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post Posted: Jan 19 2015, 10:39 AM
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In Reply To: Barra's post @ Jan 17 2015, 07:28 AM

So much for the big bounce. Still looks like we might have something of a double bottom on the chart.

China urban investment and retail sales for December out tomorrow could have a baring on oil prices and then we will hear what the ECB is planning. Can't help feeling the ECB is going to announce a big package since the Swiss removed their franc peg.

post Posted: Jan 17 2015, 07:28 AM
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In Reply To: nipper's post @ Jan 10 2015, 02:09 PM

Here comes the bounce ahead of ecb easing. Nth American oilers up solidly on poo rebound.
Should think sto will jump back into 8's on Monday.

post Posted: Jan 10 2015, 02:09 PM
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In Reply To: Barra's post @ Jan 10 2015, 07:35 AM


Oil bulls are a lonely bunch these days.

Why is Lafakis so optimistic? He says investors are ignoring the simple rules of Economics 101.

"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time."
- Dr John Hussman
post Posted: Jan 10 2015, 07:35 AM
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In Reply To: wolverine's post @ Jan 9 2015, 07:16 PM

Oil price slumps again overnight and STO will probably gap down a bit on Monday.

However is interesting to compare STO's sp performance against some of the majors. BP for example is trading down about
20% from where it was before the oil price imploded. Exxon is down from $104 to $92, roughly 10%.
STO has lost 50% despite being cushioned by currency changes wacko.gif .

post Posted: Jan 9 2015, 07:16 PM
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In Reply To: balance's post @ Jan 9 2015, 03:35 PM

We find Gladstone S-curve LNG and domestic gas contracts a powerful combination to lessen Santos' exposure to oil price volatility."

This ^^^^

They are still short gas for Gladstone and need to drill to secure enough but Gladstone would only damage them IF one of their buyers defaults, which seems pretty unlikely given their quality.


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post Posted: Jan 9 2015, 03:35 PM
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In Reply To: flower's post @ Jan 9 2015, 02:57 PM

G'day all, thanks for the opinions.

Morningstar are not overly concerned and see opportunity. I won't paste the report due to copyright but the last paragraph provides some reassurance.

"We have run bull and bear cases pitching Brent crude at plus and minus 25% on base case estimates. Our scenario analysis shows in all cases Santos is free cash flow is positive from 2015 and comfortably covers growing dividends. We find Gladstone S-curve LNG and domestic gas contracts a powerful combination to lessen Santos' exposure to oil price volatility."

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Share prices are only ever manipulated down.
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post Posted: Jan 9 2015, 02:57 PM
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In Reply To: Barra's post @ Jan 9 2015, 01:48 PM

However, STO are saying their sustaining production costs are $16 boe

Hi Barra, you need go no further than that. Production cost USD16. Current spot sales at either USD51 for Brent, WTI USD49.
Ok STO may have a slight problem with gas, but to intimate STO has a near terminal overall problem is sheer nonsense.

Things swing far too violently either way, oil got overbought at USD1500, if you look at a 10 year chart, oil is now oversold.

Far too much sensationalism going on, amongst those who should know better including the fourth estate--- and maybe some brokers talking their own books?

ECB comes out swinging in a couple of weeks.

Spot on, things are always darkest before the dawn.
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Combining Fundamental comments with Fundamental charts.

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post Posted: Jan 9 2015, 01:48 PM
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In Reply To: wren's post @ Jan 9 2015, 12:48 PM

Yeah you're right about the debt repayments and value of reserves if they're making a loss.

However, STO are saying their sustaining production costs are $16 boe and they have already announced they are going to cut about 700 million off previously budgeted (but non essential) capex next year. Despite the heavy cost of developing GLNG, they are what I would call a cautious company financially. Eg you don't hear about them buying out other smaller oilers at a premium or boldly spending $5 billion to buy sub economic US shale gas assets like BHP did. They also just secured a $1 billion bank facility (locally) indicating the local banks aren't seeing an imminent cash flow problem like some analysts from CS..grabbing headlines as it did.

post Posted: Jan 9 2015, 12:48 PM
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In Reply To: Barra's post @ Jan 9 2015, 12:05 PM

I'm sure what you say is correct…..have no detailed knowledge of the oil game.However,I do know that valuations of any stuff still in the ground means little if the price of the commodity falls.The company may value it at one price (usually in their books somewhere) but the Market will be much more ruthless.STO market cap halved for this reason very recently.
If STO has to renegotiate its loans when prices are down they will pay plenty for the privilege.Turnover means fa if you can't make a profit…as we PPX pref. holders know only too well!
Apart from all this,there will be money to be made trading STO….or any stock if you get it right (that's the difficult bit as we all know)

post Posted: Jan 9 2015, 12:05 PM
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In Reply To: wren's post @ Jan 9 2015, 11:10 AM

Imo oil prices would have to stay down around here for several years before Santos hit the wall and everyone seems to be forgetting that STO is well positioned in terms of its domestic gas business which will not be impacted by the current oil price rout. Local gas prices will still go to $8 gj because of the csg to LNG plants sucking up all available gas. With most of the LNG output locked into contracts with JV partners it is extremely unlikely the LNG plants will be mothballed. Further to this STO is cushioned a bit by a sinking AUD.

As for the company being worthless...they have something like 1.3 billion barrels in 2p reserves and value their producing reserves and
production infrastructure assets at $16 billion which seems reasonable given they turnover about $3.5 billion, nearly half of which is nat. gas LNG related revenue sold on forward contracts. Recent wet gas discoveries offshore W.A and results from the first well in the MacArthur shale play are worth looking into imo as they will add materially to STO's reserves when brought to maturity.
I've been buying a few in the mid 7's as I don't see oil staying in a downtrend when the ECB comes out swinging in a couple of weeks. Not intending to hold on however if the oil price keeps sinking.

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