Santos Limited (ASX:STO) has appointed a new CEO and announced the results of a strategic review.
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Mitsui & Co. Ltd has stated that it has reached an agreement with Santos Ltd regarding the acquisition of the Santos’ 35% working interest in the Kipper gas and condensate field. It will issue new shares to Chinese private-equity giant Hony Capital at a 15% premium to Friday’s closing…
The company will sell A$2.5 billion of shares to existing holders and raise A$500 million in a separate sale to Hony Capital, a China-based private equity firm, Adelaide-based Santos said Monday in a statement.
With Santos shares frozen in a trading halt, investors can expect a lot of volatility in the weeks ahead once it resumes trading.
Eligible retail shareholders will have the opportunity to take advantage of a 1-for-1.7 accelerated pro-rata renounceable entitlement offer.
The strategic review is investigating selling a few of the company’s key assets to pay down its growing debt.
Santos’ decision follows months of investor pressure to raise capital in an effort to ride out weak oil prices, which have halved over the past year to below $US50 a barrel.
While LNG sales volumes doubled in 2015, exceeding 1 million tonne, 3Q production was 4% higher than the corresponding quarter with 14.5 MMboe.
Santos’ new chief executive will be Kevin Gallagher, now chief executive of Clough, who will aim to start with the company early in 2016.
The raisings will weather-proof the oil and gas producer against a sharp fall in energy prices, Morningstar analyst Mark Taylor said. Santos is also in the process of reducing head counts of about 200 jobs from its Eastern Australia business as part of its ongoing drive to cut costs across the firm.
‘At Clough, Mr Gallagher is widely recognised for his achievements in driving strong financial performance in the face of increasingly tough conditions for resources industry service providers, ‘ Mr Coates said.
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‘Kevin will bring fresh insight and a proven track record of achievement for shareholders from a career that spans global oil experience with Mobil, the Woodside operated North West Shelf LNG venture and most recently, as CEO of Clough since 2011’.
