Total Share Discussion Threads

[waldron] 25/11/2015 20:14

November 25, 2015
Paris - Total has successfully placed a new debt financing of $1.2 billion through a structure combining the issue of cash-settled convertible bonds with the purchase of cash-settled call options to hedge Total's exposure to the exercise of the conversion rights under the bonds. The “synthetic” bond financing resulting from these two products has no dilution impact on the equity.

The transaction enables Total to access a new investor base and to benefit from improved financing terms compared to a senior bond issuance.

The bonds will mature on December 2, 2022, be issued at par, will bear a coupon of 0.50% and have a conversion price including a premium of 20% above the reference share price. This reference share price will be determined as the arithmetic average of Total’s daily volume weighted average share price on the Euronext Paris converted in dollars over a period of ten consecutive trading days on the Euronext Paris, commencing on November 26, 2015.

Total intends to use the net proceeds of the transaction of the bonds for general corporate purposes.

The book-runners will enter into transactions to hedge their respective positions under the call options, including transactions to be conducted during the period when the reference share price will be determined.
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[sarkasm] 03/11/2015 22:33

Is Oil In A Long-Term Bear Market?
Nov. 3, 2015 4:35 PM ET | Includes: COG, SDRL, STO, SU
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary

Statoil's CFO is of the opinion that an oil price recovery is likely in 2018. I believe there are several factors that support this opinion.

Anemic economic growth resulting in weak consumption growth and supply of oil from Iran are some near-term factors that will keep oil prices depressed.

Production decline can help close the supply/demand gap, but the supply factor will be impacted by Iran entering the markets.

Investors should avoid significantly leveraged companies in the broad energy sector.

Oil has remained at lower levels since the second half of 2014, and there are no near-term triggers that point to a recovery in oil prices. This article discusses if oil can witness a "U-shaped" recovery and the implications for the energy sector. The reason I thought of discussing this point is a recent comment from Statoil CFO that 2018 might be the year when we see a rebound in oil prices. If this holds true, the energy sector is likely to see further pain and investment strategies need to be adjusted accordingly.

I will first note the factors that can potentially take oil higher before discussing the negative triggers for the sector. My first argument is the decline in investments by top E&P companies. The chart below from an Ensco (NYSE:ESV) presentation shows that 18 large E&P companies have reduced investments by half in 2015 vs. the peak investment cycle in 2013.

This is important as reductions in investment would imply lower production growth or a decline in production and that the supply/demand gap is reduced, resulting in stabilization and upside in oil prices. The point I am trying to make is clear from EIA's short-term energy outlook summary, in which the following point is mentioned:

EIA estimates that total U.S. crude oil production declined by 120,000 barrels per day (b/d) in September compared with August. Crude oil production is forecast to decrease through mid-2016 before growth resumes late in 2016.

Therefore, lower investments have already resulted in declines in production. This is likely to support oil prices at lower levels.

When considering a relatively long-term outlook, I believe that the second factor that supports oil price upside is geopolitical tensions. In my view, the extent of crisis in the Middle East is still not reflected in oil prices. And there seems to be no indication of deescalation in conflict in the region. Even on a global basis, geopolitical tensions are rising and commodities tend to trend higher when geopolitical tensions are at a high.

Coming to the factors that can translate into lower oil prices for longer than expected, the chart below gives the global production and consumption forecast for 2015.

The key point here is that global production is increasing at a higher pace than global consumption. Even if the pace of production declines in the foreseeable future, global consumption growth will remain very anemic on sluggish economic growth.

Therefore, besides the supply factors, global demand might not remain stable or keep increasing (at least in the foreseeable future). China is unlikely to see growth revival anytime soon, and other regions are also witnessing relatively sluggish growth. While the production decline adjusts the supply factor, the demand factor declining can still result in lower oil prices.

Another factor that will come into play in late 2015 or 2016 is the supply of oil from Iran. With increasing differences between Saudi Arabia and Iran, there will be additional competition in the oil market once Iran starts supplying. Saudi Arabia has already been selling oil at a discount to customers, and Iran is also likely to sell their oil inventory at attractive rates. According to the EIA:

Of the estimated 30 million barrels held in storage, more than half is condensate, and the rest is mainly medium, sour crude oil. The volumes in storage could boost total global supply by about 100,000 barrels per day (b/d) by the end of 2015. This estimate reflects the difficulties of finding buyers for the stored condensate, although much higher volumes may be sold should Iran provide discounts to encourage purchases.

