Total Share Discussion Threads

[adrian j boris] 11/12/2018 12:14

Total SA (FP.FR) on Tuesday laid out a series of environmental commitments as it embarks on a controversial drilling campaign off the French Guiana coast that has drawn condemnation from advocacy groups.

The French oil major plans to drill a final exploration well on the Guyane Maritime license to determine whether it is viable to extract oil from the site. Total drilled five wells on the license between 2011 and 2013.

Environmental activist groups say the drill site's proximity to coral reefs threatens the habitat of marine life and the livelihood of local communities. In June protesters from Greenpeace abseiled into Total's annual general meeting to protest against plans to drill in the area.

Total said it is aware the operation would raise questions and pledged to act with transparency and minimize any environmental risk.

The company dismissed concerns of any potential damage to coral reefs, saying the drill site is 30 kilometers from the nearest reef, which is not coral.

"Total obviously does not conduct drilling operations in coral reefs," the company said.

The company said it will report on the progress of its work via a dedicated monitoring committee led by Guianese authorities.

Total also invited representatives from nongovernmental organizations to visit its installations and inspect the precautionary measures in place.



Write to Nathan Allen at [e-mail]



(END) Dow Jones Newswires

December 11, 2018 06:55 ET (11:55 GMT)

[waldron] 10/12/2018 16:55

Total
47.34 -1.71%


Engie
11.99 -1.11%

Orange
14.495 -1.13%


FTSE 100
6,721.54 -0.83%
Dow Jones
23,953.7 -1.78%
CAC 40
4,742.38 -1.47%


Brent Crude Oil NYMEX 60.90 -1.25%
Gasoline NYMEX 1.45 -2.67%
Natural Gas NYMEX 4.51 +0.56%

WTI - 10/12 17:43:07
51.54 USD -1.66%


BP
509.1 -1.11%


Shell A
2,317 -1.09%


Shell B
2,327 -1.61%

[grupo] 10/12/2018 09:45

How Alberta's Radical Actions Impact ConocoPhillips And Total
Dec. 10, 2018 4:36 AM ET |
About: ConocoPhillips (COP), TOT
Callum Turcan
Callum Turcan
Oil & gas, long-term horizon, Growth, Deep Value
LinkedIn Profile
(4,042 followers)
Summary

Alberta's Premier Rachel Notley has big plans to bring the WCS-WTI differential down so oil producers in the province can get better realizations.

Why this matters to ConocoPhillips and Total S.A.

Overview of the 50/50 Surmont joint-venture in Alberta.

Ever since the discount Western Canadian Select trades at relative to West Texas Intermediate blew out (due to regional oil production outpacing Alberta's pipeline and crude-by-rail takeaway capacity), touching $50/barrel at one point, oil sands players in Alberta have been getting crushed. Radical action taken by Alberta's provincial government led by Premier Rachael Notley is the latest and most promising attempt to bring that differential down to manageable levels. The goal is to boost the realizations Albertan producers get for their oil sales. ConocoPhillips (NYSE:COP) and Total S.A. (NYSE:TOT) are 50/50 partners at the Surmont joint-venture in the oil sands patch, making recent events quite material to their global operations. Let's dig in.
Overview of Surmont

Back in 1997, ConocoPhillips embarked on a pilot project at the Surmont site which sought to prove steam assisted gravity drainage technology (abbreviated SAGD) was a viable way to extract enormous volumes of bitumen resources out of Alberta.

Steam assisted gravity drainage developments seek to commercialize viscous bitumen resources by injecting steam into the ground which in turn increases the temperature of the bitumen, thus enabling those volumes to flow to a production well. As those are heavy sour oil barrels, meaning crude with a high sulfur content and a low API rating, these supplies are sold largely at prices based on the Western Canadian Benchmark.

A small SAGD facility was constructed to support operations at the two wells drilled at the site in 1997, which was followed up by a third well in 2000. The test was a success, but there was still a lot more work to be done before Conoco could proceed with full-scale development. 3D seismic mapping activities in 1998 helped ConocoPhillips get a better idea of how to design its first commercial SAGD project.

