I note that Santos reports its earnings relative to Brent not WTI. Brent has been above U.S. $60 a barrel for the last month.
If crude oil inventory drawdowns continue (not absolute but comparative) then $60 is the new floor for oil prices (not the ceiling).
I agree with what you are saying generally but my point for the last 18 months has always been that oil prices must move much higher then the $50-60 "new normal" to meet the global cost of new development. Not the 1.5% of tight oil in Texas (aka the new ghawar lol) most of our oil comes from deepwater which will soon start hitting its decline curve as the long tail of investment decisions made 4 years ago wear off.
In my view any analysis of STO should account for increased exploration/development spend and much much higher oil prices, certainly within the next two years possibly sooner. Although management wants to emphasize cashflow and EBITDAX what's really of interest is PROFIT because this is a capital intensive industry.
I know that sort of attitude is considered out of date
As a long term holder given the gas shortage I don't know that selling the east coast gas assets (kipper) was a great idea but they were under the pump and had to do something. It's water under the bridge now, the litany of poor descisions which brought us to this point.
Santos is worth more than $6.5 to a long term holder though I see that as the likely price of an offer the board would support. If it falls though and oil collapses the shareprive back to $3, no matter we still are using it just load up the truck again.
It's not unheard of for Mr Market to make big mistakes like that.
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