6 Oct 2010investor presentation● Neutral
Shareholder update restating the half-year results: A$198m profit (up 94%), 22c dividend, production down 9% on floods. Repeats GLNG FID targeted for 2010 and first LNG 2014. No new information.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
1 Oct 2010drilling progress report● Neutral
ESG's monthly report: Ellendale 1 corehole (PEL 433, Santos 35%) reached 426 m with 5.2 m net coal. Culgoora 1 in PEL 238 (Santos 35%) stuck at 189 m, was plugged back, and Culgoora 1A is redrilling at 89 m.
23 Sept 2010investor presentation● Neutral
David Knox's conference speech in Darwin restates the LNG strategy: Darwin LNG 11.5%, PNG LNG, GLNG at 45% after the Total deal, and Bonaparte LNG. Says the portfolio could deliver over 5 mtpa of Santos equity LNG by decade end. No new announcements.
22 Sept 2010other● Neutral
Cover note attaching the UK prospectus for the €650m subordinated notes announced 17 September, due 2070. No new commercial information beyond the earlier announcement; the prospectus is a legal document for the London listing.
17 Sept 2010capital raising announcement▲ GoodMajor
Santos issues a €650m (about A$900m) hybrid at 8.25% fixed for 7 years, 60-year term, with 100% S&P equity credit and no conversion into shares. It reduces any future equity need dollar for dollar; GLNG FID on train 1 still expected by end 2010.
17 Sept 2010investor presentation● Neutral
Presentation sets out the funding plan: over A$7bn pre-funded via GLNG sell-downs, asset sales, the 2009 A$3bn equity raising and the A$900m hybrid. New equity only if required. Repeats the hybrid terms announced the same day.
16 Sept 2010drilling result▲ Good
Apollo Gas reports coal seam gas holes Cuan-1 (1,422 m, 78.5 m coal, up to 15 m3/t, 99% methane) and Turill-1 (1,110 m, 31 m coal) completed in PEL 456. Santos holds 15% with an option to go to 50%; results called promising.
16 Sept 2010price query● Neutral
Santos confirms it has talked to potential hybrid investors, following the 26 August flag that it was considering a hybrid issue. No certainty a deal will happen; it says it complies with disclosure rules.
9 Sept 2010investor presentation▲ Good
Presentation repeats the Total deal: A$650m for 15% of GLNG, 5 mtpa binding offtake, Santos at 45%. Adds timing: first-train FID in 4Q 2010, second train about 12 months later, first LNG 2014, Federal approval expected October.
9 Sept 2010asset acquisition disposition▲ GoodMajor
Santos sells 15% of GLNG to Total for A$650m, cutting its stake from 60% to 45% (PETRONAS 35%, Total 20%). Binding LNG offtake now totals 5 mtpa (PETRONAS 3.5, Total 1.5), underpinning two trains. PETRONAS no longer pays extra on later trains.
1 Sept 2010director officer appointment● Neutral
James Baulderstone has resigned as Company Secretary to become VP Eastern Australia, and David Lim has been appointed Company Secretary. This implements the changes announced on 11 August.
1 Sept 2010drilling progress report● Neutral
Beach's August report: Coonatie-19 is cased and suspended, and Coonatie-20 is at 2,779 m, with more rain delaying Santos-operated drilling. Two further Coonatie wells remain in the seven-well campaign (Beach 17.14%). Beach's own Encounter-1 shale well is due mid September.
30 Aug 2010farm in farm out agreement▲ GoodMajor
Santos sold 55% of its Spar (WA-4-R) interest to Apache for US$31m upfront, with up to US$85m more depending on Spar 2 reserves. Santos keeps 45% of Halyard and Spar; Apache operates. Halyard is due online mid 2011, with about 335 PJ gross recoverable.
26 Aug 2010half year report▲ GoodMajor
Santos reported first-half net profit of A$198m (up 94%) on higher prices and lower exploration spend, with a 22c interim dividend unchanged. Production fell 9% to 24.2 mmboe on floods. Funding capacity is A$6.4bn; GLNG FID is still targeted for later in 2010.
26 Aug 2010investor presentation● Neutral
Half-year results presentation repeats the A$198m profit, 22c dividend and GLNG FID in 2010. It lists funding options including a GLNG equity sell-down, export credit financing, hybrids and asset sales, with new equity only if needed to support the credit rating.