The French oil major Total bought into the Surmont project back in 2002 and increased its stake in the joint-venture up to 50% in 2005. As things stand today, ConocoPhillips and Total each own 50% of the Surmont JV.

As an aside, the facilities constructed during the pilot project have been offline since 2016 and the Surmont JV has no intention of restarting operations. Decommissioning and land reclamation activities are expected to start in 2020.
Developing the asset

Development activities at the Surmont 1 facility started up in 2003, with steam injection activities commencing in 2007. By October 2007, the Surmont 1 facility had reached first-oil. The Surmont 1 facility was a relatively small endeavor with just 27,000 bpd in gross production capacity at the time. In early-2010, the Surmont 2 development was sanctioned.

Originally, the Surmont 2 development was expected to boost the venture's oil production capacity up to 110,000 bpd gross, but operational improvements and debottlenecking endeavors have since increased that target up to 150,000 bpd gross. The JV completed the Surmont 2 project in September 2015, but at the time noted it would take a while to ramp up production to peak capacity.

Updates on the exact amount the Surmont facility is producing are usually only given on an annual basis. ConocoPhillips indirectly updates investors on its net quarterly Surmont production, but that doesn't give you gross output due to that figure (most likely) factoring out royalties.

In Total's 2017 20-F filing, the company stated the Surmont facility produced 135,000 bpd gross that year. ConocoPhillips' Q3 2018 10-Q filing notes that production from the Surmont facility increased during the first three quarters of 2018 versus the same period last year as new wells were drilled at the site, implying the Surmont facility is now operating close to its peak capacity.
Government intervention

It is important to keep all of this in mind in light of recent actions from Alberta's provincial government. The government is requiring oil producers that produce over 10,000 bpd in the province to cut output by 8.7% (for a total reduction of 325,000 bpd industry-wide), a move that will impact 25 companies. That reduction will remain in place for three months as the industry waits for storage drawdowns to bring inventory levels in line with historical averages (we'll see how that turns out).

After Q1 2019, the cut will be reduced to just 95,000 bpd as the market waits for Enbridge, Inc.'s (NYSE:ENB) Line 3 Replacement Program to add additional pipeline takeaway capacity to the region by year's-end. When completed, the revamped pipeline will once again be able to operate at its peak capacity of 760,000 bpd. On a net basis, that will add 370,000 bpd of pipeline takeaway capacity to Alberta. However, keep in mind that oil sands pipeline developments are notorious for getting delayed.

The idea here is that Alberta's oil production will be brought down to levels where regional production matches pipeline takeaway capacity. The large oil production cut in Q1 2019 combined with existing crude-by-rail takeaway capacity and the end of refinery turnarounds are expected to remove "excess" oil in storage (which in theory will reduce the WCS-WTI discount).

As this plays out, the government will order additional rail cars to provide a more permanent fix to the massive discount Albertan crude fetches relative to American benchmarks. As of this writing, the futures curve indicates that investors expect the WCS-WTI differential to drop from $40/barrel in January 2019 to $28/barrel by December 2019. Note that other crude types in Alberta are also selling at a large discount to American benchmarks.

Once significant levels of crude-by-rail transportation capacity have been established, the WCS-WTI differential in theory should move down towards ~$20/barrel. This differential takes into account the cost of shipping crude-by-rail down to the US Gulf Coast, where there is ample heavy sour oil refining capacity, and the conventional quality discount (heavy sour oil supplies generally trade at a discount to light sweet crude types, but that premium on a global level has been shrinking).

The pace at which the WCS-WTI differential goes down is subject to various factors including when the Line 3 pipeline will be able to operate at its peak capacity, how soon significant crude-by-rail takeaway capacity can be deployed, will Albertan oil producers actually end up removing 325,000 bpd off the market, and who will be financing the rail car purchases.

