Santos blows costs, market blows up

The Santos blowout is more about a lack of gas than a cost increase. Gaurav Sodhi investigates whether the original case to buy remains intact.

It’s become a rite of passage. Before completing vast new LNG facilities, producers announce a large increase in costs. So it is with Santos. Last week, the company said it would spend an additional US$2.5bn at its Gladstone LNG project (GLNG). Capital costs due to be spent before the 2015 completion date will increase from US$16bn to US$18.5bn, a rise of 16%.

In response, the company’s shares fell almost 10%, despite predictable management spin on events. Chief executive David Knox insists that this extra spending is not a cost increase.

{{content.question}}

{{ twilioFailed ? 'SMS Code Failed to Send…' : 'SMS Code Sent…' }}

Hi {{ user.FirstName }}

Looks like you've already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to activate your membership

We cannot send you a code via SMS to {{user.DayPhone}}

If you didn't receive SMS code please

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device


Verify your mobile number to unlock a FREE trial

Please sign up for full access

Updating information

Please wait ...

  • Mastercard
  • Visa
Mastercard

The email address you entered is registered with InvestSMART.

Please login or select "Don't know password"

Please untick this box when using a public or shared device


Register as a new member

(using a different email)

Related Articles