SYDNEY, Dec 8 (Reuters) - Australian oil and gas producer Santos Ltd will cut costs and put some assets up for sale as it looks to cut debt over the next three years, in a turnaround strategy announced on Thursday.
The company, which counts China’s ENN Group as its largest shareholder, has been under pressure to cut debt that peaked last year as it completed its flagship Gladstone liquefied natural gas project, just as oil and gas prices slumped.
“Santos will target a US$1.5 billion reduction in net debt to less than US$3 billion by the end of 2019 through increased operating cash flow and releasing capital through non-core asset and infrastructure sales,” the company said in a statement.
Investors had been looking for a debt-reduction strategy after the company booked a $1 billion writedown on the Gladstone LNG project in August.
Santos said the planned assets sales would allow to “simplify the business” and focus on five core natural gas projects in Australia and Papua New Guinea.
It said 2016 sales volumes were expected to be at the top end of its guidance range of 81 to 83 million barrels of oil equivalent.
Reporting by Tom Westbrook; Editing by Tom Brown