it already priced in do you think:confused:

A continued downtrend in oil will not be a welcome event for the SP though:(

[venno]

Well sold my holding at open this morning for a tidy little profit:)

Will be keeping an eye on this stock though as it still presents an opportunity to trade short term for a respectable profit.

[rustyheela]

maybe retrace to 13.50 - 13.80 zone, volume is tapering off back to average / normal so rights issue holders have or are stopping selling or bein shaken out,.Another down day on lower vol could be a goer for a long:)

[Mad Mel]

As the market settles after the issue, the SP's have recovered somewhat, not entirely, because of the dilutionary effect of the issues, but enough to warrant taking a cautiously optimistic view in most cases.

I don't see any reason why STO's SP shouldn't follow a similar pattern, in the absence of any other developments but DYOR.

This article states that Santos' Environmental Impact Statement may be approved in the next two weeks (it would be the first among the Gladstone competitors). As well, it reiterates that Santos has said that it is "very, very close" to announcing a gas buyer.

If (huge if, obviously) these both hold true, the rebound after this capital raising could be very nice. Timing of any announcements will be interesting, it would be nice to buy more shares first when the retail portion are released for trading on June 17.

http://business.theage.com.au/business/green-light-close-for-santos-8-billion-qld-lng-project-20090524-bjgz.html

[johannlo]

re: impact of SPP and dilution

Correct me if I'm wrong but isn't there going to be another hit on the day shares go on market due to profit taking? Isn't this the general behaviour to be expected?

[Mad Mel]

re: impact of SPP and dilution

Correct me if I'm wrong but isn't there going to be another hit on the day shares go on market due to profit taking? Isn't this the general behaviour to be expected?

Santos' shares are being released on two stages, 58% of them went on the market Friday, the rest June 17. On Friday, it indeed did close $0.55 lower than the day before.

[oldblue]

Some good news for Santos here.

http://business.smh.com.au/business/green-light-looms-for-santos-project-20090524-bjhr.html

;)

[gooner]

I applied for additional rights under the rights offer. Anyone know when STO will advise whether my application has been filled in full or partially?

I hold STO

[rustyheela]

According to the retail entitlement doc issue of new shares on 16 th june and normal trading of new shares issued expected on the ASX wednesday 17th june

[rustyheela]

oh, and the despatch of confirmation notices and posting on computershare website also on the wednesday 17th june

[gooner]

oh, and the despatch of confirmation notices and posting on computershare website also on the wednesday 17th june

If they post on Wednesday, I will probably not get to Thursday or Friday. Presumably STO will need to do an ASX announcement of policy and so that people know if there is an underwriting overhang or not?

[rustyheela]

i would expect it to be oversubscribed many times over and scaled back substantially as based on the weeks price action its a 20% money for minimal risk as since the offering it hasnt really traded anywhere near offer price of $12.50 and the p.o.o. seems on a upward trajectory

[vincent191]

They are very very close to making an announcement about signing sale contracts to buy the gas that will be produced when Gladstone comes on line.

I guess maybe June 17 is the "very very close date"???

[gooner]

i would expect it to be oversubscribed many times over and scaled back substantially as based on the weeks price action its a 20% money for minimal risk as since the offering it hasnt really traded anywhere near offer price of $12.50 and the p.o.o. seems on a upward trajectory

Lots of investors sometimes never bother with rights issues, so I am hoping to get more than my allocation.

As you say it is free money, so you would expect it to be oversubscribed, but never underestimate stupidity.

[gooner]

Rights shares received in account today. Have sold some and suspect others have as STO tanking today

[skyQuake]

Rights shares received in account today. Have sold some and suspect others have as STO tanking today

Hi gooner, I thought the shares should be available for trading tomorrow?
http://asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00953602

The schedule listed today as the Allotment date, but tomorrow as the trading day/

[gooner]

Hi gooner, I thought the shares should be available for trading tomorrow?
http://asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00953602

The schedule listed today as the Allotment date, but tomorrow as the trading day/

skyQuake

They were sitting in my online broking account so I traded them...........

No one told me not too - hope I did not break the law.

[skyQuake]

skyQuake

They were sitting in my online broking account so I traded them...........

No one told me not too - hope I did not break the law.

Nah just that I noticed the same thing with MQG :confused:
The dates they give out is different to what happens... still trying to work out whats going on.

