Total Share Discussion Threads

[waldron] 19/2/2019 17:05

FTSE 100
7,179.17 -0.56%
Dow Jones
25,878.88 -0.02%
CAC 40
5,160.52 -0.16%

Brent Crude Oil NYMEX 66.14 -0.54%
Gasoline NYMEX 1.73 -0.14%
Natural Gas NYMEX 2.64 +0.38%

WTI - 19/02 17:51:58
55.95 USD +0.16%

Eni
15.198 +0.14%

Total
49.51 +0.00%

Engie
14.085 +0.07%

Orange
13.655 +0.44%

BP
536.8 -0.22%


Shell A
2,411 -0.14%


Shell B
2,422.5 -0.10%

[la forge] 18/2/2019 20:52

PARIS (Agefi-Dow Jones) - Total announced Monday the creation of an industrial consortium with the Danish Orsted and the Belgian Elicio to respond to the call for tenders for the construction of an offshore wind farm. from Dunkirk.


This is Total's first project in offshore wind power. "Our recognized expertise in offshore oil and gas, combined with expertise across the offshore wind energy value chain of the world leader in the sector, Orsted, as well as that of Elicio, an experienced developer qualified from the outset of the call for tenders, are the keys to the success of a safe and competitive project, "said Philippe Sauquet, General Manager of Total's Gas, Renewables & Power business.


The call for tenders, launched in 2016 by the French State, has entered its last phase. It puts in competition a dozen international consortia, in particular EDF associated with the German Innogy, Engie and the Portuguese EDPR, or the Shell oil company with Quadrans Energies Marines.


Candidates have until March 15th to submit their projects. The choice of the winner will take place in the second quarter of 2019. The commissioning of the park, with an estimated capacity of 500 megawatts, is scheduled for 2022.


-Francois Schott, Agefi-Dow Jones; 01 41 27 47 92; [e-mail] ed:


-Agefi-Dow Jones; [phone]; [e-mail] ed: ECH

[waldron] 18/2/2019 18:12

FTSE 100
7,219.47 -0.24%
Dow Jones
25,883.25 CLOSED
CAC 40
5,168.54 +0.30%


Brent Crude Oil NYMEX 66.50 +0.38%
Gasoline NYMEX 1.74 -0.17%
Natural Gas NYMEX 2.63 +0.19%

WTI (WTI)
- 18/02 18:59:12
56.04 USD +0.29%

Eni
15.176 +0.37%


Total
49.51 -0.37%


Engie
14.075 -0.32%

Orange
13.595 +1.27%


BP
538 -1.01%

Shell A
2,414.5 -0.39%

Shell B
2,425 -0.76%

[the grumpy old men] 18/2/2019 16:33

LONDON--French energy giant Total SA (FP.FR) said Monday that it has joined a consortium to bid for its first offshore wind tender.

Total said it is partnering with Danish renewable energy company Orsted A/S and Belgian renewables producer Elicio NV to submit a joint bid for the Dunkirk offshore wind farm project, which has capacity of up to 600 megawatts.

"Total's participation in this offshore wind bid is in line with our strategy to develop low-carbon electricity business in Europe," Philippe Sauquet, president for gas, renewables and power at Total, said in a statement.



Write to Christopher Alessi at [e-mail]



(END) Dow Jones Newswires

February 18, 2019 10:53 ET (15:53 GMT)

[ariane] 18/2/2019 12:06

SPDC is the operator of a Joint Venture involving NNPC, which holds 55%; Shell 30%; Total Exploration and Production Nigeria Limited (TEPNG)10%; and Nigeria Agip Oil Company Limited (NAOC) 5%.

[ariane] 18/2/2019 11:56

Total SA (FP.FR) said Monday that it acquired Synova, a French plastics recycling company focused on the automotive sector.

The deal will enable Total to combine its polymers know-how with Synova's recycling expertise, increasing the supply of recycled polypropylene available for automotive applications as a result, the French energy major said.

Synova produces 20,000 tonnes of polypropylene annually from recycled plastics, Total said.

The financial details of the transaction were not disclosed.



Write to Patrick Costello at [e-mail].



