Santos Negative Free Cash Flow Days Are Over
Santos's Days of Negative Free Cash Flow Are Over
According to Jarden analysts, the key message from Santos's investor day was that the days of negative free cash flow are over, as long as oil prices remain above $50 a barrel. The company can invest $2 billion annually to grow production at a compound annual rate of 4%.
Oil Prices and Cash Flow
Analyst Nik Burns notes that every $10/bbl above $50/bbl oil will generate $550-$600 million of free cash flow for Santos. The company will return at least 60% of this to shareholders.
Jarden stated, "While last-minute commissioning issues continue to plague Barossa LNG and Pikka (and we anticipate a production guidance downgrade in July), the free cash flow story is real. At $90/bbl oil price, Santos should generate a 14% free cash flow yield."
Impacted Symbols
Symbols affected by this headline and their sentiment signals
The news, analyses, and comments on this platform do not constitute investment advice. When making investment decisions, you should conduct your own research and consult with a qualified financial advisor if necessary. FiNews cannot be held responsible for any losses that may arise from the use of this information.
More Headlines
Tokyo Core Inflation Slows, Remains Below BOJ Target
Tokyo Core Inflation Slows, Remains Below BOJ Target
…Nikkei May Rise on Hopes for U.S.-Iran Peace Deal
Nikkei May Rise on Hopes for U.S.-Iran Peace Deal
…Australian Pension Fund HUB24 Faces Regulatory Scrutiny
Australian Pension Fund HUB24 Faces Regulatory Scrutiny
…