ASX-listed Santos Ltd (ASX: STO) (STO.AX) shares leapt 8.7% higher today as the broader market, or S&P/ASX 200 (INDEXASX: XJO), trended higher.
Santos is one of Australia’s largest oil and gas companies. Founded in the 1950s, Santos owns and operates one of Australia’s largest portfolios of oil and gas fields, connected by extensive pipelines and complementary facilities like export facilities.
Trade Is Back!
Santos shares appear to have benefited from hopes of a stronger international trade environment, following the decision by the USA and China to cease further trade tariffs (for now).
Shares of rival oil and gas businesses such as Woodside Petroleum Limited (ASX: WPL) and Origin Energy Ltd (ASX: ORG) were also amongst the ASX’s best performers on Monday.
Quadrant Is On Board
Santos has also made a few announcements in recent times.
Last week, Santos announced it had completed the $US1.93 billion (net of cash) acquisition of Quadrant Energy.
“Santos has now increased its ownership and become the operator of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets with stable cash flows,” Santos CEO Kevin Gallagher said.
Finally, this morning, Santos announced the completion of drilling and first gas at the third and final well of the Bayu Undan infill, ahead of schedule and under budget. Santos owns an 11.5% interest in Bayu Undan and the Darwin LNG plant.
“The program’s success means that we have delivered higher liquids production and increased offshore well capacity,” Gallagher said.
Time To Buy Santos Shares?
Santos is a great Australian business but it’s not a business I’d be keen to buy shares in today.
Sure, its shares might look good at 14 times profit and a forward dividend yield of 1.8%. Indeed, Santos shares could well go on to beat the market, despite their recent share price sell-off.
Unfortunately, I realised many years ago that I have no business investing in oil and gas businesses because they are well outside my core areas of knowledge and experience. In other words, it’s well outside of my circle of competence.
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