(END) Dow Jones Newswires

February 18, 2019 05:43 ET (10:43 GMT)

[adrian j boris] 18/2/2019 11:25

Total forms consortium to acquire French wind project

Written by David McPhee - 18/02/2019 9:39 am

The Total SA logo is seen at a Total oil refinery in Spergau, Germany, Friday, March 31, 2006. Photographer: Jochen Eckel/Bloomberg News
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French oil giant Total has announced it will form a consortium with offshore wind developer Orsted to submit a bid for a Dunkirk offshore wind project.

The industrial consortium will also feature renewable energy producer Elicio, a firm preselected by the French Energy Regulatory Commission.

The Dunkirk windfarm has a generation capacity of 600 megawatts (MW).

Philippe Sauquet, president gas, renewables and power at Total, said: “Total’s participation in this offshore wind bid is in line with our strategy to develop low-carbon electricity business in Europe.
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“Our recognized offshore oil and gas know-how combined with Orsted market-leading expertise across the offshore wind energy value chain, as well as that of Elicio, an experienced developer qualified from the beginning of the bid, provide a solid foundation for success of a safe and competitive project.”

Last month, Danish wind giant Orsted announced it saw healthy £700 million profit growth in Q4 2018.

The wind developer released results showing £1.7 billion pre-tax profit in Q4 2018, compared to £1bn in Q4 2017.

The Danish wind firm commissioned a number of high profile UK projects last year, including Race Bank and Walney Extension, the world’s largest offshore wind farm.

It also announced last week that it was generating electricity from its giant Hornsea development.

Martin Neubert, chief executive officer of Orsted Offshore, said: “Offshore wind can contribute significantly to France’s renewable energy targets.

“As the world-leading offshore wind developer, we bring an unparalleled track-record in developing, constructing and operating offshore wind farms to the consortium, and the combined competencies of Ørsted, Total and Elicio are ideal to help France unleash its significant potential for developing clean power from offshore wind.”

[waldron] 17/2/2019 17:49

Feb 17, 2019, 10:44am
Oil Prices Are Poised To Move Higher Into April
Great Speculations
Bill Sarubbi
Contributor


Oil is poised to run higher to late April but is likely to first pull back later in this coming week.

Oil had been unusually weak in view of the rising cycles. Price came within 10 cents of breaking the former January 25th low on the 11th but then rallied more than 8% in a week.

Price reached $55.66 which is significant. This is the 38.2% retracement level of the October-December decline. The passing of this barrier will confirm that the situation has changed and that the prior decline is over. The $65 area appears to be a reasonable target by April.



Price is about to exceed the 38.2% retracement level.Cycles Research Investments LLC





These bullish factors remain in force:

Seasonally, oil is entering the most bullish part of any year
The monthly cycle points up
Oil was down from late September through late December. When this has occurred in the past, price has been higher three months later (March) in 17 of 21 cases and has been higher four months later in 18 of 22 cases (April). In other words, if oil sells off in the fourth quarter, the seasonal tendency to rally in March-April is enhanced.

[la forge] 16/2/2019 12:58

5 questions: Total's Adewale Fayemi on Brulpadda – and hitting the ground running
59 minutes ago Khulekani Magubane, Fin24
Adewale Fayemi, General Manager Total Exploration

Adewale Fayemi, General Manager Total Exploration and Production South Africa (Total (Supplied))
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When Total announced during the 2019 Mining Indaba that it had found offshore gas deposits at its Brulpadda prospects in the Outeniqua basin, some 175km off the coast of South Africa, everyone in attendance knew that it was a big deal.

But while political parties have welcomed the development, a great deal of work still lies ahead in making the most of the find. The results of the future wells to be drilled would determine and define the extent of a future development plan.

Fin24 spoke to Total’s General Manager Total Exploration and Production in South Africa, Adewale Fayemi, for more insight.

Subscribe to Fin24's newsletter here

Fin24: When does Total plan on starting operations to extract these condensate gas deposits?

AF: Operations to extract these gas condensate deposits is contingent on a number of activities. As disclosed in the press release, Total and its partners plan to acquire 3D seismic this year, followed by up to four exploration wells on this license.

It will be only after all these activities have been completed and an appraisal is done that a field development plan will be agreed between the partners, and proposed to the authorities for approval.

Fin24: What is the estimated value of the deposit found in this area?

AF: It is very important to note that the well was drilled successfully, the existence of a petroleum province offshore South Africa is confirmed, and a lot of data as well as core and fluid samples have been obtained which are currently being analysed and interpreted.