While the markets might have already discounted the Iran supply factor, it still means that increased global production will keep oil at depressed levels for longer than expected. Strong demand growth can trigger upside for oil, but that is unlikely in the next 12-24 months. I am not suggesting that the global economy will fall into recession, but anemic growth will remain in place and that will keep consumption growth muted.

From an investment perspective, my opinion is that investors need to avoid significantly leveraged stocks in the broad energy sector. Just as an example, Seadrill (NYSE:SDRL) has significant leverage and can face even more challenging times if oil remains at current levels in 2016 and 2017. Offshore drillers are expecting industry recovery in 2017 and lower oil prices can recover and impact the cash flow.

At the same time, I see several opportunities in the oil and gas sector among stocks that have sound balance sheet and quality assets. I wrote an article on Statoil (NYSE:STO) in September 2015, and I like the stock considering a three- to five-year investment horizon. Other stocks I have analyzed and would recommend for gradual exposure in the sector are Suncor Energy (NYSE:SU) and Cabot Oil & Gas (NYSE:COG). Both of these companies have strong balance sheets, with Suncor being an oil sands player and Cabot Oil & Gas having assets in Marcellus and Eagle Ford.

In conclusion, the challenges for the energy industry are likely to remain in place and investors should carefully look for opportunities amidst the challenges. I still don't recommend a big plunge in the sector, but small exposure to quality names can be considered with a long-term investment horizon.

[sarkasm] 02/11/2015 13:57

Total SA (EPA:FP) has been given a €50.50 ($55.49) price target by equities research analysts at Morgan Stanley in a research note issued to investors on Monday, MarketBeat reports. The brokerage currently has a a “buy” rating on the oil and gas exploration company’s stock.

[maywillow] 30/10/2015 16:32

BARCLAYS GIVES TARGET OF 56.50 EUROS

[maywillow] 30/10/2015 11:02

(FROM THE WALL STREET JOURNAL 10/30/15)
By Georgi Kantchev and Sarah Kent

Some of the world's largest energy companies are becoming more pessimistic about the ability of crude oil pricing to reach even $60 a barrel next year, reporting steep losses as they take hits on projects that no longer make financial sense.

A barrel of oil fetched more than $100 in June 2014, but a combination of ample supply and weaker demand has driven the international benchmark price to about $50 in the third quarter, the lowest sustained levels since the financial crisis.

Continued oversupply means that next year, Brent crude prices will average $58 a barrel and West Texas Intermediate, the U.S. oil benchmark, will average $54 a barrel, according to 13 investment banks polled by The Wall Street Journal. Many of the same banks were predicting $70 a barrel in 2016 just a few months ago.

The analysis comes as energy titans such as Royal Dutch Shell PLC and France's Total SA on Thursday reported billions of dollars in write-downs after a quarter in which oil prices fell to the lowest since the financial crisis. BP PLC earlier this week said it had revamped its business to be cash-flow positive by 2017 at $60 a barrel.

On Thursday, Brent crude settled at $48.80 a barrel while WTI ended at $46.06 a barrel.

"The reality of the day is that we don't know when and how this will balance out. We don't even know if it really stabilizes," said Ben van Beurden, Shell's CEO, on Thursday.

While U.S. shale oil production, a driving factor in the supply glut, has started to fall, heavyweight producers like Saudi Arabia and Russia are still pumping at near-record levels.

Cheap energy is forcing other producers to give up on ventures that no longer make sense with prices below $50 a barrel. On Thursday, several oil companies reported sharply lower earnings because of the price decline.

Shell posted a $6.1 billion third-quarter loss over its decision to walk away from exploring the Arctic for oil and from exploiting Canada's oil sands, which contributed to $7.9 billion in charges to earnings.

In the U.S., ConocoPhillips reported a loss of $1.1 billion and announced new plans to trim spending.

Petro China Co., the biggest oil-and-gas producer by volume in China, said its third-quarter profit fell by more than 80%. At Total, the French oil giant, the decline was 69% and partly the result of a $650 million write-down in its Canada oil-sands ventures.

Italy's Eni SpA experienced a loss of 952 million euros in the third quarter and decided to sell 12.5% of its troubled oil-field services company Saipem SpA.

Shell's about-face is among the industry's starkest. The U.K.-Dutch giant had appeared optimistic about the future direction of oil prices, moving aggressively earlier this year to buy BG Group PLC for $70 billion.

Now, Shell is looking at about $55 a barrel as the break-even price for new projects and took billions of dollars in impairment charges after lowering its long-term oil and gas price outlook.

"Prices need to stay low in order to balance the market," said Michael Wittner, global head of oil research at Societe Generale.

