Santos Ltd (ASX: STO) shares were out of form in November.
Following a small decline on Thursday, the energy producer's shares lost approximately 10% of their value during the month.
This means that the Santos share price is now in negative territory for the year.
Why did Santos shares tumble in November?
Investors were selling the company's shares largely due to further weakness in oil prices.
As things stand, oil prices are on course to build on October's losses and record another decline of approximately 4% for the month.
This means that the Brent crude oil price has now dropped 14% since hitting US$96.55 per barrel at the end of September. This is bad news for energy producers like Santos and Woodside Energy Group Ltd (ASX: WDS), which has also fallen ~10%, as it reduces profit margins and ultimately dividend payments.
Have its shares been oversold?
The team at Citi appear to believe that this weakness has created a buying opportunity.
A note from last week reveals that its analysts have put a buy rating and $8.25 price target on Santos' shares. This implies a potential upside of approximately 19% for investors over the next 12 months.
Commenting on its strategic review plans, the broker said:
We don't expect material value can be unlocked under a strategic review but note the breakup value of the assets based on precedents is greater than the market value for STO's equity plus control premium. Whilst Barossa is troubled, at Citi's $60 long-term oil price, we find the share price offers a free option on the project. STO is inexpensive with low $60s implied oil price; maintain Buy and lower TP to A$8.25 from A$9.00.