Santos has announced that Andrew Seaton, the Chief Financial Officer, will retire from the company at the end of 2016, after more than 11 years of service, including the last six in his current position.
Managing Director and Chief Executive Officer Kevin Gallagher in paying tribute said that Seaton has worked diligently to deliver on the strategy of the company, and his knowledge and insight, particularly over the past few months, have been invaluable for the company's transition to a new operating model, along with his enthusiasm and commitment during this period.
This does not come as a blow to the market as we have earlier seen the exit of James Baulderstone and Trevor Brown from the company’s top five executive positions; and in the recent times, Santos has demonstrated a high rate of job churn in order to achieve few objectives. Some of these have been provided below:
Consolidating the corporate and business support functions: The latest round of job cuts has commenced at the company, though it remains unclear how many workers are going to be affected.
A spokesman has confirmed that the company commenced consolidating the corporate and business support functions which resulted in some redundancies across all operations in Australia as the company continues to reduce costs and improve efficiency.
Moving towards asset-based model: At the annual meeting in Adelaide, the company announced that there are no targets on job cuts and no numbers have been put on the exercise. The key theme is to focus on a transition away from business units based on geography to a model focused on assets in order to drive long-term value for shareholders in an environment of low oil prices. In order to cope with the low prices, the company cut more than 800 jobs last year. While managing operations alongside other strategic moves, the company commenced production from the second and final liquefied natural gas train at its USD $ 18.5 billion Gladstone plant late last month.
Meanwhile, the company reported its second quarter result on July 22, 2016. The result highlights record first half production of 31.1 mmboe indicating a rise of 10% on the prior half-year while the second quarter production is of the order of 15.5 mmboe, showing a growth of 8% on the corresponding quarter of year 2015. However, the quarterly production dropped 1% from the first quarter of 2016 while quarterly sales dropped by 8%. STO further reported that average realised oil price dropped 29% to about US$43 per barrel for the first half while the average realised oil price jumped up 33% to US$49 per barrel over the first quarter of 2016. There has been a 15% drop in upstream production costs as compared to the prior half-year. GLNG produced 1 million tonnes of LNG in the second quarter and shipped 16 cargoes. The group has also changed its reporting currency to US dollars, as indicated earlier.
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2016 Guidance (Source: Company Reports)
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