Of all the constituents currently making up the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), energy giant Santos Ltd (ASX: STO) has been one of the worst performers over the last 12 months.

Although the company’s shares have actually risen 4.5% today, they have fallen 40% since this time last year and almost 54% since they peaked at around $8 a share in May 2015. Few companies have fared worse than Santos although, unsurprisingly, most of the ones that have also operate in the energy sector.

One-year price chart; Source: ASX

One-year price chart; Source: ASX

Liquefied Natural Gas Ltd (ASX: LNG), for instance, was one of the ASX’s hottest shares in 2014, eventually hitting a high of $5. Its shares are now fetching just 47.7 cents and have fallen 87% in 12 months. Origin Energy Ltd (ASX: ORG) has also performed terribly, shedding 52.6% in that time.

Santos’ woes have come about as a result of the steep decline in oil prices, sparked by waning global demand and soaring supplies from the world’s biggest producers. Although oil prices have posted a stronger couple of months (one barrel of Brent crude is fetching US$38.46 a barrel today), they remain well below their levels of around US$110 a barrel in mid-2014, with some analysts suggesting the recent strength will prove temporary.

If the resource does experience further declines, then shareholders of Santos should expect their shares to follow on. As is the case with other commodities businesses, Santos relies on higher prices to boost its revenue in order to cover enormous operating costs.

The company reported a net loss of $2.7 billion and had more than $7.4 billion of debt on its balance sheet as at 31 December 2015, compared to $1.2 billion in cash and cash equivalents.

Indeed, Santos’ share price could also rise considerably from here if oil prices do continue to rebound, but it’s a very risky bet, and one that should be avoided by investors with a low tolerance for volatility.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.