Santos shares are ‘cheap’, says frustrated CEO

afr.com:

Santos chief executive Kevin Gallagher says he is “very frustrated” at how undervalued the share price is by the market as he concedes legal delays at the $5.8 billion Barossa project in the Timor Sea are a big worry for investors.

He said Santos was open to looking at “structural solutions” but emphasised that a break-up of the business did not make sense because of the negative effects of “de-scaling” the operations.

Santos chief executive Kevin Gallagher: “Nothing will drive investment away from Australia faster than this environment.” Dion Georgopoulos

The “whole” of Santos being kept intact was a better option because banks preferred to back companies with a complete suite of assets, including carbon capture operations, in the energy transition.

Mr Gallagher also railed against the uncertain regulatory environment in Australia, which he said needed to be fixed by the federal government, otherwise investment across the industry in offshore oil and gas projects would simply dry up.

“Nothing will drive investment away from Australia faster than this environment,” he said at the group’s investor day.

Mr Gallagher contrasted it with the strong backing of regulators and authorities in Alaska, and the support of local Indigenous communities, where Santos is developing the Pikka Phase 1 project, with 29 per cent of the work completed.

The company on Wednesday said its total production forecast for 2024 was between 84 million to 90 million barrels of oil equivalent, slightly lower than 2023 of 89 to 93 mmboe. This slight fall was because of the end of field life at the Bayu-Undan project in the Timor Sea, and Western Australian offshore field decline.

He said Santos was in a strong position to be one of the “winners” from