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STO, SANTOS LIMITED
wren
post Posted: Oct 13 2014, 08:08 AM
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In Reply To: wren's post @ Oct 1 2014, 11:41 AM

Bailed out of STO a few days ago...stop hit so suffered a manageable loss.The chart of STO has deteriorated and now larger falls seem likely.As an aside...remember 'Peak Oil'? Haven't heard much on that subject of late!

 
wolverine
post Posted: Oct 1 2014, 11:48 AM
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In Reply To: wren's post @ Oct 1 2014, 11:41 AM

STO is like FGL (back in the day)...never does anything but disappoint.



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wren
post Posted: Oct 1 2014, 11:41 AM
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STO (a stock which seems to always disappoint this trader) is now into an area of significant support.Bought a few at $13.52

 
balance
post Posted: Aug 22 2014, 12:22 PM
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In Reply To: wolverine's post @ Aug 22 2014, 12:08 PM

Good result and some gas / condensate to ice the cake there Wolv. I'm no oil or gas whizz but Lasseter looks like good news. Anyone have a comment?



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wolverine
post Posted: Aug 22 2014, 12:08 PM
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wtf STO is up?!?!?! biggrin.gif



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nipper
post Posted: Jul 4 2014, 10:23 AM
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In Reply To: wolverine's post @ Jun 30 2014, 10:08 PM

Last week analysts and investors were invited by Santos (STO) to Queensland for a two-day site tour of the company's Gladstone LNG development, taking in the Fairview upstream gas operations onshore and the LNG processing facility on Curtis Island. First sales from GLNG draw ever closer but at this stage 13,052.7200management is still not being any more specific than to suggest "in 201
Last week analysts and investors were invited by Santos (STO) to Queensland for a two-day site tour of the company's Gladstone LNG development, taking in the Fairview upstream gas operations onshore and the LNG processing facility on Curtis Island. First sales from GLNG draw ever closer but at this stage management is still not being any more specific than to suggest "in 2015".

Management is guiding to first gas at least arriving on the island for processing by the December quarter this year, leading Deutsche Bank to assume first LNG in "mid-2015". UBS is being more conservative with a September quarter assumption.

Brokers are in little doubt the achievement of first gas sales will represent a significant milestone that will lead to a re-rating of Santos as the non-believers finally convert. At this stage management insists the timeline remains unchanged as does the current budget. But as to what the true value of Santos stock should be going forward, that's where things become a little more difficult.

The first issue is one of sufficient gas. Not to fire up the first train, but to justify a second and perhaps third train as is hoped for a facility that has taken years and billions to get to this point. The Fairview well site continues to exceed expectations, analysts note, such that comfort around the size and deliverability of what accounts for almost half of GLNG's gas resource base is growing. But Macquarie, for one, expects production at Fairview to peak in 2020, and a three-train GLNG is a longer-dated proposition.

The jury is still out on the nearby Roma and Arcadia resources, and Macquarie suggests up to 30% of GLNG resource will need to be sourced from third party suppliers outside the GLNG joint venture, which includes Petronas, Total and Kogas. Deutsche Bank goes as far as to suggest 50%. To that end, Santos has its eye firmly set on Arrow Energy's Surat Basin gas but is not alone, and no breakthrough there appears imminent at this stage.

Macquarie is comforted train one development is on time and capex budget, but suggests the growth capex required from 2016-20 to ramp up a second train blows out the budget by 44% to US$26.6bn.

Santos did for the first time provide some guidance on capex from 2016, but as all analysts agree, it is difficult to have any deal of confidence in such numbers at this stage. Not because management is kidding itself, although the long journey to train one gas has been beset with cost overruns, but because there are just too many unknowns out there in future.

Indeed, Credit Suisse notes that if one is to assume a pessimistic bear case on the one hand, and an optimistic bull case on the other, the valuation spread that falls out the back of the model is "large". Wide as Gladstone Harbour, one would imagine, when one inputs variables for the cost price of source gas, the sales price of seaborne LNG, the currency, construction, equipment and labour, the extent of global LNG demand, the extent of global LNG supply…one could go on. Credit Suisse sums it by despairingly asking "How do we value the residual 2800 picojoules [of gas] needed to run the plant for 20 years?"

It no longer matters what has happened in the past, Credit Suisse suggests, alluding to cost overruns and source gas issues. It is all about what the economic value will ultimately be versus current expectations (ie the current Santos share price). To that end, the analysts still see "meaningful risk of the bear case eventuating" and until the share price is trading at a level which takes such risk into account, which they declare to be something below $12 at this stage, their Underperform rating remains.

By contrast, the UBS analysts have returned from Queensland and upgraded Santos to Buyleast arriving on the island for processing by the December quarter this year, leading Deutsche Bank to assume first LNG in "mid-2015". UBS is being more conservative with a September quarter assumption.
Brokers are in little doubt the achievement of first gas sales will represent a significant milestone that will lead to a re-rating of Santos as the non-believers finally convert. At this stage management insists the timeline remains unchanged as does the current budget. But as to what the true value of Santos stock should be going forward, that's where things become a little more diffic
The first issue is one of sufficient gas. Not to fire up the first train, but to justify a second and perhaps third train as is hoped for a facility that has taken years and billions to get to this point. The Fairview well site continues to exceed expectations, analysts note, such that comfort around the size and deliverability of what accounts for almost half of GLNG's gas resource base is growing. But Macquarie, for one, expects production at Fairview to peak in 2020, and a three-train GLNG is a longer-dated proposition.
The jury is still out on the nearby Roma and Arcadia resources, and Macquarie suggests up to 30% of GLNG resource will need to be sourced from third party suppliers outside the GLNG joint venture, which includes Petronas, Total and Kogas. Deutsche Bank goes as far as to suggest 50%. To that end, Santos has its eye firmly set on Arrow Energy's Surat Basin gas but is not alone, and no breakthrough there appears imminent at
Macquarie is comforted train one development is on time and capex budget, but suggests the growth capex required from 2016-20 to ramp up a second train blows out the budget by 44% to US$26.6bn.



