Australian LNG player, Santos, intends to exercise its option to redeem it 1 billion Euro ($1.17 billion) denominated notes issued in 2010 as it looks to further reduce debt.
The company said on Wednesday it will exercise the option on the first call date of September 22, 2017.
Santos added its business turnaround it has undertaken over the last 18 months enables the company to redeem the notes.
Santos has improved operational performance, cut costs and reduced 2017 forecast free cash flow breakeven to US$33 per barrel.
The company has also made steps in debt reduction towards the target of $2 billion by the end of 2019 and oil price hedging in place for 2017 and 2018.
Santos has ample liquidity of US$4.2 billion, comprising cash of US$2.2 billion and undrawn bilateral facilities of US$2 billion. Redemption of the Notes will be funded from existing liquidity.
The Notes to be redeemed are Santos’ most expensive debt instrument and replacing with more efficient long-term debt funding will reduce the company’s forecast free cash flow breakeven oil price.