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CORRECTED-Santos reports A$2.7 bln loss, core profit misses forecasts

Published 19/02/2016, 02:12 pm
© Reuters.  CORRECTED-Santos reports A$2.7 bln loss, core profit misses forecasts
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(Corrects core profit to A$50 million, not A$51 million in 6th paragraph.)

MELBOURNE, Feb 19 (Reuters) - Australian oil and gas producer Santos Ltd STO.AX , which rejected a A$7.1 billion takeover last year, slid to a loss in 2015, hit by hefty writedowns, and its new boss said he was working on a strategy to shore it up against weak oil prices.

Chief Executive Kevin Gallagher, who took the helm on Feb. 1 days after the company's shares hit a 23-year low, said he was confident its assets, including stakes in liquefied natural gas (LNG) projects in Australia and Papua New Guinea, would help it deliver "stable" returns to shareholders.

"My priority now is to assess our operations and put in place the right strategy to ensure that Santos is sustainable in a low oil price environment," Gallagher said in a statement.

Santos has been slammed by collapsing oil prices that forced it to raise A$3 billion in a share sale in November to help cut debt taken on for its Gladstone LNG project, which started exporting in October.

The company reported a net loss of A$2.7 billion ($1.93 billion) for 2015, after booking A$2.8 billion in impairment charges.

Core profit before the one-off charges fell 91 percent to A$50 million, well below analysts' forecasts around A$94 million, according to Thomson Reuters I/B/E/S.

Santos shares have surged 44 percent to A$3.54 from their low in January, but the stock remains below the A$3.85 a share that investors, including Chinese private equity firm Hony Capital, paid in its share sale last November.

Hony, whose backers include state-sponsored Legend Holdings 3396.HK , Singapore's Temasek, and Abu Dhabi Investment Authority, recently increased its stake in Santos to nearly 12 percent but has not said publicly what its intentions are.

($1 = 1.3980 Australian dollars)

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