Santos names new boss amid plan to raise $2.5bn
Adelaide-based Santos has named its new chief executive as it goes into a trading halt and announced plans to raise $2.5 billion capital to reduce debt.
Santos CEO Kevin Gallagher.
The company today named Clough engineering services chief Kevin Gallagher as its next managing director and chief executive officer.
Gallagher will replace David Knox, who announced in August he was stepping down, and is expected to begin his new posting in early 2016.
Santos today announced the end of its strategic review to cut $3.5 million of net debt and its intention to raise about $2.5 billion through a fully underwritten 1 for 1.7 entitlement offer with new shares being offered at $3.85 a share.
Gallagher’s appointment follows a bumpy year for the company, which shed more than 700 jobs at its South Australian operations to cut capital expenditure and reduce production costs.
Santos executive chairman Peter Coates said Gallagher had about 25 years’ experience in managing oil and gas operations in Australia, the United States, and North and West Africa.
“He is ideally suited to lead Santos as we move from a focus on major strategic developments to delivering strong operational results in a continuing low oil price environment.
“Kevin will bring fresh insight and a proven track record of achievement for shareholders from a career that spans international oil experience with Mobil, the Woodside-operated North West Shelf LNG venture and, most recently, as CEO of Clough since 2011.”
Coates said Gallagher was widely recognised for his achievements in driving strong financial performance during increasingly tough conditions for resources industry service providers.
“I have said through the course of this year that with the major LNG project investment phase ending and the oil price outlook remaining low, Santos had to take action to become a more agile, low-cost producer delivering attractive shareholder value,” Coates said.
“The company has made good progress towards that goal through the year with a $900 million reduction in capex and circa $370 million per annum in cost savings through headcount reductions of some 770 positions, together with meaningful supply chain savings.”
“However, the strategic review which we have just completed has shown that we can further simplify the business and enhance financial discipline.”
Santos shares are to remain a trading halt until November 17.
