Santos Ltd

STO Details
· OPEC’s decision to cut production drove the stock higher:Santos Ltd (ASX: STO) stock rose over 11.7% on December 01, 2016 as oil prices made an outstanding recovery at the back of OPEC deal wherein members, including major countries like Saudi Arabia and Iraq, decided to cut the production. This move is the first time in eight years and accordingly the oversupply of oil is expected to be controlled to a certain extent. OPEC decided to reduce oil production by 1.2 million barrels per day by January 2017.

· Started Seismic acquisition program: STO also started first part of its seismic acquisition program by acquiring over 1,000km of 2D seismic to accomplish Southern Amadeus Stage 2 farmout obligation of 1,300km. The acquisition program would finish by March 2017; and after finishing seismic works, the group would get the right to retain an increase in its participating interest from 25% to 40% for EPs 82, 105 and 112 (with EP 106 no longer applying due to voluntary relinquishment).

· Recommendation: STO stock surged over 10.1% in the last four weeks (as of November 30, 2016) and has a good dividend yield. We maintain our “Buy” recommendation on the stock at the current price of $ 4.39

Seismic acquisition program (Source: Company Reports) 

Liquefied Natural Gas Ltd

LNG Details 
· US Department of Energy’s approval to Magnolia LNG Project: Liquefied Natural Gas Ltd (ASX: LNG) stock rallied over 13.8% on December 01, 2016 as the group’s Magnolia LNG Project got authorization from US Department of Energy (DOE) to export liquefied natural gas from proposed facility in Lake Charles, Louisiana, USA to countries where US has not entered into a free trade agreement (non-FTA approval). Management reported that they are on track for final offtake milestones which would drive their efficient and low cost project into the construction and operations phases.

· Recommendation: LNG stock rallied over 9.8% (as of November 30, 2016) in the last four weeks. OPEC meeting to control production would further drive the commodity price and consequently the LNG stock. Moreover, the approval from US DOE would further drive the scope for the Magnolia LNG Project. We give a “Buy” recommendation on the stock at the current price of $ 0.70

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