Australian oil and gas producer Santos Ltd said on Monday it would cut around 200 jobs, or 6 percent of its staff, as it looks for A$100 million ($73 million) in additional savings to ride out weak oil prices. Santos is in the process of a strategic review in which it is considering selling a range of assets to cut its A$8.8 billion in net debt, in a bid to to avoid selling new shares at a time when investors have already seen their stock battered.
The latest job cuts, mostly at its Adelaide headquarters, come on top of 565 jobs already shed, with the company trying to simplify its eastern Australia business, including the Cooper Basin operations that used to be its core.
Santos shares sank to a 15-year low in late September but have since rebounded 50 percent to trade at A$5.93, buoyed by an oil price rally and a takeover proposal from Woodside Petroleum for Oil Search Ltd, a partner in Santos’ prized asset, the Papua New Guinea liquefied natural gas project.
Analysts have said the A$11.7 billion bid for Oil Search, which owns a 29 percent stake in PNG LNG, implied a valuation of around A$6 billion for Santos’ 13.5 percent stake in the project. Santos, which recently started producing at another LNG project, Gladstone LNG in Queensland, is due to report September quarter production on Oct. 23.
($1 = 1.3643 Australian dollars)