[gooner]

i would expect it to be oversubscribed many times over and scaled back substantially as based on the weeks price action its a 20% money for minimal risk as since the offering it hasnt really traded anywhere near offer price of $12.50 and the p.o.o. seems on a upward trajectory

Rustyheela

Turns out you were wrong and the offer was undersubscribed. However, for some reason, Santos still scaled back shareholders and gave the shares to underwriters instead.

Surely some mistake?????:confused:

[skyQuake]

skyQuake

They were sitting in my online broking account so I traded them...........

No one told me not too - hope I did not break the law.

Ok, looks like you sold your old shares today. The new ones are in your account, but probably not tradable.

Related to that, do you mind me asking when were you notified how many shares you have been allocated/scaled back?

Cheers

[gooner]

Ok, looks like you sold your old shares today. The new ones are in your account, but probably not tradable.

Related to that, do you mind me asking when were you notified how many shares you have been allocated/scaled back?

Cheers

skyquake,

I sold most of my original shareholding down in anticipation of receiving rights shares - I sold more today than I had in my account at COB yesterday so have definitely sold some rights shares.

I saw how many shares were in my account so knew how many I received. STO's announcement today also explained the allocation policy. Also if you know your HIN, you can check your allocation on STO's website ("check your shareholding")

[qldfrog]

anyone who asked up to 5000 shares will get them, anything above 5000 restricted to 3 times your initial allowance
I "just" ask 20k worth, I could have asked three times as much..a good learning experience !!! even if I expect STO might fall a bit in the coming days as people like me offload a bit

[gooner]

anyone who asked up to 5000 shares will get them, anything above 5000 restricted to 3 times your initial allowance
I "just" ask 20k worth, I could have asked three times as much..a good learning experience !!! even if I expect STO might fall a bit in the coming days as people like me offload a bit

qldfrog

I expected to be scaled back as I assumed it would be oversubscribed, however I did not expect to be scaled back so shares could be given to non-shareholders. Underwriters enter into a commercial agreement - they are effectively suppliers, so Santos has chosen to transfer shareholder value from shareholders to a supplier.:confused:

[gfresh]

anyone who asked up to 5000 shares will get them, anything above 5000 restricted to 3 times your initial allowance
I "just" ask 20k worth, I could have asked three times as much..a good learning experience !!! even if I expect STO might fall a bit in the coming days as people like me offload a bit

Indeed.. I asked for 5 times my allocation (still under 5000), which I thought was being cheeky, but in hindsight I maybe should have bought more if I had known they would allow such large overbuys.

[gooner]

Indeed.. I asked for 5 times my allocation (still under 5000), which I thought was being cheeky, but in hindsight I maybe should have bought more if I had known they would allow such large overbuys.

I feel sorry for anyone with just a hundred shares on which the rights would be 40 shares

- apply for 5,000 additional shares and you get the whole 5,000
- apply for 5,001 additional shares and you only get 3 times 40 which is 120 shares

What idiot came up with that allocation policy?

[qldfrog]

gooner,
as I understand it, you can have 5000 PLUS 3 times your allocation so not so bad..but amazed indeed that they do restrict allocation while given shares to underwriters..
I do own STO...

[gooner]

gooner,
as I understand it, you can have 5000 PLUS 3 times your allocation so not so bad..but amazed indeed that they do restrict allocation while given shares to underwriters..
I do own STO...

qldfrog

The announcement is clear - if you applied for more than 5000, you only got 3 times your rights allocation. So if your rights allocation was 50 shares, you only got 150 extra shares. But if you applied for 5,000 you got the full amount even if you had only 50 shares. Some big anomalies apparently looking at posting on another forum.

I applied for lots so was not hit by this anomaly but was hit by the 3 times limit.

I can not conceive how the board consider it is acting in the best interests of shareholders (their legal obligation) by giving cheap shares to underwriters instead of shareholders.

[qldfrog]

Gooner, just went and read again the announcement.Indeed, you might be right and it does not make much sense.
As I asked less than 5000, I did not focused on that case.
Hard to understand why they would act that way, you would expect a minimum of 5000 unit for every participant.....Let's hope for you it is a misunderstanding :confused:

[db96]

Gooner, just went and read again the announcement.Indeed, you might be right and it does not make much sense.
As I asked less than 5000, I did not focused on that case.
Hard to understand why they would act that way, you would expect a minimum of 5000 unit for every participant.....Let's hope for you it is a misunderstanding :confused:

This is not a mistake. I know of a person who were eligible to 100 shares. He appied for 7000 shares and was given 300 shares. He emailed them arguing that he should be alllocated atleast 5000 shares. They gave a reason that they used some formula :confused: to work out the allocation and it is at there discretion. Nothing you can do about it.

