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Santos tries to calm market speculation

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Santos today attempted to end speculation that it was planning to launch an equity raising.

The Adelaide-headquartered oil and gas giant released a statement denying any equity raising was in the offing after its share price plummeted nine per cent on Friday, sparking renewed speculation in the media.

“Santos confirms that it has no current intention to undertake an equity raising,” the company said.

“Santos retains ample liquidity, with over $2 billion in cash and undrawn debt facilities currently available.”

Santos has had a torrid 12 months with the oil price plummeting and staying down, leading it shed staff and constrain capital spending.

Market analysts and media have been speculating for months that an equity raising is needed, and there was a renewed bout on the weekend.

But today, Santos said it had no plans to go down that path and restated its confidence in its underlying performance.

“Santos continues to take positive steps to strengthen the company’s operating position in the lower oil price environment,” Santos said.

“First half capital expenditure was more than 50 per cent below 2014 levels and unit production costs for the first half were 11 per cent lower.

“The underlying performance of the business remains strong. Production was up 13 per cent in the first half and continued growth is expected over the next few years, coinciding with the ramp up of GLNG.

“The GLNG project has made significant progress and remains on track for first LNG around the end of the third quarter. All upstream facilities are fully operational and good progress is being made on commissioning the LNG plant on Curtis Island.”

Shares in Santos, which reports its full year results on Friday, rose by as much as 4.5 per cent in early trade.

The stock was 14 cents, or 2.34 per cent, higher at $6.13 by 1022 AEST.

– with AAP

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