ConocoPhillips and Total will probably end up having to modestly curtail production at their Surmont facility. Any negative impact of marginally lower bitumen sales will more than offset by sharply higher realizations. In its Q3 2018 supplemental, Conoco notes that WCS has traded $22/barrel below WTI during the first nine months of 2018 (before the most recent blowout in Q4). This is primarily why the JV's bitumen realizations came in at just $26.46/barrel over that period. At a certain point, oil sands operators will start posting negative operating cash flow as cash operating expenses outstrip revenue due to lackluster bitumen realizations (this has happened in the past and may come into play in Q4 2018 and parts of 2019).
Final thoughts

Since the Surmont 2 development was completed a few years back, ConocoPhillips and Total S.A. haven't said much about their joint-venture. There are ongoing activities to reduce to the steam-to-oil ratio through operational improvements, which in theory could save the JV a ton on operating expenses if successful. At one point, the JV was considering the Surmont 3 project, but it is highly unlikely that will ever get sanctioned.

If Alberta's provincial government, the federal government of Canada, and the upstream oil sands industry can collectively work together to knock Alberta's pricing differentials down to reasonable levels, then that's what we call a win-win-win. ConocoPhillips and Total S.A. would receive a very nice uplift in their operating cash flow generation if this strategy is successful. Thanks for reading.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[la forge] 09/12/2018 16:33

Analysis of the 07/12/2018 | 12:39
Opinion: Positive above 47.5 EUR
Course objective: 51 EUR
Stop protection: 46.3 EUR

While the title Total is currently returning to its recent low points, in the area of ​​47.5 EUR, we take advantage of this zone of course to strengthen the infinite turbo call Societe Generale S179S to 1.59 EUR.
This derivative was advised last month at EUR 2.29.

We will now aim for a return to the EUR 51 zone, the 50-day moving average crossing point and the theoretical invalidation threshold will be lowered to EUR 46.3.
The gain potential is thus 50% for this derivative product and the risk of 24%.

[waldron] 07/12/2018 17:00

Total
48.165 +1.65%


Engie
12.125 +0.37%

Orange
14.66 +0.86%


FTSE 100
6,789.74 +1.28%
Dow Jones
24,545.28 -1.61%
CAC 40
4,813.13 +0.68%


Brent Crude Oil NYMEX 62.82 +4.60%
Gasoline NYMEX 1.50 +4.61%
Natural Gas NYMEX 4.49 +3.84%


WTI (WTI)
- 07/12 17:48:49
53.71 USD +4.33%



BP
514.8 +2.28%


Shell A
2,342.5 +2.97%


Shell B
2,365 +2.76%

[waldron] 06/12/2018 17:01

Total
47.385 -2.91%


Engie
12.08 -2.30%

Orange
14.535 -1.72%

FTSE 100
6,704.05 -3.15%
Dow Jones
24,340.54 -2.74%
CAC 40
4,780.46 -3.32%


Brent Crude Oil NYMEX 59.41 -3.49%
Gasoline NYMEX 1.41 -2.75%
Natural Gas NYMEX 4.34 -3.00%


WTI (WTI)
- 06/12 17:49:27
50.84 USD -3.46%



BP
503.3 -4.50%


Shell A
2,275 -4.45%


Shell B
2,301.5 -4.54%


WHAT A GREY DAY

[waldron] 05/12/2018 16:58

Total
48.805 -1.39%


Engie
12.365 +0.12%

Orange
14.79 +0.41%

FTSE 100
6,921.84 -1.44%
Dow Jones
25,027.07 -3.10%
CAC 40
4,944.37 -1.36%



WTI (WTI)
- 05/12 17:45:45
53.41 USD +1.19%


Brent Crude Oil NYMEX 62.32 +0.39%
Gasoline NYMEX 1.46 +1.25%
Natural Gas NYMEX 4.49 +0.74%



BP
527 -1.86%

Shell A
2,381 -1.45%


Shell B
2,411 -2.07%

[waldron] 05/12/2018 11:40

12/18 2018
Ex-Dividend date for the 2nd 2018 interim Dividend

[ariane] 05/12/2018 09:24

Eco Atlantic Oil & Gas Ltd. (EOG.V) said Wednesday that the company and its partners have approved an initial drilling plan for the Orinduik Block offshore Guyana next year.

The oil-and-gas company said partners Total E&P Activities Petrolieres and Tullow Guyana BV--subsidiaries of Total SA (FP.FR) and Tullow Oil PLC (TLW.LN) respectively--have agreed to drill the first exploration well on the block's Jethro-Lobe prospect in late May or early June.