Santos did for the first time provide some guidance on capex from 2016, but as all analysts agree, it is difficult to have any deal of confidence in such numbers at this stage. Not because management is kidding itself, although the long journey to train one gas has been beset with cost overruns, but because there are just too many unknowns out there in future.



Indeed, Credit Suisse notes that if one is to assume a pessimistic bear case on the one hand, and an optimistic bull case on the other, the valuation spread that falls out the back of the model is "large". Wide as Gladstone Harbour, one would imagine, when one inputs variables for the cost price of source gas, the sales price of seaborne LNG, the currency, construction, equipment and labour, the extent of global LNG demand, the extent of global LNG supply…one could go on. Credit Suisse sums it by despairingly asking "How do we value the residual 2800 picojoules [of gas] needed to run the plant f
It no longer matters what has happened in the past, Credit Suisse suggests, alluding to cost overruns and source gas issues. It is all about what the economic value will ultimately be versus current expectations (ie the current Santos share price). To that end, the analysts still see "meaningful risk of the bear case eventuating" and until the share price is trading at a level which takes such risk into account, which they declare to be something below $12 at this stage, their Underperform rating remains.



By contrast, the UBS analysts have returned from Queensland and upgraded Santos to Buy.



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- Dr John Hussman

Said 'Thanks' for this post: wolverine  Barra  
 


wolverine
post Posted: Jun 30 2014, 10:08 PM
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from MS


Santos: GLNG Site Tour
Santos held a two day analyst site tour at its GLNG project in Queensland which we attended. Day 1 was spent viewing upstream operations at Fairview including the Hub 4 compressor station and wells. Day 2 was spent at Curtis Island viewing the GLNG plant including trains 1 & 2, tanks A & B, the flare and jetty. Overall, Santos claim 80% completion, with Train-1 start-up in 2015 (our guess second half) with Train-2 six to nine months later. In conclusion, the GLNG project is making significant headway. The construction phase of the Downstream portion of the project appears on track although the true test will be gas flowing through the system. The Upstream portion of the project is coming together although significant well variability adds to uncertainty in regards to well performance and number of wells required over time impacting maintenance capex. The project is clearly short gas and the JV has positioned for this by entering into third party supply agreements. In regards to the downstream portion 82 modules on train 1 are set, with work continuing on integrating the infrastructure. Train-2 construction (which has a later start-up date) is behind Train-1 with 11 of 29 modules set. The LNG tanks and jetty are nearing completion with hydrostatic testing of the first LNG tank planned in July. Activity on the upstream portion of the project is concentrated on constructing the compressor stations and associated infrastructure, along with the drilling and completion of wells and gathering systems. It was interesting to see well variability that is being achieved in terms of production rates – some wells in Fairview are producing as much as 20mmscf/d while others are doing less than 1mmscf/d. We do note that Roma wells are producing at much lower rates. Well variability in relation to production and well decline adds to uncertainty regarding future upstream capex costs (both from an upside and downside perspective).



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wolverine
post Posted: May 5 2014, 07:19 PM
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In Reply To: batikit's post @ May 5 2014, 11:16 AM

Looking pretty positive, there is a small fight going on between execution risk on GLNG and the early success of PNG.

Either way I am pretty well set on STO in all accounts.



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batikit
post Posted: May 5 2014, 11:16 AM
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In Reply To: wolverine's post @ Apr 17 2014, 08:40 PM

breaking out now...


Said 'Thanks' for this post: arty  
 
wolverine
post Posted: Apr 17 2014, 08:40 PM
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from MS


Santos: Production disappoints
Quick Comment: STO’s production was 12.2 mmboe in Q1 2014 versus 13.1 mmboe in Q4 2013 (MS estimate 12.5 mmboe). Sales revenue was also lower at A$913m in Q1 2014 versus A$1,065m in Q4 2013 and our expectation of A$1069m. Despite oil prices averaging A$128/bbl, oil production was sharply lower, down 15% in Q1 versus Q4. Santos have maintained all guidance, but in our view outcomes are likely to be near the low end. GLNG is 80% complete. 35 wells were spudded in the quarter with Fairview continuing to exceed expectations and Roma in-line with expectations. The gas transmission pipeline is on track for completion in Q2 2014 and on Curtis Island, all train-1 modules have been delivered. The budget guidance remains unchanged. The PNG LNG project is over 95% complete with first LNG cargoes expected by the middle of year. In exploration news, STO made a gas discovery at Mt Kitty-1 in the Amadeus Basin (evaluation is ongoing). The Vanuatu-1 oil prospect in the Carnarvon Basin was unsuccessful. STO is currently drilling the Lasseter-1 gas prospect in the Browse Basin as a follow-up to its large Crown discovery in 2013. Shale gas activities in the Cooper Basin are progressing but technical challenges are evident which is consistent with those presented by Beach Energy. The Langmuir-1 (vertical well) flowed at 1.5mmscf/d and then encountered problems suppressing flow. The fracture stimulation of Van der Waals-1 was suspended during the quarter for operational reasons after two fracs with the Roswell-2 horizontal shale well flowing at 0.75 mmscf/d. We remain Equal-weight. Production declines from existing assets were worse than we had modeled and we have lowered our estimates. Construction activities at GLNG look good but questions remain around reserves for this project.



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