U.S. production has started to tail off as low prices force drillers to shut rigs and shelve costly projects.

According to the U.S. Energy Information Administration, the nation's output peaked in April at 9.6 million barrels a day and since has fallen to around 9.1 million barrels.

Other major suppliers, including the Organization of the Petroleum Exporting Countries have kept producing at a high pace. Iran, which holds 13% of the world's oil reserves, is expected to ramp up oil exports when sanctions against the country are lifted. Iran's return could add up to 500,000 barrels a day to the global oil market by the middle of 2016, analysts say.

Meantime, a string of weak economic readings in China has fueled fears about a slowdown in the world's second largest economy, which could spill over to other markets.

The extent of the crude prices' effect on the oil industry will come into sharper focus on Friday when American giants like Exxon Mobil Corp. and Chevron Corp. reveal their third-quarter earnings.

"These things take at least two years to shake off," said Michael Hulme, manager of the Carmignac Portfolio Commodities Fund, which manages $560 million.

---

Eric Sylvers and Inti Landauro contributed to this article.

[grupo guitarlumber] 25/10/2015 16:45

Oct. 29, 2015
Third Quarter 2015 Results

[maywillow] 22/10/2015 08:57

OPEC Prepares to Drop the Hammer on US Producers

Blackwell Global Investments Limited
Thu, Oct 22 2015, 05:03 GMT
by Steven Knight | Blackwell Global Investments Limited
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The crude oil price slump over the past year has been a painful experience for many producers but OPEC’s strategy might finally be paying off as the cartel appears to be on the cusp of cutting off any further growth in the US shale industry.

The Baker-Hughes rig count has been an excellent predictor of activity within the US shale oil industry and the key metric has been sliding for some time. The reality is that the current shale oil boom was largely predicated upon oil prices above the key $50.00 a barrel level. Subsequently, oil prices below that key level have incentivised well shuttering and rig stand-downs.

Although OPEC’s strategy of maintaining supply has seen some stark economic consequences, it would appear that it is impacting the US shale industry’s output. US crude oil production has been steadily declining and supply has now reached a level not seen since late 2014. In fact, the International Energy Agency has forecast that demand for OPEC crude will grow in 2015. This would potentially give OPEC exactly what they were seeking….protection of their market share.

Market Outlook

However, the price that has been paid by the OPEC member states has been heavy, given the rapidly growing budgets deficits throughout the Middle East. Several states are faced with severe economic imbalances that will need to be rapidly resolved in the coming months. Subsequently, the time is now ripe for OPEC to reduce production to restore balance and a sustainable equilibrium price within global markets.

Still, the question remains, to what extent have US producers been damaged by OPEC’s over-supply strategy. Given that it has taken over 12 months for supply to decline to pre-2015 level’s the invariable answer is…not much. Despite the tremendous global oil glut and sharply depressed crude prices, US producers have still managed to increase their efficiency and productive capacity throughout the year.

Effectively, OPEC has managed to reset supply in the markets to pre-shale oil boom levels, but the productive capacity still remains and is likely to restart as soon as WTI prices climb. Subsequently, until the global macro-economy strengthens, any price rally will likely be seen off by an increase in the rig count.

It is clear that OPEC needs to view the shale oil sector as a production operation that isn’t going away any time soon. Unless the member states are prepared for protracted economic warfare (which they are not) all they have effectively done is delay any potential loss of market share. Subsequently, depressed oil prices are here to stay unless either side blinks or they embark upon introducing an equilibrium price that is competitive for all participants.

Ultimately, OPEC might think they have dropped the hammer on US shale oil producers, but all they have done is extend the pain that is to come.

Published On Thu, Oct 22 2015, 05:07 GMT Previous entries of Market Outlook

[sarkasm] 20/10/2015 19:05

Total declares its first quarter 2015 interim dividend of 0.61 euro per share

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September 22, 2015
Paris – The Board of Directors of Total declared today a first quarter 2015 interim dividend of €0.61 per share and offered, under the conditions set by the fourth resolution at the Ordinary General Meeting of May 29, 2015, the option for shareholders to receive the first quarter 2015 interim dividend in cash or in new shares of the Company.

The share price for the new shares which will be issued as payment of the first quarter 2015 interim dividend is set by the Board of Directors at €35.63. This price is equal to the average opening price on the Euronext Paris for the twenty trading days preceding September 22, 2015, reduced by the amount of the interim dividend, with a 10% discount, rounded up to the nearest cent. This price is the minimum price set by the fourth resolution at the Ordinary General Meeting of May 29, 2015. Shares issued in this way will carry immediate dividend rights and will accordingly give the right to any distribution decided from the date they are issued. An application will be made to admit the new shares for trading on the Euronext Paris market.