The net cost of the first well is estimated at $7.6 million, Eco Atlantic said.

The company said it is fully funded for the 2019 campaign and has over $20 million in cash.



Write to Oliver Griffin at [e-mail]; @OliGGriffin



(END) Dow Jones Newswires

December 05, 2018 03:43 ET (08:43 GMT)

[waldron] 04/12/2018 16:58

Total
49.495 -0.64%


Engie
12.35 -1.59%

Orange
14.73 -1.64%

WTI
- 04/12 17:44:33
53.05 USD -0.34%


Brent Crude Oil NYMEX 62.21 +0.84%
Gasoline NYMEX 1.45 +1.52%
Natural Gas NYMEX 4.52 +4.26%



FTSE 100
7,022.76 -0.56%
Dow Jones
25,628.49 -0.77%
CAC 40
5,012.66 -0.82%



BP
537 +0.94%


Shell A
2,416 +0.02%


Shell B
2,462 +0.06%

[waldron] 03/12/2018 16:56

Total
49.815 +1.32%


Engie
12.55 +1.05%

Orange
14.975 -1.22%


FTSE 100
7,062.41 +1.18%
Dow Jones
25,747.24 +0.82%
CAC 40
5,053.98 +1.00%


Brent Crude Oil NYMEX 60.76 +2.19%
Gasoline NYMEX 1.43 +1.65%
Natural Gas NYMEX 4.36 -5.55%


WTI 52.1400 -0.33%



BP
532 +2.31%


Shell A
2,415.5 +1.92%

Shell B
2,460.5 +2.71%

[maywillow] 03/12/2018 09:46

Total SA (FP.FR) said Monday that its joint venture with South Korea's Hanwha Corp. (000880.SE) plans to invest almost $500 million in expanding its Daesan refining and petrochemical complex.

The planned investment by Hanwha Total Petrochemical, a 50-50 joint venture between the French company and Hanwha--one of South Korea's largest industrial conglomerates--will increase polypropylene capacity by nearly 60% to 1.1 million tonnes annually by the end of 2020.

Ethylene capacity will also increase by 10% to 1.5 million tonnes, Total said.

"This polypropylene project complements our offering of high-value-added polymers to the fast-growing Asian market," said Bernard Pinatel, president of refining & chemicals at Total.

The new investment comes on top of $750 million in ongoing investments aimed at increasing ethylene production capacity at the site by 30% to 1.4 million tonnes a year by the middle of next year, and boosting polyethylene production capacity by 50% to 1.1 million tonnes by the end of 2019, Total said.

"All these investments are designed to take advantage of competitively priced propane feedstock, which is abundantly available due to the shale gas revolution in the United States," the company said.



Write to Max Bernhard at [e-mail]; @mxbernhard



(END) Dow Jones Newswires

December 03, 2018 02:58 ET (07:58 GMT)

[waldron] 30/11/2018 16:58

Brent Crude Oil NYMEX 59.37 -0.90%
Gasoline NYMEX 1.43 -0.23%
Natural Gas NYMEX 4.53 -2.48%

- 30/11 17:44:53
WTI 50.97 USD -0.82%


Total
49.165 +1.50%


Engie
12.42 -0.56%

Orange
15.16 +0.93%

FTSE 100
6,980.24 -0.83%
Dow Jones
25,302.33 -0.14%
CAC 40
5,003.92 -0.05%








BP
520 -0.40%


Shell A
2,370 -0.08%


Shell B
2,395.5 -0.79%

[waldron] 29/11/2018 16:58

Total
48.44 +0.40%


Engie
12.49 -0.60%

Orange
15.02 +0.43%

FTSE 100
7,038.95 +0.49%
Dow Jones
25,284.05 -0.32%
CAC 40
5,006.25 +0.46%


Brent Crude Oil NYMEX 60.37 +2.17%
Gasoline NYMEX 1.43 +3.89%
Natural Gas NYMEX 4.49 -4.36%



BP
522.1 -0.29%


Shell A
2,372 +1.07%


Shell B
2,414.5 +1.32%

[ariane] 29/11/2018 15:43

Total in Norway gas find
Norway

OSLO, November 29, 2018 – Total has struck gas offshore Norway, the Norwegian Petroleum Directorate announced on Wednesday.