[gooner]

This is not a mistake. I know of a person who were eligible to 100 shares. He appied for 7000 shares and was given 300 shares. He emailed them arguing that he should be alllocated atleast 5000 shares. They gave a reason that they used some formula :confused: to work out the allocation and it is at there discretion. Nothing you can do about it.

db96

ridiculous isn't it - those who supported the issue the most were shafted with less shares:mad:

[dan-o]

man that sucks, im a small shareholder, who wouldve loved to buy plenty under the offer but only took up what my entitlement letter said!

[gooner]

Seems to be languishing a bit - rights holders should have finished selling by now, so might start to see some move up soon.

Oil price is back at $70 as I write this, so looking forward to a good day tomorrow.

Still a way to go to get the theoretical ex rights price of $15.87

[vincent191]

Any idea why the SP of Santos has fallen by so much lately? It has fallen by much more than the drop in oil price.

[oldblue]

Any idea why the SP of Santos has fallen by so much lately? It has fallen by much more than the drop in oil price.

There was a recent report about delays in the Longtom gas project which impacts to some degree on Santos but IMO the SP decline has been a bit overdone.

For a more optimistic view, have a look at this interview with CEO, David Knox.

http://www.businessspectator.com.au/bs.nsf/Article/KGB-TV-David-Knox-pd20090707-TQ3JT?OpenDocument&src=kgb

;)

[Zaij]

Just bought into this today, seems to be solid company, low debt, good earnings, takeover potential.

Recent price battering unjustified too, will hope to see correction soon.

[Iggy_Pop]

Agree Zaij, I bought some a while ago at $14 and will buy a few more when I get my free money back from the ANZ share placement.

[philly]

Do people really think that STO is grooming itself as a takeover target when the ownership limits are removed? IMHO removing the limits will force it to become a big player or be gobbled up. Its recent purchase of a 20% interest in ESG shows that it is looking forwards.:2twocents

[Zaij]

Win - Win Philly, Win - Win.

With NSW power in pretty much a shambles, green power on the up and up (gas is much cleaner than coal), such a massive field (8-9 billion BoE equivalent - I recall reading somewhere that iraq's second largest oil field could only extract 1.5mil at it's peak) and such high quality assets, hard to see a negative side to buying into STO.

Further, manufacturing indices in the US on the rise, indicating to me at least that manufacturing worldwide is going to begin getting out of it's current sluggish levels also means energy stocks should be some of the biggest winners in the coming months.

[oldblue]

Do people really think that STO is grooming itself as a takeover target when the ownership limits are removed? IMHO removing the limits will force it to become a big player or be gobbled up. Its recent purchase of a 20% interest in ESG shows that it is looking forwards.:2twocents

The ownership limits have already been removed but what's holding up any possible "corporate action" is an embargo on the corporate advisers who were involved in a recent confidential look at STO's books.

STO has its own plans for moving forward, a lot of which involve the development of its coal seam gas assets, but that won't necessarily deter a determined big from a bigger player.

Disc: Holding STO.

PS. I've been trying to find the report on which I based my comment here but haven't been able to. Perhaps you should disregard my first paragraph unless/until someone else can verify or discount.

[jackson8]

The ownership limits have already been removed but what's holding up any possible "corporate action" is an embargo on the corporate advisers who were involved in a recent confidential look at STO's books.

STO has its own plans for moving forward, a lot of which involve the development of its coal seam gas assets, but that won't necessarily deter a determined big from a bigger player.

Disc: Holding STO.

PS. I've been trying to find the report on which I based my comment here but haven't been able to. Perhaps you should disregard my first paragraph unless/until someone else can verify or discount.

hi old blue

here is a link to a news report which may offer a little more information on the subject for you

http://www.news.com.au/perthnow/story/0,21598,25750635-951,00.html

[Zaij]

Markets up, Santos down... thoughts? Am I missing some technical analysis here? Price first started dropping after the announcement saying Santos had signed a 100 million dollar gas contract with some mining company the other day, falling ever since.

[Iggy_Pop]

Markets up, Santos down... thoughts? Am I missing some technical analysis here? Price first started dropping after the announcement saying Santos had signed a 100 million dollar gas contract with some mining company the other day, falling ever since.