The findings will provide a better understanding of the Brulpadda prospect and enable us to quantify the volume of the discovery.

Fin24: What is the potential for job creation with this find and the related operations?

AF: We have a commitment to the furtherance of the objectives of Section 2(D) and 2 (F) of the Mineral and Petroleum Resources Development Act (MPRDA) 2002, which seek to substantially and meaningfully expand opportunities for Historically Disadvantaged South Africans (HDSAs), including women, to enter the petroleum industry and benefit from the exploitation of the nation’s petroleum resources on the one hand, and to promote and advance the social and economic welfare of all South Africans.

Total's plan is to attain these objectives through training and skills development of HDSAs; giving preference in procurement to manufactured or produced in South Africa equipment, materials, and instruments; making use of HDSA contractors whose services and standards are competitive with those outside South Africa; employing HDSAs that meet required qualifications and experience and also implementing a programme for the future recruitment of HDSAs.

READ: Total offshore find fits with Operation Phakisa, says Cabinet

Fin24: Has Total received any message of concern for potential environmental impact as a result of this discovery and related exploration? How has Total responded?

Total prides itself in the robust approach to environmental protection and the core principle of ‘no net loss’.

Safety is a core value of the company and no operation is undertaken if it cannot be done safely. Total will engage and take interested parties through its procedures and mitigation measures in the very unlikely event of an incident.

Fin24: Since oil and gas exploration has been removed from the Mining Charter and separate laws for the sub-sector are set to be released after the May elections, how confident is Total in securing licensing to continue beyond exploration wells?

AF: Oil and gas exploration has been removed from the Mineral and Petroleum Resources Development Act (MPRDA) 2002, with the intention of providing separate legislation for the industry. Total is confident in the South African legislative process that this legislation will be passed and timely.

[waldron] 15/2/2019 16:58

FTSE 100
7,236.68 +0.55%
Dow Jones
25,762.26 +1.27%
CAC 40
5,153.19 +1.79%


Brent Crude Oil NYMEX 65.82 +1.94%
Gasoline NYMEX 1.72 +2.32%
Natural Gas NYMEX 2.59 +0.70%

WTI (WTI)
- 15/02 17:46:36
55.42 USD +1.59%

Eni
15.12 +2.30%


Total
49.695 +1.45%

Engie
14.12 +0.57%

Orange
13.425 +1.74%


BP
543.5 +0.48%


Shell A
2,424 -0.12%


Shell B
2,443.5 -0.67%

[grupo] 15/2/2019 14:02

French oil major Total plans to move its trading operations to Geneva from London in September, affecting 200 jobs or 10% of its U.K. staff. The company says the move isn't related to Brexit, although it comes as a number of multinationals relocate operations out of the U.K. ahead of the country's exit from the EU. -Sky News

[grupo] 15/2/2019 12:32

Oil giants are competing to buy battery companies
By Akshat Rathi15 minutes ago

For an undisclosed sum, oil giant Shell today announced that it bought German home energy-storage startup Sonnen. This follows a $70 million investment into the firm by the oil group’s venture arm last year.

Founded in 2010, Sonnen says it has installed 40,000 battery packs in homes around the world (paywall). Since it started, the cost of these units have fallen by as much as 80%, thanks to the declining prices of lithium-ion battery manufacturing.

Shell’s acquisition boosts Sonnen’s ability to compete with the likes of Tesla, Samsung, and LG in in Europe, the US, and Australia, all markets where rooftop solar installations are increasingly popular. With a big enough battery pack to store solar power, some homes don’t have to pay for electricity at all.

Sonnen has an edge over Tesla in one crucial way. It uses lithium-iron-phosphate batteries, which are known to be cheaper and longer lasting than the nickel-cobalt-manganese batteries that Tesla uses for both electric cars and home energy-storage systems.

Regardless, the household energy-storage market hasn’t grown as fast as many expected. The upfront costs of these systems remain high, which has led Sonnen to explore alternate business models. In 2018, the company received permission from German network operator TenneT to link tens of thousands of home-battery systems as part of a “virtual power plant.” That means, in theory, Sonnen can operate a group of these batteries together like a power plant, balancing the network when there’s a surge in demand. The consumers who opt in to Sonnen’s program receive cash for the grid services their home batteries provide. The company is also experimenting with blockchain technology to manage energy trades between households.

