The Santos Ltd (ASX: STO) share price has dropped this morning after an update from the Aussie oil and gas group.
Why is the Santos share price in focus?
The Santos share price is down 2.3% after announcing a significant sale by its largest shareholder.
ENN Group has sold 107.1 million shares or 5.14% of those on issue at $7.33 per share. The Santos share price closed at $7.76 per share on Friday with a $16.2 billion market capitalisation.
ENN’s sale received “strong support” from institutional shareholders in the oversubscribed process.
ENN reportedly remains “fully supportive” of Santos’ strategy and future direction. The infrastructure investment group also remains Santos’ largest shareholder following the sale. That includes retaining a 9.97% stake in the Aussie oil and gas producer.
The reduced shareholding does mean that a 2017 strategic relationship agreement with ENN covering board representation and other matters is no longer effective. ENN-nominated director Mr Eugene Shi will therefore resign from the board following the sale.
What else is happening for the ASX energy share?
The Santos share price began 2021 in strong fashion. Shares in the Aussie energy group have jumped 20.7% higher to $7.76 per share at Friday’s close. That translates to a 58.7% gain over the last 12 months despite volatile oil prices.
It’s worth keeping an eye on the Aussie energy group this morning for another reason.
The S&P/ASX 200 Index (ASX: XJO) was tipped to open higher this morning according to the latest SPI futures. That, combined with strengthening crude oil prices on Friday night, will make the Santos share price worth watching in early trade.
According to Bloomberg, the WTI crude oil price rose 3.5% to US$66.09 a barrel and the Brent crude oil price climbed 3.9% to US$69.36 a barrel.
The latest price surge was largely driven by OPEC holding firm with production cuts and strong US economic data.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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