Oil down 6% might have some influence. Give STO time and it will improve. Good medium term investment.

[Zaij]

Oil down 6% might have some influence. Give STO time and it will improve. Good medium term investment.

STO is largely gas though which has gone up. Hell, Santos is looking to sell it's oil interests off darwin and shiz - doesn't make sense to me.

[Real1ty]

Santos has always had "take over" price included into it's SP.

Recently analysts are starting to think that they may not be as attractive a target as first thought and rumours are that it won't happen.

If the above is true, and it is only speculation and rumours, then that might explain some of the weakness in the SP in comparison to some of its peers.

[Zaij]

Been reading all over the place that British companies are very keen to develop coal seam gas in Australia. Is this just typical HC rampers talking stuff up, or is there any actual basis for their claims?

Also, they keep saying (almost every day in fact) that there's "big buys after close". Is there any way of verifying their claims, or are they just talking smack?

Regards,
Zaij.

[oldblue]

Well it is a fact that both British Gas and Shell have spent big money buying positions in Australian coal seam gas. BG wanted more but its bid for Origin was knocked back.
The Brits aren't the only ones interested of course. Petronas, ConocoPhillips, Sojitz are also there.

[Datsun Disguise]

Also, they keep saying (almost every day in fact) that there's "big buys after close". Is there any way of verifying their claims, or are they just talking smack?


If you have access to daily trade information ( i do on comsec) then you can see how the day is trading. Following close at 4 pm securities go into pre open and people but in their bids to buy / sell. So if you see a lot of trades going through post 4pm (all will have same time stamp) then you can confirm their claims.

[gooner]

Been reading all over the place that British companies are very keen to develop coal seam gas in Australia. Is this just typical HC rampers talking stuff up, or is there any actual basis for their claims?

Also, they keep saying (almost every day in fact) that there's "big buys after close". Is there any way of verifying their claims, or are they just talking smack?

Regards,
Zaij.

STO is a bit hard for HC rampers given its size.

FMG, GGG and various other speculatives are a different kettle of fish.

[Trembling Hand]

So if you see a lot of trades going through post 4pm (all will have same time stamp) then you can confirm their claims.


Also, they keep saying (almost every day in fact) that there's "big buys after close". Is there any way of verifying their claims, or are they just talking smack?

This is classic cognitive bias. For ever share bought there is a share sold.

For every "big buys after close" there is an exact opposite "big sell after close" or no trade would happen.

To weight one side over the other will only tell you where your bias lay. Nothing more nothin less.

[oldblue]

This is classic cognitive bias. For ever share bought there is a share sold.

For every "big buys after close" there is an exact opposite "big sell after close" or no trade would happen.

To weight one side over the other will only tell you where your bias lay. Nothing more nothin less.

Quite right.

Heavy buying/selling is only significant if it takes place in an uptrend or a downtrend. Recent STO trading has been pretty much sideways and volumes have been unremarkable.

[Datsun Disguise]

But TH, the bias can lie on either the buy or the sell side, true a trade = buy + sell. But you can also determine buying pressure by looking at if the trade came off the see list of the buy list. If the trades are consistently coming off the sell list then you've got buying pressure and vice versa. Pressure makes the price move in either direction and is relevant. So big buys (ie volume off the sell list) can be relevant - although what it tells you is certainly up to your interpretation!

[Trembling Hand]

But TH, the bias can lie on either the buy or the sell side, true a trade = buy + sell. But you can also determine buying pressure by looking at if the trade came off the see list of the buy list. If the trades are consistently coming off the sell list then you've got buying pressure and vice versa. Pressure makes the price move in either direction and is relevant. So big buys (ie volume off the sell list) can be relevant - although what it tells you is certainly up to your interpretation!

I assume you are talking about the market depth list here?

You still have it wrong though. Just because one large punter decides to pay up a price level or two and is met by an equal size large punter you are kidding yourself if you think thats meaningful in its self.

You might wanna waste a couple days of your time studying VSA. Could change you perspective?

[rock86]

Don't know that much about gas/oil wells drilling and findings.

But Santos released an announcement today http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00977090 explaining that Santos discovered gas in Browse Basin offshore WA. I'm not that sure of the announcement outcomes, but investors sure liked it :)

ps. what do they mean the well will be plugged, why would they do that:confused:

[swm79]

I'd say it's most probably due to that fact that the MASSIVE Gorgon project is likely to get approval and "big players" might be shifting money to Chevron, Shell and Exxon with the dollar being high at the moment. Gorgon is by far the largest of the gas targets but suffers from the 4 D's - deep, distant, difficult and dirty... Santos is 4 or 5 years away from delivering. Also, there's talk around about AOE being taken over - possibly people jumping ships.



