Australian Investment Blog

ASX:STO 26/09/2018

Santos (STO) looking to ramp up production

Stock

Santos (STO) $7.24 as at 26/09/2018

Event

While the other energy names trade over 1% higher today, Santos is currently trading over -1% below yesterdays close while they hold their 2018 Investor Day. Their presentation showed plans to nearly double oil production over the next 7 years to produce around 100 million barrels a year while still keeping a lid on costs within the business. The acquisition of WA gas company Quadrant Energy, currently seeking regulatory approval, will go some way to bridging the gap by adding around 19 barrels of oil equivalent (boe), Santos also plans to leverage the core assets in Australia and PNG to ramp up output. While Santos is the lowest cost onshore producer, their targets could also make it one of the biggest in Australia. Santos (STO) Chart

Market Matters Take/Outlook

History shows that Santos has a poor track record in terms of production expansion and acquisition. Although we see some legs in this run in energy prices from here, it feels like STO is once again upscaling at the wrong point in the cycle. We’d like them to be selling strength rather than buying strength as they have announced today.

Subscribe to Market Matters Blog

Latest Reports

Morning report 10/09/2025

Portfolio Positioning: September is delivering the “wobbles” right on cue

The ASX200 slipped another 0.5% on Tuesday, extending September's retreat to 1.9% as the often weak month follows the seasonality script to a tee. Banking shares led the index fall, with heavyweight CBA worst on ground, closing down 1.3%. Gold stocks continued to shine as the market goes “all in” on a Fed rate cut next week; elsewhere, other rate-sensitive names like the retailers and tech stocks continue to outperform.

Afternoon report 09/09/2025

The Match Out: ASX pulls back on bank weakness

Weakness in the banking sector weighed on the local market today, overriding optimism from Wall Street that the Fed is poised to cut rates next week. Gold remained hot with bullion hitting new all-time highs again overnight while there were some select pockets of strength elsewhere, largely amid tech and defensives.