Well 6406/6-6 S proved a “reservoir in Jurassic deposits,” the directorate said as it approved the drilling of a sidetrack on the well intended to better evaluate the find.

Total operates the licence with a 40% interest, alongside partners Equinor and Petoro (30% each).

[waldron] 29/11/2018 08:12

BP Plc: JP Morgan remains overweight but reduces its target FROM 650 to 575 GBp.



Compagnie Financière Richemont: RBC reduces its target from 100 to 85 CHF, while remaining outperform


ENI: JP Morgan remains overweight but reduces its target FROM 16 to 13.50 euros.


Equinor: JP Morgan goes from neutral to underweight with a reduced target FROM 230 to 190 NOK.


Royal Dutch: JP Morgan remains overweight but reduced its target by 3,250 to 2,800 GBp.

Total: JP Morgan goes from underweight to neutral despite a target reduced from 54 to 49 EUR.

[waldron] 29/11/2018 08:03

Analysis of the 28/11/2018 | 5:06 p.m.
Opinion: Positive above 47.6 EUR
Course objective: 52 EUR
Stop protection: 46.6 EUR

The Total share benefits from relatively solid fundamentals and returns to interesting entry courses.
According to the Surperformance © ratings, the company presents an interesting fundamental situation in a trading logic. It has a good compromise between its valuation and the visibility offered by its activity. On the other hand, the brokers have recently revised up their earnings estimates and now expect a profit of 3.34 USD per share for the current year.

The Total share reaches oversold territory as it approaches a significant level around 47.6 EUR. This situation confirms the possible implementation of a technical rebound of the title. Thus, prices could regain strength and move towards the next resistance at EUR 50.25 or EUR 52 in the longer term.

In a trading perspective, we can take advantage of the proximity and the relevance of the level currently tested to return to the purchase on the title Total with good timing. We will be able to position ourselves on the infinite turbo call Societe Generale M438S which currently stands at 1.98 EUR for a financing level of 40.41 EUR and a deactivating barrier at 41.972 EUR. The realization of our scenario would achieve respective gains of 25% and 48%. The theoretical invalidation threshold initially set at 46.6 EUR will limit the risk to 21%.



We track the proposed products and write a new recommendation for the exit of the line (except in case of deactivation). As such, the objectives and thresholds of invalidation are given for informational purposes and may change depending on market conditions and our convictions.
Mnemo Type Strike Barrier Deadline
M438S CALL 40.41 41.972 -
PUBLICITY
inRead invented by Teads
Course Obj. theoretical theoretical risk
1.98 48% -21%
>> Find all our recommendations derived products
Total: Expected technical rebound

[waldron] 28/11/2018 17:38

Total
48.245 +0.45%


Engie
12.565 -0.83%

Orange
14.955 -0.30%

FTSE 100
7,004.52 -0.18%
Dow Jones
25,176.54 +1.73%
CAC 40
4,983.24 +0.00%



BP
523.6 -0.13%


Shell A
2,347 -0.21%


Shell B
2,383 -0.04%


Brent Crude Oil NYMEX 60.55 +0.25%
Gasoline NYMEX 1.41 +0.73%
Natural Gas NYMEX 4.41 +2.82%

[the grumpy old men] 27/11/2018 18:28

Total Withdraws From South Pars Field - Potential Implications
Nov. 27, 2018 11:43 AM ET|
2 comments
|
About: TOTAL S.A. (TOT)
Power Hedge
Power Hedge
Macro, energy, alternative energy, contrarian
Marketplace
Energy Profits in Dividends
(4,759 followers)
Summary

Total will be withdrawing from its position as operator of the massive South Pars field in Iran.

Due to the size of the company's holdings in the field, this could potentially result in the company losing an enormous amount of money.

Depending on how the situation is resolved, Total could lose billions and see its forward revenues reduced by the loss of the field's production.

There are amicable ways that this could be resolved that will not be as painful for the company's investors.

It may be best to avoid buying shares in Total until we know for sure what the resolution will be.

