Santos investors fume after briefings yield no answers on CFO exit

Australian Financial Review

24 October 2025

Major fund managers feel misled and kept in the dark by Santos chairman Keith Spence after private investor meetings this week provided no clarity on why the oil and gas giant’s chief financial officer, Sherry Duhe, abruptly quit after a year in the job.

Spence met with investors in Melbourne on Monday and gave no explanation of last week’s exit other than to reiterate what the company previously said – that she left to pursue other activities – according to people briefed on the discussion who requested anonymity to speak freely.

Those fund managers were surprised to see Duhe’s explanation the following day. Duhe, as first revealed by The Australian Financial Review, had told former colleagues that she could not work with Santos chief executive Kevin Gallagher and had raised issues about his leadership style. Instead of responding, she claimed, Spence told her to leave immediately.

“I gave Santos my best shot, but in the end just couldn’t reconcile my leadership style to Kevin’s,” Duhe wrote in texts to former colleagues.

While some investors who met with Spence on Monday felt he had not been transparent with them, those on Tuesday described how he had only given vague answers to questions about Duhe’s departure and about broader governance issues raised in the Financial Review’s report.

One Santos investor who met with Spence on Tuesday described him as “guarded” in the discussion about Duhe’s departure and said they still had unanswered questions and concerns. Speaking on the condition of anonymity, given the confidential nature of investor briefings, they described Duhe’s exit as “very odd”, given she was “accomplished” and capable.

Some other investors have meetings planned next week with Santos, potentially also including Spence.

A Santos spokeswoman declined to comment.

Duhe is the latest senior Santos figure to exit the company. Brett Woods quit as chief operating officer to take over as chief executive at the Stokes family-backed Beach Energy in 2023. Jane Norman, then vice-president for strategy, left that year to run Cooper Energy, now Amplitude Energy.

Duhe, who had held senior executive positions at Newcrest Mining and Woodside Energy, was considered a potential successor to Gallagher.

Among the concerns Duhe raised during her time at the country’s second-largest gas producer was a proposed shift of responsibilities from her team to chief strategy officer Tracey Winters, a close colleague of Gallagher. Those functions related to the about 20-strong “planning and portfolio” team, who carry out valuation and compliance activities in a range of areas that currently require the sign-off of the chief financial officer.

The shake-up in the top ranks of the oil and gas producer follows just weeks after the collapse of a $36.4 billion takeover bid from the Abu Dhabi National Oil Co priced at about $8.85 per share. The failure of that transaction raised questions about the future of Santos, and the meetings with fund managers had originally been intended to focus on those questions.

Some investors have suggested that Santos, which had also considered a merger with Woodside, may need to consider asset sales or a break-up if the share price does not respond to an expected 30 per cent jump in output by 2027 after the start-up of two new oil and gas projects. Santos shares hit a five-month low of $6.17 last week. They closed at $6.45 on Thursday, up 2.2 per cent over the trading session, as crude oil prices continued to rise.

Despite the turbulence in Santos’ executive ranks, some investors said they were not concerned, or were focused on other issues.

“We try to stay out of the management shake-ups and stick to operational stuff, things we can influence as opposed to this,” said Jamie Hannah, deputy head of investments and capital markets at VanEck Australia. “We don’t like seeing it, but it’s not something we try and involve ourselves.”

Ross Illingworth, the executive director at Kingfisher Capital Partners, a long-standing Santos shareholder which invests on behalf of wealthy families, said “traditional energy” companies had a bright future.

“We’re a long-term holder, and we just think this is short-term dissolvable stuff that will inevitably pass,” he said. “We believe it’s a smart way to play AI. So the short-term issues of personality clashes and management styles, they come and go, but the company’s high-quality assets don’t.”

Duhe’s exit has provided a rare glimpse into the breakdown of relationships at the top of major companies because the businesswoman unusually refused to sign a non-disclosure agreement as she left Santos.

One fund manager who is not an investor in Santos but has significant holdings in energy stocks said the situation was “a bit of a smoking gun”.

“I think most people who know her would know she’s pretty sensible, and she’s worked in a number of different resources companies and gas been effective,” they said. “This goes beyond a difference in culture – the fact that it was so acrimonious with the CEO that the chairman stepped in.”