Don't look now Santos Ltd (ASX: STO) bulls. Shares in the S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) listed oil and gas producer have fallen in seven of the last nine trading sessions as the price of crude oil continues to slide.
Santos shares are now down 42% for 2014, wiping over $6 billion from the company's market value and sitting at near 10-year lows.
As the chart below shows, Santos has far outpaced the falls felt by Woodside Petroleum Limited (ASX: WPL). This is because Woodside Petroleum has a production mix heavily weighted towards natural gas and LNG production and has benefited from a gradual lift in contracted pricing for LNG at the flagship Pluto LNG project throughout the year.
Source: Google Finance
For Santos LNG production was only 49% of total 2013 production, leaving a heavy reliance on oil prices.
This is likely to change going forward as the company's PNG LNG and GLNG significantly increase LNG production, but investors remain concerned about increasing exposure to oil-linked pricing which will drag down the returns from the capital intensive projects.
For bullish investors, Santos shares certainly could be a bargain at today's price of just $8.40, but with so much uncertainty around the future direction of oil prices the shares could fall further if the price of oil does not pull up.
