The oil price collapse hit Santos at a time when its balance sheet was at maximum stretch, and the ramifications have been transformational. A strategic review was completed in November 2015 and CEO David Knox was replaced by Kevin Gallagher in February 2016. Amongst actions to increase liquidity, a key component relevant to exploration was for future strategy to be driven by improved return on capital performance. The exploration team has been downsized and restructured and the 2016 exploration budget is down 60% year-on-year. As a result, Santos' E&A activity for 2016 has been focused on less expensive onshore and shallow water targets in Australia, Indonesia and Papua New Guinea.
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Affected by supply and demand, the economy of individual countries and technological breakthroughs, oil and gas exploration is an industry in constant motion. The high costs of finding and developing new oil and gas fields that can be commercially developed has created a challenging atmosphere, with explorers increasingly seeing low returns, low value and slow progress.
This Exploration Summary report quantifies the company's exploration volume and value performance over the past 10 years, and reviews its outlook for future success.
Businesses can use this report to get a detailed analysis of this company, what exploration areas they're involved in, what wells to watch and how well placed they are. It will help you understand company performance and shows how the best explorers have achieved their success.
Wood Mackenzie benchmarks exploration results for over 40 companies. Our analysts provide accurate information on the cost of exploration compared to the value of discoveries so that you can develop profitable strategies. We are the established global industry standard for oil and gas exploration performance.
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Company report | Nov 2016
Santos oil and gas exploration summary
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