Santos – Buy Signal

Santos has revised the offer for the merger under which Oil Search investors would receive 0.6275 new Santos shares for each Oil Search share held, implying $4.29 per Oil Search share based on July 19 prices.

The combined entity would become an ASX top-20 company, overtaking Woodside Petroleum as the nation’s largest oil and gas producer.

Santos Merger

Santos announced it had submitted a non-binding all-scrip merger proposal to Oil Search, under which OSH shareholders would receive 0.589 STO shares for each OSH share.

Currently values OSH at around A$4.25ps.

The new entity will become the largest ASX listed oil and gas company by
market cap.

Santos – Buy

Santos is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We highlight the buying support and suggest investors keep an eye on the short-term momentum indicators for a reversal higher.

Crude Oil Continues To Slide Lower

The price of West Texas Intermediate crude oil dropped over 7% and reached a 14-month low of $50.15 in overnight trade in New York.

Yesterday’s price action extends the rout in crude oil to over 35% since posting a high of $76.90 on October 3rd.

In response, Saudi officials announced that they will attend next week’s G-20 summit in Argentina to meet with US and Russian representatives in front of the OPEC meeting on December 6th in Vienna.

Local oil names STO, OSH and WPL are all under ALGO buy signals and will stand to benefit from any indication that OPEC will cut production into 2019.

We see chart support for OSH at $7.00, STO near $5.25 and WPL in the $31.00 area.

Oil Search

Santos

Woodside Petroleum

 

 

 

 

 

 

 

 

Buy Oil Search

Our ALGO Engine generated a buy signal in Oil Search at $7.50 on October 30th.

With LNG prices firming, we recommend investors accumulate OSH shares at current levels.

OSH is our preferred value opportunity even though WPL and STO also look reasonable over the medium-term.

Oli Search

Buy Signals In Local Energy Names

West Texas Intermediate (WTI) Crude Oil price dropped 1.3% overnight to post their worst monthly performance in over two years.

The combination of trade wars, the global equity market slump and increasing oil stockpiles has raised concerns about oil demand, which pushed the WTI price 10.8% lower during October.

However, with official US sanctions on Iranian oil set to begin on November 4th, some analysts are looking for a bounce in crude oil prices.

Our ALGO engine is currently showing buy signals in the local oil names: WPL, STO and OSH.

We look for all three of this stocks to firm over the near-term with OSH reflecting the best value on a relative basis