SHARE
Sanots CEO David Knox. Image courtesy of Santos/Youtube.

Australia-based Santos slashed its 2015 capital spending budget by 25 percent Wednesday after pulling out of a hybrid debt sale last week.

Sanots now expects to spend about $1.66 billion, down from its previous guidance of $2.24 billion.

The company said it is in a “robust” funding position with about $1.66 billion in cash and undrawn debt facilities.

Growth capital spending in 2015 is now forecast at $1.16 billion and sustaining capital expenditure is set at $497 million.

Santos said its balance sheet is strong enough to scrap the new share offering, although some analysts are concerned low oil prices and debt obligations will strain the company’s coffers.

“The company has no present need or intention to raise equity,” Knox said.

Standard & Poor’s cut the company’s credit rating on Monday to BBB with a negative outlook and warned it might issue another downgrade, Reuters said.

Santos’ shares have fallen by 50 percent during the last year.

Asset divestments are being considered but only if a “fair long term value is realized.”

The company maintained its 2015 production guidance at 57 to 64 million barrels of oil equivalent.

“To be clear, the underlying performance of our business remains strong with production continuing to grow in the second half of this year,” Knox said.