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Santos' Accounts Are Not "True and Fair", Oil Price Assumptions Are Too High

March 01, 2020
Bruce Robertson
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Executive Summary

Australian oil and gas producer Santos recently published their Annual Report for 2019.   In IEEFA’s opinion, the accounts contain material inaccuracies in asset values, and the resources that the company relies upon to produce profit are overstated.   The ability for investors and bankers to assess the financial situation that Santos finds itself in is impaired by over optimistic oil price assumptions. 

Santos’ Oil Price Assumptions

A History of Write-Offs

Santos has a long history of writing down its assets in its failed investment in the Coal Seam Gas (CSG) to Liquified Natural Gas (LNG) export industry. Santos invested, along with its partners, over $21bn in constructing its Gladstone LNG plants in Queensland, Australia. It also developed extensive CSG fields in Queensland to feed its export plants. The plants have never operated at full capacity. Since 2014 it has written off close to $7 billion on unconventional gas and the LNG plants at Gladstone. Its Gladstone LNG plants saw budget blow-outs and its CSG fields, also in Queensland, failed to perform as expected. 

Bruce Robertson

Energy Finance Analyst – Gas/LNG, Bruce Robertson has been an investment analyst, fund manager and professional investor for over 36 years. He has worked with Perpetual Trustees, UBS, Nippon Life Insurance and BT. He has appeared as an expert witness before a number of government enquiries into energy issues.

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