“We’re not trying to replicate what others have done in the past—we want to offer customers what they want going forward,” Brian Davis of Shell told Green Tech Media. “In some sense, we’re trying to create the utility of the future.” Shell’s “new energy” division already acts as a kind of utility, and it could deploy Sonnen’s batteries to enhance its services.

Previously, Shell has also acquired Greenlots and New Motion, electric-car charging companies in the US and Europe, respectively. Sonnen also says that it has developed its own technology for electric-car charging, which will now become part of Shell’s growing portfolio in this area.

Though we think of oil as a commodity, it is fundamentally stored energy. In that sense, big oil companies’ interest in batteries isn’t surprising. In May last year, BP invested in StoreDot, an Israeli startup with electric-car batteries that it says can charge in less than five minutes. In 2016, Total bought battery company Saft for $1.1 billion.

[grupo] 14/2/2019 19:16

Total: Production Growth Drives Solid Results
Feb. 14, 2019 2:00 PM ET
|
About: TOTAL S.A. (TOT)
Power Hedge
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Macro, energy, alternative energy, contrarian
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Energy Profits in Dividends
(5,464 followers)
Summary

Total saw improvement in its financial numbers due to a combination of higher oil prices and rising production.

The company achieved record production as it brought several large projects to a production state over the quarter.

One of the biggest projects is Yamal LNG, which makes Total a major player in this emerging sector of the energy industry.

The company's renewables operation delivered mixed results, but it is likely to be a growth engine going forward.

Investors should be reasonably pleased with these results.

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On Thursday, February 7, 2019, French oil and gas supermajor Total S.A. (TOT) announced its fourth-quarter 2018 earnings results. At first glance, the results looked to be decent, although the shares did decline somewhat in the pre-market trading session that accompanied the earnings report. There were definitely some good things in this report, including record production. The company benefited from the fact that oil prices were somewhat higher in the fourth quarter of this year compared to last year, although they were down somewhat compared to the third quarter. Nevertheless, these were solid results and show the company continuing to execute quite well on its ambitions.

As my long-time readers are no doubt well aware, it is my usual practice to share the highlights from a company's earnings report before delving into an analysis of its results. This is because these highlights provide a background for the remainder of the article as well as serve as a framework for the resultant analysis. Therefore, here are the highlights from Total's fourth-quarter 2018 earnings results:

The company reported total sales of $52.495 billion in the fourth quarter of 2018. This represents a 10.86% increase over the $47.351 billion that it had in the fourth quarter of 2017.
Operating cash flow was $10.640 billion in the quarter. This compares favorably to the $8.615 billion in the year-ago quarter.
Total had an average hydrocarbon production level of 2.876 million barrels of oil equivalents per day during the quarter. This was a new record level for the company and certainly exceeded the 2.613 million boe/day that it averaged a year ago.
Over the course of the year, Total initiated production activities at Ichthys in Australia, Yamal LNG in Russia, Kaombo North in Angola, and Egina in Nigeria.
Consolidated net income was $1.180 billion in the fourth quarter of 2018. This represents a 61.64% increase over the $730 million in the fourth quarter of 2017.

The first thing that anyone reviewing these highlights is likely to notice is that essentially every measure of financial performance improved compared to the year-ago quarter. As is often the case with oil companies, one of the largest contributing factors to this is the fact that oil prices were higher in the most recent quarter than they were previously. In the quarter, the average price for a barrel of Brent crude was $68.80. This compares to $61.20 a year ago, but as anyone that follows the market can likely guess, it was lower than the levels that we saw over much of 2018:

Source: Total S.A.

It should be relatively easy to see how the company's top-line would increase year-over-year if the amount of money that it can get for a unit of production increased. If all else remains equal, then these higher revenues will result in more money making its way down to the bottom line.

We also saw though that Total managed to grow its production fairly significantly over the past year. As mentioned in the highlights, the company produced an average of 2.876 MMboe/day in the quarter compared to 2.613 MMboe/day a year ago. This also had the effect of boosting its top line because it had more product to sell. Thus, the combination of higher prices and higher production boosted Total's revenues and earnings compared to the prior-year quarter.

The majority of this production growth came from a handful of new projects. One of the most significant of these was Kashagan in Kazakhstan. This is generally considered to be one of largest discoveries in the past 30 years as the field contains an estimated 13 billion barrels of recoverable crude oil. The project has been somewhat troubled over the years though, as the consortium that was working to develop the project saw its members change frequently for various reasons. First production finally began in 2013 after years of delay, and the project has been ramping up ever since. Total is one of the partners on this project.