The ex-dividend date for the first quarter 2015 interim dividend is set for September 28, 2015. The period for exercising the option will begin on September 28, 2015, and will end on October 12, 2015, both dates inclusive. The option may be exercised on request with authorized financial brokers.

Any shareholder who does not exercise this option within the specified time period will receive the whole of the interim dividend due to them in cash. The date for the payment in cash is set for October 21, 2015.

For shareholders who elect to receive the first quarter 2015 interim dividend in shares, the date for the delivery of shares is set for October 21, 2015. If the amount of the first quarter 2015 interim dividend for which the option of payment in shares is exercised does not correspond to a whole number of shares, the shareholder will receive the number of shares immediately below, plus a balancing cash adjustment.
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[sarkasm] 19/10/2015 18:13

TEHRAN--European oil companies are engaged in a fierce competition for the best oil and gas fields in Iran when Western sanctions are lifted, while American energy firms watch from the sidelines.

The contest has been evident this week at the first major oil-and-gas conference in Iran since world powers agreed to lift sanctions in July in exchange for curbs on the Persian Gulf nation's nuclear program.

Iran is looking for Western help to ramp its oil-and-gas industry back up after sanctions shaved more than 1 million barrels off its average daily production.

One by one, European executives got up to pitch their company's prowess. Total SA of France cited its long history of working with Iran before it left in 2010 because of sanctions. Eni SpA played a slick animated video showing off the company's deep-water drilling technologies used in Angola.

And Rainer Seele, chief executive of partially state-owned Austrian energy firm OMV, made a plea for getting his company back involved in a lucrative western gas field known as Cheshmeh Khosh, which it helped develop up until 2007.

"The competition will be very, very intense, if you see how many companies are queuing up over here in Iran," Mr. Seele told reporters after his presentation.

Meanwhile, American companies like Exxon Mobil Corp. and Chevron Corp. aren't part of the discussions--a fact underscored by their absence at this week's Iranian Petroleum and Energy Club Congress.

No American oil major has worked extensively in Iran since the 1979 revolution, and U.S. sanctions against Iran on terrorism and human rights issues will remain in effect after the lifting of nuclear-related sanctions. No U.S. oil company has had official business talks with Iran yet, and the firms say they are still unsure what kind of business they can conduct there.

Exxon Mobil Corp. said it has retained a lobbying firm to monitor the nuclear deal, although it says it isn't lobbying the U.S. government, while Chevron said the company "is continuing to review the agreement to fully understand its implications for the energy industry and the company."

The uncertainty gives European companies a head-start on U.S. firms as Iran's massive fossil fuel reserves are reopened to Western investment. Iran's resources are rare in that they are fairly cheap to develop, making them profitable even when crude prices are relatively low.

Iran's oil minister Bijan Zanganeh said Monday that technology supplied by foreign companies would play a key role in raising its output higher than its pre-sanctions levels of 4 million barrels a day, with a goal of someday hitting 5.7 million a day.

"The doors are open even to American companies," Mr. Zanganeh said Monday. But he added "they are still prohibited to invest" in Iran.

Meanwhile, European companies like Royal Dutch Shell PLC, BP PLC, and Total have sent high-level executives to Iran to speak to government officials in the past three months. Eni Chief Executive Claudio Descalzi went himself.

While European executives can't make business deals in Iran until sanctions are lifted, probably sometime early next year, they aren't forbidden from having talks with Iran. Eni kept an office open in Tehran, even after it abandoned operations there in 2011.

Iran's oil was first developed by European companies, first by BP PLC's predecessor Anglo-Persian Oil Co., and later by Shell, Total and Eni. In 2003, for example, Total produced about 50,000 barrels a day in Iran, more than any other Middle Eastern country the company worked in.

"When you go to Iran, they are Persian, they have a long memory," said Total Chief Executive Patrick Pouyanné in a September interview. "They know us very well...We are their historic partner."

One stumbling block could be Iran's system of allowing foreign involvement with their natural resources. The country's laws don't allow international companies to own Iranian oil and gas reserves. Instead, Iran gave companies contracts to develop fields, but the terms were long seen as onerous.

Iranian officials have said they are going to unveil new contracts that would last longer and allow more profit, in exchange for sharing more technology with Iranian companies. European companies say they will look into the fine print of the new contracts before jumping in--after most lost money under previous arrangements set up in the 1990s.