Looking for a community to discuss ideas with? Energy Profits in Dividends features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »

Earlier today, CNBC reported that Chinese state-owned oil giant CNPC has replaced French supermajor Total S.A. (TOT) in the South Pars gas field project. The reported reason for this is that Total failed to obtain a waiver from the economic sanctions that the United States has imposed on Iran. CNPC, of course, needs no such waiver as China has not imposed any sanctions of its own against the Middle Eastern nation (nor will it). Ultimately, this will prove to be a major lost opportunity for Total given the size and scope of the South Pars project.
About The South Pars Gas Field

The South Pars/North Dome gas field is a natural gas condensate field located in the Persian Gulf.

The field is by far the largest in the world, containing an estimated 1.8 quadrillion cubic feet of in-situ natural gas and approximately fifty billion barrels of natural gas condensates. This is almost the same amount as every other known natural gas field in the world combined. The sheer resource potential of this field alone should make Total's recent move somewhat disheartening.

With that said though, only part of the field is in Iranian territorial waters. The resources found in the South Pars (Iranian) section are estimated at only 500 trillion cubic feet of natural gas in place, 360 trillion of which is technically recoverable with today's technology and prices. The remainder of the resources belong to Qatar, which is on somewhat better terms with the Western powers. While the Iranian portion may be the smaller portion of the overall field, it still accounts for 5.6% of the world's proven natural gas reserves.

Although the South Pars field was actually discovered in 1990, production did not actually begin until phase 2 was commissioned in 2002 with a production target of one billion cubic feet per day. Since that time, multiple additional phases have been completed and brought online with the latest phase being phase 11. Each of these phases increases production by about one billion cubic feet per day and each requires total capital expenditures of around $1.5 billion. Clearly then, the development of this field over the years has been a truly massive undertaking.
Total and South Pars

Total's presence in the South Pars project represents an enormous commitment for it as the company owns 50.1% of the field. When we consider the sheer size of the field and its production, we can see that the South Pars field accounts for a not insignificant portion of the company's total reserves as well as production. The complete loss of these things is certainly something that we do not want to see.

As a general rule, the company with the largest ownership stake in a given field is called the "operator" of the field and is responsible for the development of it. In the case of the South Pars field, this is currently Total. Total however stepped down from its operatorship of the field with this announcement. Therefore, CNPC has replaced Total in this role and has now become responsible for the development of the field.

What we do not know at this time however is the item that is of the greatest concern for investors. That is the fate of Total's ownership stake in the field and its production. In a worst case scenario, the Iranian government will choose to retaliate against the United States and its allies for the economic sanctions by confiscating the company's ownership stake. This would effectively result in the company losing billions of dollars from the lost reserves, the lost revenue from the field's current production, and the value of all of the assets that it has already deployed at the field. This action would certainly cause the company's stock price to plummet.

I personally view this move as rather unlikely, though. The European Union was generally opposed to the re-imposition of sanctions against Iran and I somewhat doubt that the Iranian government truly wants to escalate the sanctions and alienate the European Union by confiscating the assets of one of its companies. It is in Iran's best interest long-term to appear to be an honorable partner to do business with.

There is also the question of whether the sanctions that have been levied on Iran even permit Total to have such a large stake in Iran's largest gas field. If they do not, Total may be forced to sell its stake in the field, most likely to either CNPC or the National Iranian Oil Company. This move would still have the result of having a noticeably negative impact on Total's production and reserves and most likely cause the stock price to drop, but at least the company would get some money out of the deal. As Total would be desperate to sell however, it is quite likely that the company would end up selling at a price that is well below what the stake in the field is actually worth. This sale would thus still result in a loss of value for the company's investors, although the loss would not be as severe as if the nation's government confiscated the assets.

The final possible outcome of this is by far the best for the company and its investors. This is that the company retains its ownership position and stake in the field's production. Thus, the only thing that would change is that Total would no longer be responsible for executing the development project. This seems unlikely to be the final outcome here though as it seems that the reason why Total is running into conflict with the sanctions is that the company is responsible for funding its proportionate share of the development. It is highly unlikely that the company's partners would be okay with it retaining the rights to 50% of the production without providing half of the money to get that production. Then again, I discussed in a previous article that the European Union has been working on a way for its companies to get around the sanctions so it is possible that Total could be able to get around the sanctions by providing its share of the funding through this method.

