Santos (STO) Share Update

Submitted by Craig Strzelecki on 25 January, 2007 - 09:52

Santos (STO) have a retained Buy/Medium (1M) share recommendation with a lower share price target of $12.30 from $12.40 from share analyst Citigroup Investment Research (CIR). The analyst has trimmed their earnings forecasts for 2006 by 3.6% to reflect the lower oil price received in 4Q06. Further, they trimmed their 2007 earnings by 1%, despite lowering production by 4%, as they reduced the level of discretionary capex and subsequent expensing through the P&L. Production Guidance Lowered from 62-63MMboe to 60-62MMboe before the sale of US assets, and to 59-61MMboe post the sale of the US assets, on lower production from the recently commissioned Maleo gas field. CIR estimates that when sold the US assets could realize around A$100-110M. The Cooper Oil Optimization program is progressing well, having drilled 108 wells during 2006, with a success rate of 79%. Of the 85 successful wells drilled, 51 wells were on line by the end of the 4Q06. A 4th rig is due in the area shortly. Two oil discoveries in Vietnam look good according to the analyst, both wells (net 37.5%) flowed light sweet crude to surface at over 5,000Bopd. The pre-drill estimate for Dua and Blackbird were 50MMbbls and 100MMbbls respectively. The Operator Premier Oil is optimistic that the project can move rapidly to the project planning phase.

Santos Limited is listed on the Australian Stock Exchange (ASX) under stock code STO. You can view their investor website here. STO was listed on the ASX on 1 October, 1954. John C Ellice-Flint is the CEO of Santos and Stephen Gerlach is the Chairman. The publicly listed company is involved in gas and petroleum exploration and the production, treatment and marketing of natural gas, crude oil, condensate, naphtha and liquid petroleum gas; transportation by pipeline of crude oil. Santos is a major Australian oil and gas exploration and production company with interests and operations in every major Australian petroleum province and in Indonesia, Papua New Guinea, Vietnam, India, Kyrgyzstan, Egypt and the United States. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade STO. Check your charts and good luck with your share trading!