STO (ASX) Santos IS recovering nicely

Originally posted by ftroop ↑

Santos gets leg up from SA Treasurer Tom Koutsantonis in $24m gas fund
AFR - Dec 18 2017 at 12:00 AM By Simon Evans
Santos has been given a $7 million taxpayer injection to install a heat-energy recovery system at its Moomba plant as part of a fresh round of $24 million in grants to companies including Senex, Beach Energy and Cooper Energy.
But the man behind the grants, South Australian Treasurer Tom Koutsantonis, has revealed he hasn't had any overtures from potential Santos suitor Harbour Energy.
The $24 million in funding from the state government to various companies is designed to stimulate extra gas coming on stream under a "PACE" program, and he is pushing hard to attract more companies to explore in South Australia, including in coal seam gas.
Senex has been given a $5.3 million grant for its Gemba exploration and appraisal project in the Cooper Basin in northern South Australia. Santos and Beach Energy have been granted $7 million to build a heat-energy recovery system to offset the natural gas used in running the Moomba petroleum processing plant, about 800km north of Adelaide.
Beach and Cooper Energy have been given $6.9 million for the Dombey project in the Otway Basin in the south-east of South Australia, while Rawson Oil and Gas and Vintage Energy will share in $5 million to help further the Nangwarry project in the Otway Basin.Mr Koutsantonis said 11 different companies had made applications for funding from the PACE project.
Handicap to development
But Mr Koutsantonis bemoaned the gas exploration moratoriums and bans in some other states in Australia, which he described as "reckless" and a big handicap to the vital development of new gas resources to prevent a gas shortage in Australia.
He wants to accelerate as much gas production as possible and said there was enough gas in the ground in South Australia to power the grid for hundreds of years. Queensland and South Australia currently have no restrictions on onshore oil and gas exploration and development but NSW, Victoria, WA, Tasmania and the Northern Territory have a variety of bans and moratoriums.
Mr Koutsantonis said there had not been any approach to him from any advisers or representatives from Harbour Energy, the largest United States energy investor, backed by EIG Global Energy Partners. Harbour made an indicative buyout proposal to Santos of $4.55 per share in August, but those overtures only came to light publicly in mid-November after a story in The Australian Financial Review.
There is speculation that Linda Cook, the former Shell executive who now heads Harbour Energy, was in Australia in early December for a series of meetings with potential lenders and equity investors about the prospect of a renewed tilt. The political sensitivities around any buyout of Santos are much bigger than for most companies because it is the biggest ASX-listed company in South Australia and also operates large oil and gas projects at a time when Prime Minister Malcolm Turnbull has had to dramatically intervene in the commercial operations of the gas market in Australia to stop shortages.
Defence strategy
Santos bolstered its takeover defence strategy by appointing investment bank Rothschild in late November, to work alongside Deutsche Bank. Santos shares closed on Friday at $5.02.
Mr Koutsantonis has been strident in his dislike of private equity owners because they weren't likely to be long-term owners. Soon after the Harbour Energy proposal emerged publicly, he vowed to try to protect Santos by lobbying the federal Treasurer should Harbour Energy return with a higher proposal.
EIG already has a presence in the east coast gas market, through a 12 per cent stake in Senex Energy in a deal struck in February this year where EIG also agreed to provide up to $US300 million ($394 million) of debt funding to accelerate the Western Surat coal seam gas project in Queensland. Senex gained environmental approval from Queensland authorities on December 8 to develop up to 425 wells.
A shareholder cap which prevented any one shareholder moving beyond 15 per cent of Santos was officially removed in 2008 by the South Australian government, after having been in place since 1979, when it was implemented to stop corporate raider Alan Bond seizing control of vital oil and gas assets in the north of the state.

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Politicians handing out taxpayers money with abandon again
I wonder if Mr Koutsantonis has been to Greece

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