Santos Ltd (ASX: STO) shares are in the red today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $6.11. In morning trade on Thursday, shares are swapping hands for $6.04 apiece, down 1.2%.
For some context, the ASX 200 is down 0.2%, while the S&P/ASX 200 Energy Index (ASX: XEJ) is down a steeper 1.3% at this same time.
Now, here's why the Aussie oil and gas company is grabbing investor attention today.
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Plunging oil price pressures Santos shares
The first reason Santos shares are under the microscope, and slipping, today is the sharp overnight fall in global oil prices.
West Texas Intermediate (WTI) oil is trading at its lowest levels since February 2021, currently fetching $US$55.27 per barrel.
The Brent crude oil price is also trading at near five-year lows, with Brent crude oil falling 2.7% overnight to US$58.92 per barrel.
As you'd expect, this isn't just throwing up headwinds for Santos. Woodside Energy Group Ltd (ASX: WDS) shares, for example, are down 1.8% today while Beach Energy Ltd (ASX: BPT) share have slipped 0.9%.
Goodbye to $363 million of debt
The second reasons Santos shares are on ASX investors' radars today is the company's early debt repayment.
This morning, Santos announced it has accelerated the final repayment under the PNG LNG project finance facility, bringing the facility to a close. Santos made its final $363 million payment six months ahead of the June 2026 repayment deadline.
Commenting on the early debt repayment, Santos CEO Kevin Gallagher said:
Final payment of the PNG LNG project financing facility strengthens Santos' balance sheet at a time when our major development projects enter production, positioning us to deliver sustainable long-term value for shareholders.
Santos has no further scheduled debt maturities in 2026.
Santos shares cashing up on divestments
Which brings us to the third reason Santos shares are grabbing ASX investor interest today.
This morning the company also reported that it has executed a conditional sale and purchase agreement to divest its 42.86% operated interest in the Mahalo Joint Venture, located in Queensland's Bowen Basin, to Comet Ridge Ltd (ASX: COI).
The divestment will see Santos receive $40 million up front with up to $20 million in contingent payments linked to production milestones.
Santos noted that it also recently completed the divestment to Eni Australia of its 42.71% interest in the Petrel fields and 100% in the Tern fields in the Bonaparte Basin offshore Northern Australia.
"I am pleased to agree commercial terms with our existing partners that will allow them to progress the development of these assets, unlocking future supply for the Australian domestic gas market," Gallagher said.
He added:
These two transactions reflect our commitment to capital discipline to deliver sustainable and competitive shareholder returns.
Santos' near-term priorities are to deliver Barossa and Pikka, and to progress the next phase of growth opportunities that leverage our existing operating footprint.
With today's intraday dip factored in, Santos shares are down 6.1% since this time last year.