In a few recent articles, particularly this one, I have discussed the growing importance of liquefied natural gas in the global energy space. Total has been an active participant in this market and, in December 2017, the company brought the massive Yamal LNG project online. The second phase of the project came online in 2018. The Yamal LNG project is an enormous project located on the Yamal Peninsula in Russia that consists of natural gas production in the South Tambey Field, a liquefied natural gas plant capable of producing 16.5 million tons of LNG annually, and a shipping operation consisting of numerous owned and chartered LNG tankers. The project is a joint venture between Novatek, Total, CNPC, and the Silk Road Fund. As the project still has another stage that is scheduled to come online in 2019, it should provide another boost to the company's production over the next several months.

Total also had a few other high profile start-ups over the course of the year including Ichthys, Fort Hills, Kaombo North, and some others. All of these start-ups or ramp-ups boosted the company's production by 12% over 2017 levels. In addition to this, the portfolio effect boosted production by 2% year-over-year. This was mostly driven by the acquisition of Maersk Oil, partially offset by the sales of Visund in Norway and Rabi in Gabon. In addition, this growth was offset by a 4% production decline across the company's other fields, which is just due to ordinary declines that all fields experience.

A few times over the past year, most notably here, I discussed how Total has been actively entering the renewables industry as a way to diversify itself away from traditional fossil fuels. Unfortunately, this segment of the company's business delivered mixed results during the quarter:

Source: Total S.A.

As we can see here, the unit had an adjusted net operating income of $176 million in the quarter compared to $232 million in the same quarter of last year. However, the company did see the performance of this unit improve substantially if we look at the full-year numbers. Total credits this to good performance of its gas and power trading activities and especially the LNG operations. While Total did not state how much its renewable energy plants (mostly solar) delivered in isolation, it does seem likely that this contributed somewhat to the improvements that we saw.

In conclusion, this was a reasonably solid quarter for Total driven by new project starts and ramp-ups, which boosted the firm's production levels. While lower than in the middle of 2018, oil prices were still high enough to ensure that the company could generate solid margins and were still higher than a year ago. One of the major stories in the energy space over the next few years is likely to be LNG, and Total saw strong results here as well. Overall, the company delivered solid performance, and investors should certainly be pleased with the company's performance.

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 article.

Additional disclosure: I am long a variety of LNG-related stocks but none of them are mentioned in this article.

[waldron] 14/2/2019 17:15

FTSE 100
7,197.01 +0.09%
Dow Jones
25,434.4 -0.43%
CAC 40
5,062.52 -0.23%


Brent Crude Oil NYMEX 64.38 +1.21%
Gasoline NYMEX 1.50 +2.35%
Natural Gas NYMEX 2.59 +0.47%


WTI (WTI)
- 14/02 18:04:29
54.24 USD +0.48%



Eni
14.78 -0.51%


Total
48.985 +0.15%

Engie
14.04 +0.65%

Orange
13.195 -0.34%



BP
540.9 -1.87%


Shell A
2,427 -1.12%

Shell B
2,460 -1.20%

[waldron] 14/2/2019 15:36

France's Total SA (FP.FR) said Thursday that it signed a joint-venture agreement with Saudi Aramco to develop a network of fuel and retail services in Saudi Arabia, making the French group the first international oil major to invest in the country's fuel retail network.

The two companies plan to invest roughly $1 billion in the Saudi fuel retail market over the next six years under the 50-50 joint venture, the French oil company said.

Total said the agreement is part of its overall strategy "to expand in fast-growing markets worldwide."

Total and Saudi Aramco have also signed an agreement to acquire the Tas'helat Marketing Company and the Sahel Transport Company, including their existing network of 270 service stations and fuel-tanker fleet. Total and Saudi Aramco plan to modernize the network and build additional service stations at select locations, the French company said.

The operation remains subject to approval from the relevant administrative authorities, Total said.



Write to Patrick Costello at [e-mail].



