Shares in energy company Santos have shed more than a third of their value in under three weeks after further falls in oil prices and a credit rating downgrade.
The shares dropped 7.2 per cent on Tuesday, and their dramatic slide since November 24 has wiped $4.7 billion off the company's market value.
It reflects a turbulent end to the year for Santos, in which it has shelved a European capital raising venture and commenced a review of its spending plans for the coming 12 months.
Late on Monday, Standard and Poor's reduced the company's long term senior unsecured credit rating from from BBB+ to BBB.
Like the cancelled capital raising and spending review, the downgrade was caused by the pressure on Santos' earnings from falling world oil prices.
"This pressure, together with the sizeable capital expenditure committed for the completion of its GLNG project, will significantly weaken Santos' credit metrics," S&P credit analyst Craig Parker said.
The $18.5 billion Gladstone liquefied natural gas (GLNG) project is expected to begin production in the second half of calendar 2015, and will transform Santos from a predominantly domestic supplier to an exporter.
S&P said lower oil prices would reduce Santos' "internal funding buffer" for the GLNG project and increase its borrowing levels, dampening an expected recovery in its credit metrics in 2016.
Santos chief financial officer Andrew Seaton said the company's credit rating from S&P retained an investment grade.
"Santos has a robust funding position, with approximately $2 billion in cash and undrawn debt facilities available as at 30 November 2014," he said.
Santos shares dropped 60 cents to $7.70, their lowest level since December 2004.
The wider energy sector was also sold off on Tuesday, with Oil Search shares dropping 7.1 per cent and Woodside 2.85 per cent.
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