We might also see a case where Total keeps its existing stake in the first ten phases but sacrifices its interest in any subsequent ones. This would have the result of the company's production from the field remaining relatively static at the present level and Total simply losing all production growth from the field's future development. This is likely a very acceptable scenario for shareholders as it would prevent the company from delivering a large loss of value from this development.
Valuation

As we can see, the best case scenario effectively makes Total remain as it is, without really anything changing in its valuation. If this is the scenario that plays out, the stock looks undervalued at today's level. According to Zacks Investment Research, the company is expected to grow its earnings per share at a 12.50% rate over the next three to five years. This gives the stock a PEG ratio of 0.79 at the current price.

As we just discussed though, it seems quite likely that Total will suffer a loss, possibly a very large one, as a result of this development. As we do not have any idea how large the loss will be at this time, we have great difficult to value the company for the time being. It may be best to avoid taking a position in the stock until we have more visibility into just how this will ultimately play out.
Conclusion

In conclusion, the fact that Total may potentially suffer a very large loss as a result of the re-imposition of sanctions on Iran is certainly not something that we want to see. It is still quite difficult to know how this situation will resolve itself though so it does not seem to be time to panic just yet. At the same time, we have no idea how large of a loss the company may incur as a result of this development is it is likely best to avoid acquiring a new position or increasing a current one until we have more information about how the situation with the South Pars field will play out.

At Energy Profits in Dividends, we seek to generate a 7%+ income yield by investing in a portfolio of energy stocks while minimizing our risk of principal loss. By subscribing, you will get access to our best ideas earlier than they are released to the general public (and many of them are not released at all) as well as far more in-depth research than we make available to everybody. We are currently offering a two-week free trial for the service, so check us out!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this

[waldron] 27/11/2018 17:35

Total
48.03 -0.56%


Engie
12.67 +1.85%

Orange
15 +0.74%

FTSE 100
7,016.85 -0.27%
Dow Jones
24,594.47 -0.19%
CAC 40
4,983.15 -0.24%



Brent Crude Oil NYMEX 59.02 -2.41%
Gasoline NYMEX 1.38 -2.81%
Natural Gas NYMEX 4.28 -0.49%



BP
524.3 -0.10%


Shell A
2,352 -0.49%


Shell B
2,384 -0.67%

[la forge] 27/11/2018 14:37

27 November 2018
News
Eni and Total to expand search for oil and gas offshore Cyprus
By Talal Husseini
Share

Oil and gas giants Total and Eni have announced a joint bid to explore offshore oil and gas opportunities in block 7 offshore Cyprus, despite warnings from Turkey over claims to the area.

The Cypriot energy ministry said in a statement: “An application was received on November 26, as part of the procedure for a Hydrocarbon Exploration Licence for block 7, by Total/Eni

“In the coming days, the application will be examined by the advisory committee, which will prepare an introductory report for the Minister for Energy. Subsequently, the minister will present a proposal to the Council of Ministers, where the relevant decisions will be taken.”

Back in October, the Cypriot Government invited Total, Eni and ExxonMobil to bid for the unclaimed block situated within Cyprus’s exclusive economic zone (EEZ).

In response, the Turkish Government urged companies “to act with common sense and to duly consider the realities on the ground”.

According to Turkey, block 7 is disputed as it “remains within the outer limits of Turkey’s continental shelf in the Eastern Mediterranean”. The country vowed to take all necessary measures to ensure its rights to the block are protected by forbidding exploration activities.

The decision by Cyprus was made after Eni, operator of block 6 with a 50% interest, found a major discovery. Total owns the remaining 50% of block 6.

Earlier in November, ExxonMobil began exploration tests near the island despite warnings from Turkey’s President Recep Tayyip Erdogan that foreign companies should not “overstep the mark” by drilling in disputed waters. ExxonMobil received affirmation from the Cypriot Energy Minister George Lakkotrypis that the government will support exploratory activities in the EEZ.

US oil and gas company Noble Energy first discovered natural gas offshore Cyprus in 2011. A nearby discovery in Egypt’s Zohr field in 2015 has indicated that Cypriot waters could have the same prospects.