(END) Dow Jones Newswires

February 14, 2019 06:36 ET (11:36 GMT)

[waldron] 13/2/2019 17:18

FTSE 100
7,190.84 +0.81%
Dow Jones
25,520.63 +0.37%
CAC 40
5,074.27 +0.35%


Brent Crude Oil NYMEX 63.71 +2.07%
Gasoline NYMEX 1.47 +2.84%
Natural Gas NYMEX 2.59 -3.83%


WTI (WTI)
- 13/02 18:06:10
54.3 USD +1.59%



Eni
14.856 +0.68%



Total
48.91 +0.24%

Engie
13.95 +0.18%

Orange
13.24 +0.19%


BP
551.2 +1.10%


Shell A
2,454.5 +0.59%


Shell B
2,490 +0.63%

[grupo] 13/2/2019 07:41

Total S.A.: Major Offshore Gas Discovery In South Africa
Feb. 12, 2019 7:26 PM ET|
3 comments
|
About: TOTAL S.A. (TOT)
Fun Trading
Fun Trading
Special situations, contrarian, long/short equity, value
(11,399 followers)
Summary

Total S.A. has made a significant gas condensate discovery at the Brulpadda prospect on Block 11B/12B offshore South Africa.

"It could be around 1 billion barrels of total resources of gas and condensate," said Patrick Pouyanné, Total CEO.

TOT is one of the most active oil supermajors and ought to be among the first oil stocks held as a long-term investment.

(Image: Semi-submersible Deepsea Stavanger (2010), managed and owned by Odfjell Drilling)
Investment Thesis

Total S.A (TOT) is one of the most active oil supermajors and ought to be among the first oil stocks held as a long-term investment in any savvy investor's portfolio.

Like Royal Dutch Shell (RDS.A) (RDS.B), the French integrated oil company has a dividend increasing or stable every year since 1982, with an attractive trailing yield of about 4.70% (according to Nasdaq.com). It has been considered a preferred stock for various institutional investors for many decades.

The company released its fourth-quarter results on February 7, 2019, and I will present my key takeaways soon in a separate article.

However, as a preview, Total S.A. revenues (minus excise taxes) came in at $46.312 billion, up 11.8% from $41.442 billion generated in the year-ago quarter. Total S.A. is present worldwide, and its upstream production in K Boep/d is as follows:

(Note: Liquids represent 55.3% of the total output. Production was up 2.6% sequentially.)

According to a study from Rystad, Total S.A. is among the most successful oil and gas companies when it comes to success in exploration.

Source: Rystad
Important Gas Discovery on February 7, 2019

From OffshoreEnergyToday, we learn that:

French oil company Total has made a significant gas condensate discovery at the Brulpadda prospect on Block 11B/12B offshore South Africa.

The Brulpadda discovery is located on Block 11B/12B in the Outeniqua Basin 175 kilometers off the southern coast of South Africa. The block covers an area of 19,000 square kilometers with water depths ranging from 200 to 1,800 meters.

(Source: Africa Energy Corp.)

Note from the company:

Africa Energy holds a 4.9% effective interest in the Exploration Right for Block 11B/12B. The Company owns 49% of the shares in Main Street 1549 Proprietary Limited, which has a 10% participating interest in the block. Total as operator holds a 45% participating interest in Block 11B/12B, while Qatar Petroleum and CNRI hold 25% and 20%, respectively.

The Brulpadda 1AX well encountered "a total of 57 meters of net gas condensate pay over two Lower Cretaceous high-quality reservoirs."

The well was drilled at about 1,400 meters of water and necessitated a semi-submersible harsh-environment rig. As we can see in the map indicated above, the potential for a massive gas reserve is evident.

The contract was awarded to Odfjell's Deepsea Stavanger semisub for a total value of $55 million (including demobilization/mobilization costs and excluding options) with a duration between 60 to 80 days, or ~$786k/d, which is quite high due to the location that is far from the Maria Field in the Norwegian Sea, where the rig operated before for Wintershall Norge. With this discovery, the semisub Deepsea Stavanger contract will undoubtedly be extended.

Patrick Pouyanné, chairman of the Board and chief executive officer of Total, said:

It is gas condensate and light oil. Mainly gas. There are four other prospects on the license that we have to drill; it could be around 1 billion barrels of total resources of gas and condensate

Conclusion and Technical Analysis

Total S.A. is a solid company with a very successful track record in exploration. This new discovery is another example of its constant effort to find oil and gas worldwide.

This new discovery offshore South Africa can be a game-changer for South Africa.