26 Aug 2010half year report▲ Good
Full half-year report: net profit A$198m (up 94%), underlying A$210m, revenue A$1,134m, interim dividend 22c fully franked. Production fell 9% to 24.2 mmboe on Cooper Basin floods. Confirms the earlier profit guidance.
16 Aug 2010asset acquisition disposition● Neutral
Drillsearch is selling its 2% Naccowlah Block interest to Bounty Oil & Gas for A$1.15m. Santos (55.5%) operates the block. This is a minor change among the partners and does not alter Santos's own stake.
12 Aug 2010material agreement● Neutral
ESG's gas supply MoU, originally with Babcock & Brown (up to 40 PJ/a), has been assigned to National Power for a proposed northern NSW gas power station. Santos holds 35% of PEL 238. This is a non-binding MoU and the project was delayed after Babcock & Brown collapsed.
11 Aug 2010director officer appointment● Neutral
Peter Cleary, ex-BP, joins as VP Strategy and Corporate Development. Mark Macfarlane becomes CEO of GLNG Operations, and James Baulderstone becomes VP Eastern Australia. David Lim takes over as Company Secretary. All effective 1 September 2010.
9 Aug 2010other▲ Good
Santos expects first-half net profit of A$180-200m, above analysts' consensus of A$152m, mainly from lower net finance costs and lower royalty-related tax. EBITDAX is in line with forecasts. Full-year guidance is maintained; results due 26 August.
4 Aug 2010drilling progress report● Neutral
Beach's July report: Santos-operated Watson West-1 is cased and suspended as a future oil producer. Coonatie-19 is to be cased as a gas producer, and Coonatie-20 is at 1,949 m. Heavy rain has suspended Coonatie drilling. Irtalie East-1 is planned for August.
3 Aug 2010director officer appointment● NeutralMajor
CFO Peter Wasow will retire at the end of 2010 after eight years in the role, staying until then or until a successor is appointed. A search has begun. The change comes as Santos works on its GLNG funding strategy.
26 July 2010drilling progress report▲ Good
Apollo reports Cuan-1 in PEL 456 (Santos farm-in) at 1,290 m with about 70 m of coal intersected, and gas flared during testing. Brawboy-2 is complete at 1,089 m, with test interpretations awaited. Early, encouraging field observations only; no final results.
22 July 2010quarterly activities report● Neutral
June quarter production was 11.9 mmboe (down 3% on March quarter), revenue A$580m (up 13%). Cooper Basin floods and a 35-day Darwin LNG shutdown weighed on output. 2010 production guidance of 49-52 mmboe held; capex guidance cut to A$2,300m on GLNG timing, production costs raised.
21 July 2010drilling scheduled● Neutral
Tap says Apache may start Zola-1 in WA-290-P (Santos 15%) as early as August, a roughly 5,000 m Carnarvon Basin well on trend with Gorgon. Tap estimates 0.2-2.0 tcf recoverable. Tap farmed out 10% to Apache in May.
19 July 2010debt financing▲ GoodMajor
Santos signed a A$2bn bilateral bank facility with tenors of four to seven years, replacing A$700m of undrawn facilities. Total funding capacity rises to A$6bn (from A$5.06bn at FY2009), helping fund GLNG and PNG LNG construction.
13 July 2010drilling result● Neutral
Pan Pacific repeats the Tap news: Apache's sole-risk Laurel-1 in TP/7 found no commercially significant hydrocarbons and was plugged. Barberry-1 in TL/2 (Santos 15%) has begun with partners not participating, but they can back in on a discovery.
13 July 2010drilling result▲ Good
Drillsearch reports Watson West-1 in the Naccowlah Block (Santos 55%) found 6-8 feet of oil pay and will be cased as a Basal Birkhead producer. Oil in place is estimated at 300,000-400,000 barrels, a small near-field discovery.
13 July 2010drilling result● Neutral
Apache's sole-risk Laurel-1 in TP/7 found no commercially significant hydrocarbons and was abandoned. Apache has begun the sole-risk Barberry-1 in TL/2 (Santos 15%), which Santos is not joining, though partners can back in on a discovery.
9 July 2010price query● NeutralMajor
Santos acknowledges media speculation about GLNG, saying it is in detailed talks with several parties on LNG sales, project equity and collaboration between projects. Nothing is agreed and there is no certainty of deals. Hints at possible partners or buyers ahead of the planned 2010 final investment decision.