From The Australian:
Oil and gas company Santos “simply must raise capital” in the face of slumping oil prices or it risks failing to break even on a cash-flow basis, says investment bank Credit Suisse.
Credit Suisse, in a research note today, said Santos needed an oil price of at least $US83 a barrel to have its cash flow break even.
…“This is truly a business built for high oil prices,” Mr Samter and Mr Hewitt said.
This is a much higher marginal cost breakeven than I’d imagined but the answer is obvious: borrow heavily, ramp the dividend then sit back and watch equity soar!
