Santos has completed its US$1.5bn acquisition of the northern Australia/Timor-Leste assets. Macquarie notes some improvement in the settlement terms.
The stock provides exposure to the ongoing recovery in oil prices and the broker is more confident in the Barossa/Darwin LNG proceeding to construction compared with the Western Australian projects.
Outperform rating maintained. Target is $5.95.
Target price is $5.95.Current Price is $5.44. Difference: $0.51 – (brackets indicate current price is over target). If STO meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).