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(Bloomberg) — Santos Ltd., one of Australia’s largest oil and gas producers, is facing a demand from an activist investor to reverse a “reckless” strategy of capital expenditure and focus on shareholder returns.

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The company has committed to $7 billion of new growth projects since 2021 and has a further $6 billion of potential spending targeted for final investment decisions, which amounts to “by far the most aggressive upstream capex plan” in the sector, UK-based Snowcap Research said in a letter dated Thursday and sent to the Santos board.

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Major reforms are needed to boost the firm’s performance under Chief Executive Officer Kevin Gallagher’s leadership, including stronger capital discipline and new governance, according to Snowcap, which didn’t disclose the size of its holding in the Adelaide-based company.

Santos wasn’t immediately able to comment. The company climbed as much as 1.1% in Sydney trading on Thursday. Still, its shares have fallen about 3% over the past two years, even as oil and gas prices jumped. 

Australia’s energy sector has attracted a wave of attention from activist shareholders. Technology billionaire Mike Cannon-Brookes and Snowcap last year pressed for changes at utility AGL Energy Ltd., while BHP Group Ltd. eventually sold its petroleum unit and made other changes after a campaign launched in 2018 by Elliott Management Corp.

“A reformed Santos has the potential to unlock 30% to 50% of upside for shareholders,” Snowcap said in its letter.

(Updates with share price in fourth paragraph)