STO Santos Limited

[Daytr]

Ok whatever makes you feel better.
If I got it so wrong, how come I have made so much money out of shorting it?
Oh yeah because I was right it was going down, down, down. I made some pretty big calls on STO & Oil and they are proving right by looks.
I actually said that $6.92 was significant support on several occasions and it duly bounced, but I also said it would eventually go much, much lower & it has. I also predicted that oil was having a seasonal bounce and it was again going to revisit the lows & possibly target the low to mid 30s for WTI.
Well we aren't far off that now.
But apparently even when I get it right its wrong. Can't win with some people, only the market.
STO now touched that $4-5 range I have been talking about.
Currently down 11%!
Global equities obviously assisting with a bit of a meltdown going on.
Anyway as I said, I hope it works out for you.

You never predicted anything just made your calls after the fact. I didn't ignore what you said I just rejected it as the market noise it was/is.
I can't hold off buying stocks just in case they go cheaper, because it's not predictable.
You said it would go down to $4, it went to $9 if someone had shorted they would be killed. Then once the price was back down to $7 you started with your noise again and were correct, but 50/50 is rubbish performance.
May as well flip a coin or go to the casino, I prefer to invest.

[Joshuatree]

You guys are very entertaining ; bitching away , trying to get one up on each other, like sibling rivalry; some light relief for us. I do think averaging down on anything increases ones risk of losing.

[Daytr]

Well one person has been talking this stock up and one has been talking it down, and its well down in fact it's now has a 30% valuation of what it did only a year ago. I just get a bit annoyed when someone still wont give you credence for what were pretty big calls.
Horse to water and all that. But fair enough what's the point.
Anyway overall PSE might do ok in the long run, as I also have always said, but STO probably do need to bite the bullet on that CR.
They maybe able to muddle through, although they will be wanting a bounce in oil as being cashflow negative which I expect they are at the current poo. And any length of time that is the case is a real problem when you have a mountain of debt.

You guys are very entertaining ; bitching away , trying to get one up on each other, like sibling rivalry; some light relief for us. I do think averaging down on anything increases ones risk of losing.

[PSE]

US oil production declined in July vs June, low oil prices being the cure for low oil prices.
http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf
At present Brent Crude price STO is making maybe only 200m free cashflow once GLNG is complete, however this is an unrealistically pessimistic scenario.
STO is still a bargain, would be great to know where the bottom is on the shareprice but it is still totally unpredictable. We will only know once we have passed it and can look back.

[Daytr]

ASX200 up 3.3% STO down over 4% & now well and truly in that $4-5 range.
I'm still not feeling the love though.
North American production will be curtailed through price, but replaced by Brent imports.
Over time you would expect higher prices of poo, but it may take a wee bit of time & that's an issue for debt laden companies.

[Schrodinger]

I maybe pre-empting the bottom but oil stocks look like a great buy at the moment. Long term I expect the price to head back to $75

[Daytr]

Depends on the company Schrodinger.
Companies with little or no debt I would suggest in this environment.
Banks tend to get an itchy trigger finger when markets are chaotic and cashflow is weak on debt laden companies.
Obviously that sort price can't be ruled out & I suspect you are right if the Republicans re-gain the oval office.
Otherwise I would suggest $40-60 is more likely the new norm.

[Schrodinger]

Yes OSH looks like a more solid bet than STO due to a few factors (debt/reserves). I would expect STO to lower dividends at some stage if profitability is hit. It will be interesting to see when the USA and Saudi stop the "lets get Russia" routine and restrict supply. Long term I would expect the price to appreciate and maybe go over $100 but this could be based on the way the markets used to work (geopolitical Middle East tension=increase oil price)

[Daytr]

Funny thing is its costing them trillions if its all just about Russia. I think Russia is a red herring in all this.
Its more about trying to shut down alternatives to oil such as renewable energy & also reclaim market share.
Some commentators think we maybe heading to an era of basically free energy. i.e. the sun, wind etc.

[PSE]

Yes OSH looks like a more solid bet than STO due to a few factors (debt/reserves). I would expect STO to lower dividends at some stage if profitability is hit. It will be interesting to see when the USA and Saudi stop the "lets get Russia" routine and restrict supply. Long term I would expect the price to appreciate and maybe go over $100 but this could be based on the way the markets used to work (geopolitical Middle East tension=increase oil price)

I agree with Daytr that STO should have already cut the dividend.
The debt at STO is too high but that has driven the shareprice to a ludicrous price relative to OSH at present. The view that OSH is a 'more solid' bet than STO is fundamentally correct but when taken to extremes means that there are simply no buyers for STO.
If you think brent crude will stay below $45 for an extended period then STO will need a capital raising, not the end of the world in my view but will reduce returns.
On the other hand if the US oil production continues to decline and prices recover even modestly the returns on STO are fantastic.
The dividend is presently 30c/share but based on analyst estimates of future oil prices (as much as these can be trusted) it will increase to 60c in the next few years. At this point everyone will be able to see what an outstanding opportunity STO is at $4.96.
I bought some more today won't get any more though can't have too much in one company.
Do your own research and don't trust me please just sharing my thoughts not making a recommendation.