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Why the Santos Ltd share price is sinking today

Santos Ltd (ASX: STO) has been busy paying off debt, cutting costs, slashing dividends and reducing capital investment despite the price rise trend for oil. 

Santos was down 3.2% at $5.20 as the market opened on February 5 – mostly in the red due to drops in the Dow Jones and other US indices on Friday. 

Santos is a natural gas producer for Australia, Indonesia and other Asian markets with operations in oil exploration, LNG and the marketing of hydrocarbons. 

Santos released a fourth quarter activity report on January 24, highlighting its net debt reduction of US $2.7billion – down from $3.5 billion at the end of 2016. It also recorded capital expenditure of US$682 million – with total sales revenue jumping 20% to US$3.1 billion. 

The new disciplined framework will likely see a respectably-improved full-year result logged on February 21, leaving Santos in a strong position as it works to focus on growth opportunities in PNG and Narrabri, while ramping up drilling in the Cooper Basin and GLNG.

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Motley Fool contributor Carin Pickworth has no position in any of the 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.

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