Santos redeems notes
PERTH (miningweekly.com) – Oil and gas major Santos will redeem its €1-billion subordinate notes issued in 2010, in line with a strategic focus to reduce debt and costs, and on prudent capital management.
The notes to be redeemed are Santos’s most expensive debt instrument, and replacing it with more efficient long-term debt funding would reduce the company’s forecast free cash flow breakeven oil price, the ASX-listed company said on Wednesday.
Santos told shareholders that the significant business turnaround undertaken over the last 18 months towards a low-cost, high performing and reliable business, positioned the company well to redeem the notes.
“Santos has improved operational performance, cut costs and reduced 2017 forecast free cash flow breakeven to $33/barrel. The company has also undertaken prudent capital management with net debt reducing towards the target of $2-billion by the end of 2019, and oil price hedging in place for 2017 and 2018,” the company said in a statement.
Santos has some $2.2-billion in cash and $2-billion of undrawn bilateral facilities, with the company noting that the redemption of the notes would be funded from existing liquidity.
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