Santos has revealed a new strategy to drive sustainable shareholder value.
Speaking at the company’s Investor Day in Sydney, Australia, Santos’ Managing Director and Chief Executive Officer (CEO), Kevin Gallagher, said that the company will implement a three-phase strategy to drive shareholder value.
This will include simplifying the business to focus on five core, long-life natural gas assets: the Cooper Basin; GLNG; PNG; Northern Australia, and Western Australia Gas. The remaining assets will be packaged and run separately for value as a standalone business.
The company also plans to progress growth opportunities across higher margin conventional assets and maximise production across operated assets.
Finally, the company plans to develop a focused exploration strategy and capability, and identify additional gas supply to drive long-term value from the five core, long-life natural gas assets.
Santos will target a US$1.5 billion reduction in net debt to less than US$3 billion by the end of 2019 through increased operating cash flow and releasing capital through non-core asset and infrastructure sales.
Mr Gallagher said: “We have reduced the free cash flow breakeven oil price to US$39/bbl, down from US$47/bbl at the start of the year.
“Capital expenditure and upstream unit production costs have been reduced by 53% and 17% respectively, headcount has been reduced by more than 500 positions, and the business has been free cash flow positive for each of the last seven months.”
Santos also announced it has appointed Bruce Clement as Vice President to run the new standalone low-cost business comprising all non-core assets.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/08122016/santos-reveals-new-strategy/