On Monday, some executives emphasized how willing they were to share their technology.

Stephane Michel, Total's exploration and production chief for the Middle East and North Africa, told the conference that his company was willing to share its experience in developing liquefied natural gas--something the Iranians are interested in to help them export.

Antonio Vella, chief of exploration and production at Italy's Eni SpA, said his company had already applied its innovative technologies of injecting sour gas to boost oil production in Iran--in the giant offshore South Pars field and the onshore Dakhovin reservoir.

They also had a mingled with hundreds of Iranian government and industry officials, eating a lunch of marinated chicken kebabs in a hotel ornamented with copies of ancient Persian bas-relief and the customary picture of Ruhollah Khomeini, the revolutionary ayatollah.

It is the kind of interaction in Iran that U.S. oil companies have avoided. Instead, American firms have been dusting off Iranian seismic data dating from 1970s, when they last worked in the country. Some U.S. companies are talking to contractors active in Iran or reviewing whether they can send non-American staff there, according to company officials familiar with the matter.

The uncertainty has led to some awkward exchanges, as Iranian officials increasingly turn up at functions held by big American and European companies. At a different industry conference in Europe this year, two American oil-company officials ran into a top Iranian official and had to quickly turn the conversation to merits of Persian food.

When speaking to Iranians, "we've been told to stick to weather, food and family," an American oil-company official said.

Write to Benoît Faucon at [e-mail]



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October 19, 2015 11:12 ET (15:12 GMT)

[grupo guitarlumber] 06/10/2015 07:09

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?

[waldron] 04/10/2015 21:02

World Energy Outlook 2015

WEO-2014 cover

‌(TO BE RELEASED 10 NOVEMBER 2015)

‌The precipitous fall in oil prices, continued geopolitical instability and the ongoing climate negotiations are witness to the dynamic nature of energy markets. In a time of so much uncertainty, understanding the implications of the shifting energy landscape for economic and environmental goals and for energy security is vital. The World Energy Outlook 2015 (WEO-2015) will present updated projections for the evolution of the global energy system to 2040, based on the latest data and market developments, as well as detailed insights on the prospects for fossil fuels, renewables, the power sector and energy efficiency and analysis on trends in CO2 emissions and fossil-fuel and renewable energy subsidies.

In addition, the WEO-2015 will be informed by in-depth analysis on several topical issues:

— A lower oil price future? The decline in oil prices and changed market conditions has prompted a broad debate over how and when the oil market will re-balance. This analysis will examine the implications for markets, policies, investment, the fuel mix and emissions if oil prices stay lower for longer.

— India’s energy outlook: How India’s energy sector develops over the coming decades will have profound implications both for the country’s own prospects and for the global energy system as a whole. With new impetus behind efforts to upgrade the country’s energy supply, this comprehensive, in-depth analysis will assess the multiple challenges and opportunities facing India as it develops the resources and infrastructure to meet rapidly rising energy demand.

— Renewables and energy efficiency: In the run-up to COP21, the Outlook will provide a report on the competitive position of fast-growing renewable energy technologies in different markets, how this evolves and what implications this might have for policy; the analysis also tracks for the first time the coverage of energy use by efficiency policies around the world and the ways in which product design, recycling and reuse (“material efficiency”) can contribute to energy savings.

— Unconventional gas: In addition to an update on the opportunities and challenges that face the development of unconventional gas globally, analysis will focus on the prospects for unconventional gas in China and how this might affect China’s energy outlook as well as regional and global balances.policy; the analysis also tracks for the first time the coverage of energy use by efficiency policies around the world and the ways in which product design, recycling and reuse (“material efficiency”) can contribute to energy savings.

To ‌pre-order now or find more information about WEO-2015, go to the IEA Online Bookshop.

[la forge] 03/10/2015 10:02

Iran has issued permits to France's Total and Anglo-Dutch Shell to open 200 gas stations in Tehran and other Iranian cities, Head of Iranian Society of Gas Station Owners (ISOGSO) Bijan Haj Mohammadreza said Friday.

MOSCOW (Sputnik) — According to the Iran Daily newspaper, negotiations on the issue of the specific locations of the gas stations have begun.

Up to now, all gas stations in Iran belonged to the National Iranian Oil Products Distribution Company (NIOPDC).

The situation changed after Iran and the P5+1 group of world powers — including Russia, the United States, China, France and Britain plus Germany — reached a deal in July to monitor and limit Tehran's nuclear program in exchange for the easing of international sanctions, which opened the way to increased energy and weapons sales.

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