However, Andrew Latham, vice president, global exploration at natural resources consultancy Wood Mackenzie, said:

Even though the well isn’t an oil discovery, if Brulpadda proves to be anywhere near as big as the estimates of up to 1 billion barrels of oil equivalent resources, it will still be a game-changer for South Africa.

South Africa is now an encouraging "hot spot" exploration drilling, alongside Guyana, Brazil, Mexico, the U.S. Gulf of Mexico, Cyprus, and the Barents Sea in Norway. However, the deep water in this part of the world is similar to the North Sea harsh environment which fit perfectly Transocean's (RIG) fleet rigs and expertise.

Technical Analysis

TOT is forming an intermediate ascending wedge pattern, which is not shown by Finviz. The line support is about $54.50 (I recommend buying a little at this level depending on the oil prices), and the line resistance is about $56.25 (I recommend selling about 15% of your portfolio at this level).

This intermediate ascending wedge pattern is closed to its apex (crossing of the line resistance and line support), and it suggests that a final crossing of the pattern (breakout) will happen very soon.

Generally, a rising wedge pattern is considered bearish short term, and we may re-test the $52 support (I recommend buying at this level).

Author's note: If you find value in this article and would like to encourage such continued efforts, please click the "Like" button below as a vote of support. Thanks!

Disclosure: I am/we are long TOT. 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.

[grupo] 13/2/2019 07:35

Total: The Fastest-Growing Oil Major Is Offering A 5.5% Dividend Yield
Feb. 12, 2019 6:20 PM ET|
8 comments
|
About: TOTAL S.A. (TOT)
Sure Dividend
Sure Dividend
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Summary

Total grew its production by 8% last year and is poised to grow its output by 9% this year.

Total is offering a 5.5% dividend yield, which is much higher than the yield of Exxon Mobil and Chevron.

The article discusses a series of competitive advantages, which render Total by far the most resilient oil major during downturns.

By Aristofanis Papadatos

Total (TOT) is relatively overlooked among the 294 dividend-paying energy stocks. But Total is a high-yield oil stock with attractive growth potential. Since early October, the stock has incurred a 15% correction, primarily due to the 26% plunge of the price of Brent, from $84 to $62. As a result, the stock has become remarkably attractive and can now offer double-digit annual returns thanks to its 5.5% dividend yield and 9% production growth.

As Total is also the most resilient oil major at low oil prices, investors should consider purchasing the stock.
Business overview

Total is the fourth-largest oil and gas company in the world based on its market capitalization of $145 B. Like the other oil majors, it is a fully integrated company and operates in four segments: Upstream, Downstream (mostly refining), Marketing and Gas, Renewables & Power. In 2018, these four segments generated 64%, 21%, 10% and 5% of the total earnings of the company, respectively.

In 2018, Total exhibited impressive performance. It grew its output by 8% thanks to the start-ups of many new upstream projects and the ramp-ups of recently developed projects and thus reached an all-time high production level of 2.8 M barrels per day. The 8% output growth was the highest in its peer group. To provide a perspective, Exxon Mobil (XOM) saw its output decrease 4% in 2018 while Chevron (CVX) and BP (BP) grew their output by 7% and 8%, respectively. While Total and BP posted the same production growth rate, the former expects to grow its output by 9% this year whereas the latter expects a 5%-7% growth rate.

Moreover, Total benefited from a 32% increase in the average price of oil in 2018 over prior year. Thanks to this tailwind and its production growth, Total grew its earnings per share by 23%, from $4.12 in 2017 to $5.05 in 2018.
Growth prospects

Like most of its peers, Total failed to grow its production during 2010-2014. However, it has returned to a solid growth trajectory thanks to 8 major start-ups in 2018-2019. Total grew its output by 8% last year and expects to grow it by 9% this year. In addition, it expects to grow its output by 5% per year for at least another three years.

Moreover, Total has greatly improved its reserve portfolio since the downturn of the energy sector began, almost five years ago. Since 2015, the company has added about 7.0 B barrels of reserves at a cost below $2.5 per barrel and expects free cash flows above $4.0 B from these assets from this year, at a Brent price around $60. Given that the company posted free cash flows of $12.1 B last year, these assets will greatly boost its free cash flows, by approximately one third.
Total Acquisitions
Source: Investor Presentation

Furthermore, Total is likely to benefit from somewhat rising oil prices in the upcoming years. The price of oil has temporarily plunged since early October, mostly due to a sell-off after the U.S. government distributed exceptions to its sanctions on Iran and thus essentially eliminated their effect on global supply. However, global demand for oil continues to grow at a solid pace. It grew from 98.4 M barrels per day in Q3-2017 to 99.8 M barrels per day in Q3-2018 so it is poised to cross the 100.0 M threshold for the first time in history. Thanks to decent global economic growth, oil demand will remain in an uptrend and will thus probably lead oil prices to somewhat higher levels in the upcoming years.

