It's been quite a sobering day on the ASX boards so far this Thursday. After yesterday's fresh new all-time highs, investors are taking a breather, with the S&P/ASX 200 Index (ASX: XJO) currently nursing a chunky loss of 1.2%. But let's talk about the ASX news coming out from Santos Ltd (ASX: STO) shares.
To start things off, it's worth noting that Santos shares are currently being punished even more than the broader market. The ASX 200 oil and gas producer is currently down by a hefty 1.46% at $7.74 a share.
To be fair, this isn't too different from what some other ASX energy shares are doing. Woodside Energy Group Ltd (ASX: WDS) shares have lost 1.34% so far today. Karoon Energy Ltd (ASX: KAR) is down 0.92%, while Beach Energy Ltd (ASX: BPT) has lost 0.3%.
But Santos seems to be the punching bag this Thursday. Perhaps a new announcement out of the company is responsible.
What's making ASX news today with this energy stock?
Enthusiastic Santos stakeholders may recall that last year, Santos reached an agreement with Kumul Petroleum Holdings. Kumul agreed to purchase the 2.6% stake in PNG LNG that Santos owns.
On 29 December, Santos told investors that Kumul had paid $250 million into an escrow account as a part payment for this deal. It also revealed that Kumul had secured the additional funds needed to complete this purchase by 31 January.
Well, today, the company gave investors an update. Here's what was said:
Santos and Kumul have agreed an amendment to the Sale Agreement where Kumul has taken an effective interest in the Santos entity that holds the 2.6 per cent sale interest. Kumul has paid US$352 million to Santos (equivalent to a ~1.6 per cent interest) on 31 January 2024 to allow partial completion of the transaction.
The amendment provides additional time for Kumul to pay the remaining purchase price of US$241 million. Until final completion, Santos retains control of the entity holding the 2.6% and in order to assist with purchase of the remaining interest, future project distributions associated with the interest sold to Kumul will be applied to acquiring the remaining interest
As such it seems that this deal isn't quite 'home and hosed' just yet.
Perhaps the instability, for want of a better phrase, that is revolving around this yet-to-be-completed deal is what is weighing on Santos shares today.
It's certainly possible, although, as we discussed earlier, Santos really isn't straying too far out of the broader energy ballpark when it comes to its share price losses.
Santos share price snapshot
Today's share price losses don't take too much away from what has been a rather lucrative 12 months for the company. Even after today's falls, the Santos share price remains up 9.94% over the past 12 months.
At the present levels, the company is offering a trailing dividend yield of 3.23%.
