Santos to Raise $2.46 Billion With Share Issue, Gas Field Sale

Meanwhile the strategic review has identified $3.5 billion in capital initiatives to strengthen up the ailing gas company's balance sheet.

Santos also said it would reap $520 million from the sale of its 35 per cent interest in the Kipper gas field in the Gippsland Basin off Victoria to Mitsui E&P Australia. Oil's decline of about 40 percent over the past year is cutting revenue for gas-export projects whose contracts with Asian buyers are linked to the price of crude.

Kevin Gallagher, current CEO of Clough Limited will start with Santos in early 2016. Through an entitlement offer, Santos also plans to raise up to $2.5 billion by issuing new shares to existing investors at an offer price of $3.85 each.

"We are very confident that the steps taken today will drive better returns for shareholders by strengthening the company's financial position and underscoring the value of its high quality and diverse asset base".

"The structure of this offer enables shareholders to either buy shares at an attractive discount through the entitlement offer or sell their entitlements for value".

Speculation had been rife this morning that the embattled oil and gas explorer would unveil a sweeping overhaul of its operations sooner rather than later.

In October, Origin Energy announced a $2.5 billion capital raising and another $2.2 billion in savings measures to help cut debt and maintain its credit rating.

The capital raising comes nearly three months after Santos said it would undertake a comprehensive review of its entire business, and that chief executive David Knox would depart.

Citigroup, Deutsche Bank and UBS have opened the books on the institutional component of Santos' $2.5 billion rights issue.

"We expect inbound interest may continue and we will respond accordingly in the normal course".

The strategic review is investigating selling a few of the company's key assets to pay down its growing debt.

In the first half of 2015, the GLNG operator reported profit of AU$37 million, 82% lower than the previous first half. Sales volumes are seen between 76 mmboe and 83 mmboe.