Overall, Total is ideally positioned to grow its earnings per share in the upcoming years thanks to sustained production growth and an increase in the oil prices. We expect this oil major to grow its earnings per share by about 7% per year over the next five years.
Competitive advantages – resilience to downturns

Total enjoys a series of competitive advantages and thus it is by far the most defensive oil major. Its defensive nature was prominent in the 2014-2017 downturn of the energy sector, which resulted from the collapse of the oil price. The earnings per share of Total fell only 49%, whereas those of Exxon Mobil plunged 75% and Chevron and BP posted losses in 2016.

The key behind the resilience of Total was its superior refining segment. During the rough years of refining (2008-2013), the upstream segment was generating about 90% of the total earnings of all the oil majors. Consequently, the other oil majors sold many of their refineries, failing to see that their refineries were their hedges against a plunge of the oil price. Total maintained almost all its refineries and thus it has reaped the full benefit from the high refining margins in the last five years.

It is also worth noting that the refining earnings of Total incur an exceptionally low tax rate thanks to the tax code of France. This factor enhances the resilience of the results of the company in periods of low oil prices, when the refining segment generates most of the earnings of the company.

Total also enjoys another competitive advantage when compared to its peers. It produces only a minor portion (less than 10%) of its natural gas in the U.S. and hence it enjoys a much higher average natural gas price than the price of Henry Hub. To be sure, in 2018, Total realized an average natural gas price of $4.78, which was 51% higher than the Henry Hub average price of $3.17.

Moreover, Total has a much lower production cost than its peers. Since the downturn of the sector began in 2014, all the oil majors drastically reduced their production costs in order to somewhat mitigate the impact of the collapse of the oil price. However, Total outperformed its peers by a wide margin in this aspect and thus reduced its production cost to $5.7 per barrel, which is approximately half of the production cost of the other oil majors.
Total Cost Cuts
Source: Investor Presentation

Overall, thanks to the above competitive advantages, Total has proven much more resilient than its peers during downturns. Given the high cyclicality of the sector, the importance of resilient performance during downturns cannot be overemphasized.
Dividend

Thanks to its strong business performance, Total raised its quarterly dividend by 3%, from €0.64 to €0.66. As a result, the stock is offering a 5.5% forward dividend yield. This is much higher than the 4.4% and 4.1% yields of Exxon Mobil and Chevron, respectively.

Moreover, Total’s management has pledged to raise the dividend by another 3% next year. Furthermore, thanks to the above mentioned resilience of Total even under the most adverse business conditions, the dividend can be considered safe for the foreseeable future. Therefore, investors can initiate a position in this exemplary oil major at an attractive yield and rest assured that the dividend will keep growing.
Valuation

Despite the 9% production growth expected this year, we prefer to be conservative due to the dramatic swings of the oil price and thus assume just 3% earnings-per-share growth for this year, from $5.05 to $5.20. Given this conservative forecast, the stock is trading at a forward price-to-earnings ratio of 10.6. This is a remarkably cheap valuation level for this well-managed company. Moreover, the stock has traded at an average price-to-earnings ratio of 11.9 during the last decade. If the stock reverts to its average valuation level over the next five years, it will enjoy a 2.3% annualized gain thanks to expansion of its price-to-earnings ratio over this period.
Final thoughts

The steep correction of the oil price since early October has led Total to bargain territory. The company is growing its output at the fastest pace in its peer group while it also offers a markedly attractive 5.5% dividend yield. As a result, investors who purchase the stock at its current price are likely to enjoy double-digit total annual returns in the upcoming years thanks to 7% earnings-per-share growth, a 5.5% dividend yield and a 2.3% annualized expansion of the price-to-earnings ratio. Moreover, investors can rest assured that the dividend will remain safe even in the event of a downturn thanks to the impressive resilience of this oil major during downturns.

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.