Disclaimer:Holds Santos and Arrow

[TheAbyss]

Don't know that much about gas/oil wells drilling and findings.

But Santos released an announcement today http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00977090 explaining that Santos discovered gas in Browse Basin offshore WA. I'm not that sure of the announcement outcomes, but investors sure liked it :)

ps. what do they mean the well will be plugged, why would they do that:confused:

Doubt that today's movement is related to the Browse Basin news as BPT are a stake holder and haven't budged at all though BPT have defied all rallies in the market and POO to remain stagnant to negative with their SP.

3% gain on average Volume is good but could just as easily go back 3% again tomorrow.

The takeover premium built into STO makes it difficult to realise much gain at the moment though i am still holding both STO and BPT as they are both quality stocks with great stories to tell.

[Zaij]

STO FINALLY broke $15 today on the back of some recent good news and todays pretty good report. Back down to $14.8 now, but barring any bad news seems to be poised to smash resistance.

[michaelpeachey]

Pushed $16 about six weeks ago, now playing around the high $13's. Any thoughts? Just trying to revive this thread, as being a local I'm keen on people's thoughts on this one!

[So_Cynical]

Pushed $16 about six weeks ago, now playing around the high $13's. Any thoughts? Just trying to revive this thread, as being a local I'm keen on people's thoughts on this one!

As the chart clearly shows...buying STO at under $13.90 has been somewhat profitable in the past and the ideal entry level for anyone wanting to build a value position in this great company...IMO

[johannlo]

Momentum is clearly gone from this one to the other gas plays. But agreed at first glance the 13s appears to be a good LT entry point.

Need to look at some numbers in detail first, I'm not so hot with making FA valuations so prob need to skim some reports etc. first to get a grip on the key figures (cashflow, eps, P/E etc.) and a sound handle on near and long term opportunities coming online. Have heard many times in the past that STO SP factors in takeover opportunity so maybe with all the majors making big moves that sentiment has dipped.

[thierry]

STO have increased their resource estimate the other day..

does anyone know any broker recommendations for this stock?

Seems to be good value at the moment?

[skyQuake]

STO have increased their resource estimate the other day..

does anyone know any broker recommendations for this stock?

Seems to be good value at the moment?

Last upgrade was by UBS on 22nd Jan (neut to buy), no comments from the major IBs after the reserves upgrade. AOE had a reserve upgrade on the 27th Jan but had no ratings upgrade either.

[So_Cynical]

Can someone that knows Santos better than i do please explane to me why the SP fell off a cliff yesterday? STO sold 15% of there GLNG project for 650 mill and the SP promptly fell of a cliff...how can the market react so badly to Santos pocketing 650 mill? :dunno: just seems wrong to me.

[ParleVouFrancois]

One of the reasons is that when they sold their share to Total for 650 million, it was about 20% lower than the expected value, they also lost the clause in which Petronas pays Santos 500 million when the FID (Final investment decision) on the 2nd train is made. So in effect they sold out their position for 150 million, on top of this, they are using "portfolio gas" or gas that hasn't been found yet on their tenements, to fill up train number 2. On top of all of this it is anticipated that more equity or further sell downs in Santo's interests is required to pay for the capital costs of the project.

All in all, a bad few days to be holding STO. :2twocents

[skc]

Can someone that knows Santos better than i do please explane to me why the SP fell off a cliff yesterday? STO sold 15% of there GLNG project for 650 mill and the SP promptly fell of a cliff...how can the market react so badly to Santos pocketing 650 mill? :dunno: just seems wrong to me.

2 main things

1. Market was expecting / hoping $1B so they sold on the cheap
2. Big capital raising pending so people running away from the dilution

Here's a good article on the story.

http://www.businessspectator.com.au/bs.nsf/Article/Santos-Total-Petronas-LNG-gas-pd20100909-95663?OpenDocument&src=srch

Probably overdone in my opinion but any buyers need to be ready for the cap raising.

[So_Cynical]

Thanks for your answers PVF and SKC all makes more sense now...have to admit the whole CSG thing in central QLD based on Gas that isn't actually flowing has always had me a little skeptical....still buying STO at around the $12 level has proved to be profitable over the last few years, probably will prove to be again.

ill pass i think.

