Australian energy firms hit by falling oil, commodity prices
AFP, Sydney :
Shares in Australian energy companies were hammered Tuesoday by plunging oil and commodity prices, with BHP hitting a five-year low and Santos at levels not seen for a decade.
Oil and gas companies were among the biggest losers on Australia’s benchmark S&P/ASX200 index as the energy sector shed 4.81 percent. It is down 22.24 percent over the past month.
Oil prices have fallen to fresh five-year lows, battered by OPEC’s decision last month to maintain its output levels despite a global supply glut.
This weighed heavily on the Australian market, which ended 1.68 percent in the red.
Santos, one of the nation’s largest oil and gas producers, saw its shares sink another 7.23 percent.
A credit rating downgrade by Standard and Poor’s accelerated a dramatic slide that began on November 24 and has wiped Aus$4.7 billion (US$3.87 billion) off the company’s market value.
Despite the downgrade, Santos chief financial officer Andrew Seaton said the company’s credit rating from S&P retained an investment grade.
Santos has a robust funding position, with approximately Aus$2.0 billion in cash and undrawn debt facilities available as at 30 November 2014,” he said.
IG Markets’ chief strategist Chris Weston called the oil price volatility “staggering” and said the prospects of a rally anytime soon were low.
“Santos has become the poster boy of the global energy space, given its highly committed CAPEX (capital expenditure) intentions,” he said, referring to giant projects in Australia and Papua New Guinea.
“Traders have taken an axe to the share price, courtesy of a downgrade from S&P that was always going to happen.”
Shares in Woodside Petroleum, which operates six of Australia’s seven LNG processing plants, ended the day 2.85 percent lower. Origin Energy dropped 4.76 percent while Oil Search was down 7.13 percent.
Shares in Australian energy companies were hammered Tuesoday by plunging oil and commodity prices, with BHP hitting a five-year low and Santos at levels not seen for a decade.
Oil and gas companies were among the biggest losers on Australia’s benchmark S&P/ASX200 index as the energy sector shed 4.81 percent. It is down 22.24 percent over the past month.
Oil prices have fallen to fresh five-year lows, battered by OPEC’s decision last month to maintain its output levels despite a global supply glut.
This weighed heavily on the Australian market, which ended 1.68 percent in the red.
Santos, one of the nation’s largest oil and gas producers, saw its shares sink another 7.23 percent.
A credit rating downgrade by Standard and Poor’s accelerated a dramatic slide that began on November 24 and has wiped Aus$4.7 billion (US$3.87 billion) off the company’s market value.
Despite the downgrade, Santos chief financial officer Andrew Seaton said the company’s credit rating from S&P retained an investment grade.
Santos has a robust funding position, with approximately Aus$2.0 billion in cash and undrawn debt facilities available as at 30 November 2014,” he said.
IG Markets’ chief strategist Chris Weston called the oil price volatility “staggering” and said the prospects of a rally anytime soon were low.
“Santos has become the poster boy of the global energy space, given its highly committed CAPEX (capital expenditure) intentions,” he said, referring to giant projects in Australia and Papua New Guinea.
“Traders have taken an axe to the share price, courtesy of a downgrade from S&P that was always going to happen.”
Shares in Woodside Petroleum, which operates six of Australia’s seven LNG processing plants, ended the day 2.85 percent lower. Origin Energy dropped 4.76 percent while Oil Search was down 7.13 percent.