[ricee007]

So, I was having a bit of a play the other day.

Some "people" are limited to buying the ASX20... others largely want to. IE:->ASX20 listing should, pretty much always, increase SP.

Brambles, BXB is in the ASX20.
BXB has a marketcap of $8.8Bn, according to ComSec.

Santos, STO is not in the ASX20.
STO has a marketcap of $10.6Bn, according to ComSec.

If STO goes back to $14 or so, this gap will widen significantly.

I can't be bothered checking the rest of the ASX20 market caps, but, I wouldn't be surprised if STO was greater than one or two more... and I WOULD be surprised if STO wasn't greater than one or two more at $14.

Of course, having a bigger market cap doesn't mean ASX20 inclusion...

But, 20% larger market cap, with $12.50+ or so providing a solid base (albeit, possibly rooted by an equity raising.... but, an equity raising would give it a bigger market cap anyway!)........ really makes me wonder if it is just a matter of time until STO is included in the ASX20... and the SP thanks everyone.

Anyone know how the process works? Does S&P just consider it subjectively every quarter and go, hmm, you know what? STO looks like it will consistently be bigger than BXB... lets swap them?

Is December suddenly looking like quite a possible date?

As to the cap raising...
stolen from HC:
$15Bn proposed cost for Gladstone.
45% ownership = $6.75Bn costs

Apparently STO have $6Bn in 'funded lines' (I thought it was around $4bn.. but, at any rate, its significant)
+ any cash on hand (ComSec says $2.2Bn for FY2009?)
+presume $400m netprofit

[ricee007]

Oh, and, of course, I forgot to add probably selling a further part of their stake in the project.

I'm torn....

In a lot of ways, I believe this project will be NPV +... so want Santos to keep as much as possible... (sell 5%)

However, if they sold, say, 15%...this would prevent an equity raising (and probably debt raising?)... and may be short-term SP +, giving me a nice time to exit?

[skc]

So, I was having a bit of a play the other day.

Some "people" are limited to buying the ASX20... others largely want to. IE:->ASX20 listing should, pretty much always, increase SP.

Brambles, BXB is in the ASX20.
BXB has a marketcap of $8.8Bn, according to ComSec.

Santos, STO is not in the ASX20.
STO has a marketcap of $10.6Bn, according to ComSec.

Interesting thought.

S&P usually rebalances when there is a vacancy. FGL is a potential takeover target so if that happens the door will be open for STO.

However, there are quite a few other viable candidates for ASX20 inclusion: SGP, CCL, AMC, LEI, ORI (each ~9-10B) and FMG (~$15B).

And it is quite difficult to work out how much money is in ASX20 only funds. Will there be enough demand from these funds to drive up the share price substantially?

So all in all I probably would buy STO purely on the chance that it will be included in ASX20 one day.

[SilverRanger]

Santos has long been tipped to raise capital to fund their LNG projects, and so they did.
But it's quite disappointing that they didn't bothered with a retail component. I reckon they could have done it easily with a SPP for that $500 million and that will keep us shareholders happy :(

[oldblue]

Two reasons for the capital raising in this manner, IMO.

First, the Gladstone LNG plant is expected to be a USD16 billion project, rather hefty for a company of STO's size and strength, I would think.

Second, it's one thing to build the plant but it's another to find buyers for the off-take, at an economic price. A big part of the deal was to tie up agreements for this, which involved selling down a further big chunk of the project. The resultant 30% left to STO is a manageable size.

Why the placement and not a SPP? Probably has to do with assuring certainty to the overall deal and avoid having to wait on the reception from shareholders, many of whom had long been signalling their reluctance to commit more funds to STO.

[oldblue]

Successful completion of the $500m institutional placement.

http://asx.com.au/asxpdf/20101220/pdf/31vq8fxdxc2jjw.pdf

Shareprice responds favourably!

[SilverRanger]

Successful completion of the $500m institutional placement.

http://asx.com.au/asxpdf/20101220/pdf/31vq8fxdxc2jjw.pdf

Shareprice responds favourably!

I think the share price movement today has more to do with the KOGAS's off-take agreement and stake purchase, which would add much more certainty to the GLNG project.

Should that have been a SPP instead, we could have comfortably pocketed $20 million!!

[oldblue]

Yes, it would have been nice!

But let's not feel too hard done by. I see that directors have been buying on market - which is normally a good sign.

:cool: