Total Share Discussion Threads

[waldron] 14/4/2016 16:46

Markets | Thu Apr 14, 2016 11:01am EDT
Related: Utilities
Total to create gas, renewables, power division - CFDT union

French oil and gas major Total will on April 19 present a new company structure that creates a Gas, Renewables and Power division as it seeks to push further into cleaner fuels and power, the CDFT trade union said on Thursday.

Total executives will meet with workers representatives in a works council meeting next Tuesday to present the plan that has been dubbed "One Total", the trade union said.

A Total spokeswoman confirmed the meeting will take place, but declined to give any further details.

French business daily Les Echos reported in March that Chief Executive Officer Patrick Pouyanne had told employees in an internal note that the company aims to expand its presence in the power market through its gas and other renewable businesses.

Renewables currently make up about 3 percent of Total's portfolio. The paper quoted Pouyanne saying the target was to grow renewables to about 20 percent of its portfolio by 2035.

The Gas, Renewables and Power branch will be Total's fourth business division. The others are Exploration and Production; Marketing and Services, and Refinery and Chemicals. (Reporting by Bate Felix; Editing by Andrew Callus)

[ariane] 14/4/2016 09:00

Total, KOGAS eye new LNG opportunities in Asia

April 14, 2016 Asia, Company News, Europe, Natural Gas, News 0

France’s oil supermajor, Total, said Wednesday it has extended its cooperation agreement with South Korea’s state-owned gas company, Korea Gas (KOGAS), as the firms seek new liquefied natural gas (LNG) markets in Asia, Kallanish Energy learns.

The companies signed a memorandum of understanding (MoU) during the recent LNG 18 Conference in Perth, Australia, “to reinforce mutual cooperation to explore opportunities throughout the LNG value chain,” Total said, in a statement.

“We are delighted to extend our long-standing cooperation with KOGAS, the world’s largest LNG buyer and regasification terminal operator, along the entire LNG value chain,” said Total President, Gas, Laurent Vivier. “Our combined expertise will contribute to the generation of successful business opportunities in various LNG and gas sectors.”

Under the MoU, Total and KOGAS agreed to jointly identify and pursue options to develop the LNG market in Asia, in new importing countries, as well as to cooperate in LNG trading and terminal optimization.

[ariane] 13/4/2016 18:59

France's Total to prioritize gas projects as it returns to Iran: CEO

Perth (Platts)--13 Apr 2016 942 am EDT/1342 GMT

Total's priority as it returns to doing business in Iran will be gas rather than oil, Chairman and CEO Patrick Pouyanne said Wednesday.

Speaking on the sidelines of the LNG 18 conference in Perth, Western Australia, Pouyanne said the French major's focus in Iran would also prioritize petrochemicals, "which is another way to monetize gas."

Total signed a framework agreement with the National Iranian Oil Co. in late January for the purchase of crude oil for its French and European refineries. The pact was signed after the European Council lifted sanctions against Iran, in the wake of Tehran's agreement to dismantle a majority of its nuclear program.

At the same time, Total signed a memorandum of understanding under which NIOC would provide the technical data on some gas and oil projects, so that it could assess potential development in Iran.

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Total had an upstream project at the giant South Pars gas field, together with Russia's Gazprom and Malaysia's Petronas, prior to the imposition of sanctions. Pouyanne said in 2015 that Total was working on developing an LNG project at South Pars once sanctions were lifted, Platts reported earlier.

When the crude agreement was struck, a Total spokeswoman told Platts that it would allow the company to buy 150,000-200,000 b/d from Iran. She declined to give further details, but said that oil supplies were expected to begin "sooner rather than later".

The European Union had been importing nearly 600,000 b/d of Iranian crude and condensate before the tightening of economic sanctions in 2012. France imported an average of 60,000 b/d of Iranian crude in 2011, before the sanctions took effect, according to EU data.

--Christine Forster, [e-mail]
--Edited by E Shailaja Nair, [e-mail]

[sarkasm] 13/4/2016 09:02

Total CEO Says Prepared to Invest in New Projects Despite Shaky Environment
13/04/2016 4:27am
Dow Jones News

Total (EU:FP)
Intraday Stock Chart

Today : Wednesday 13 April 2016
Click Here for more Total Charts.

By Robb M. Stewart


PERTH, Australia--French oil major Total SA says it remains prepared to invest in new projects despite the slump in energy prices and weaker than expected demand growth.

Like others in the industry, the company has been working to slash costs and Chief Executive Patrick Pouyanné said they will need to be lower for Total to sanction any fresh oil and gas developments. But he predicted another wave of projects will be approved by energy companies in the years ahead.

"For Total, the best strategy is to invest when prices are low because then costs are low," Mr. Pouyanné said at conference in Western Australia focused on liquefied natural gas. "In the commodity business, you make money if you are able to launch projects in counter cycle. If you are just investing at the peak of the prices and the peak of costs like everybody, you have little chance to make a differentiation," he said.

Total has said it will cut spending to around US$19 billion this year from US$23 billion last year.

The continued fall in oil prices last year prompted Total earlier this year to reassess the value of its assets, writing them down by US$3.7 billion, much of which was due to impairments for its stake in the Gladstone LNG project in eastern Australia that began producing in 2015. In February, the company reported a US$1.63 billion loss for the fourth quarter of 2015, narrower than the US$5.66 billion loss a year earlier when it booked a hefty US$6.5 billion write-down on oil-product assets due to the fall in oil prices.

"When we sanction a project, we know the oil and gas price will fluctuate," he said Wednesday. "We prefer to start projects in a better environment, but that's life. We don't control the price."

Mr. Pouyanné said that from Australia he is scheduled to visit Papua New Guinea, where Total has a 40% stake in an onshore block that covers the promising Elk and Antelope natural gas discoveries.

Later Wednesday, a memorandum of cooperation would be signed in Perth between Total and Korea Gas Corp., known as Kogas, extending an existing partnership in the downstream part of the business and trading, Mr. Pouyanné said.

"We are confident that if we want to develop an energy market in the coming years, then we need to be closer to our buyers," he said.



-Write to Robb M. Stewart at [e-mail]



(END) Dow Jones Newswires

April 13, 2016 00:12 ET (04:12 GMT)

[sarkasm] 13/4/2016 07:15

Total CEO: Ready to invest in new projects
By Robb M. Stewart

Published: Apr 13, 2016 12:46 a.m. ET


PERTH, Australia--French oil major Total SA says it remains prepared to invest in new projects despite the slump in energy prices and weaker than expected demand growth.

Like others in the industry, the company has been working to slash costs and Chief Executive Patrick Pouyanné said they will need to be lower for Total to sanction any fresh oil and gas developments. But he predicted another wave of projects will be approved by energy companies in the years ahead.

"For Total, the best strategy is to invest when prices are low because then costs are low," Mr. Pouyanné said at conference in Western Australia focused on liquefied natural gas. "In the commodity business, you make money if you are able to launch projects in counter cycle. If you are just investing at the peak of the prices and the peak of costs like everybody, you have little chance to make a differentiation," he said.

Total has said it will cut spending to around US$19 billion this year from US$23 billion last year.

The continued fall in oil prices last year prompted Total earlier this year to reassess the value of its assets, writing them down by US$3.7 billion, much of which was due to impairments for its stake in the Gladstone LNG project in eastern Australia that began producing in 2015. In February, the company reported a US$1.63 billion loss for the fourth quarter of 2015, narrower than the US$5.66 billion loss a year earlier when it booked a hefty US$6.5 billion write-down on oil-product assets due to the fall in oil prices.

"When we sanction a project, we know the oil and gas price will fluctuate," he said Wednesday. "We prefer to start projects in a better environment, but that's life. We don't control the price."

Mr. Pouyanné said that from Australia he is scheduled to visit Papua New Guinea, where Total has a 40% stake in an onshore block that covers the promising Elk and Antelope natural gas discoveries.

Later Wednesday, a memorandum of cooperation would be signed in Perth between Total and Korea Gas Corp., known as Kogas, extending an existing partnership in the downstream part of the business and trading, Mr. Pouyanné said.

"We are confident that if we want to develop an energy market in the coming years, then we need to be closer to our buyers," he said.

-Write to Robb M. Stewart at [e-mail]

[maywillow] 10/4/2016 22:43

Iraq Is Latest To Announce Record Oil Production: Why This Is Just The Beginning Of The Supply Glut
Tyler Durden's picture
Submitted by Tyler Durden on 04/10/2016 14:14 -0400

Abu Dhabi Crude Crude Oil International Energy Agency Iran Iraq Kuwait Market Share OPEC Saudi Arabia



inShare3


First it was the Saudis; then Russia announced another month of record oil production.



And now it is Iraq's turn. According to the state-run Oil Marketing Co., Iraq increased crude output to a record level in March, ahead of the long-awaited April 17 meeting in Qatar where OPEC members and other producers may or may not (they won't) agree to cap production to curb a global glut.

As Bloomberg reports, crude output in OPEC’s second-biggest producer rose to 4.55 million barrels a day last month from 4.46 million barrels in February, while exports increased to 3.81 million barrels a day in March from 3.23 million the previous month, the company, known as Somo, said in an e-mailed statement. The 500,000 barrel increase in monthly barrels has made up almost entirely for the 600,000 barrel decline in US shale output.

Ahead of the Doha meeting, Iraq - which is clearly pumping at full power - supports an agreement reached in February between Saudi Arabia, Russia, Venezuela and Qatar to cap output at January levels. Well maybe: this is what the Iraqi Oil Ministry Spokesman Asim Jihad said on March 23, without confirming if the country agrees to freeze its own production.

Iraq's unprecedented oil production has been duly documented here. Recall just on Friday we showed a line of oil tankers caught in a traffic jam near the Iraqi port of Basra, causing delays in loading. The culprit is high oil production in Iraq. The port at Basra is struggling to load up all the oil tankers fast enough, forcing some to sit and wait. Iraq exported about 3.26 million barrels per day (mb/d) in March from its southern coast, which is up from just 2.5 mb/d in 2010.



Furthermore, we already know that Iran and Libya have refused to cap output putting any Doha agreement in jeopardy because as the Saudis made all too clear two weeks ago, they won't limit their own production without Iran joining, but for now the market has hope.

Just like Iran, Iraq is boosting output and exports after decades of economic sanctions and war. The country pumped a then-record 4.43 million barrels a day in January, the International Energy Agency said in a report published last month. Iraq holds the world’s fifth-biggest crude oil reserves. Iran on the other hand, has said it won't limit production until it reaches the roughly 4+ million barrell output it had before US sanctions crippled its production.

As Bloomberg reminds us, Iraq’s Oil Minister Adel Abdul Mahdi suspended his participation in the cabinet last month, citing disarray in government ministries. Nizar Saleem Numan, who was nominated to replace him, withdrew his candidacy earlier this month, citing a lack of agreement over the make-up of the proposed cabinet.

In short: any attempts to rein in Iraq's oil production will face an uphill climb.

As for Iran, the WSJ warns that the the upshot from the country's slow return to peak output is that it may have given false comfort to the rebounding oil market. "Some analysts think that the amount of Iranian crude stored on supertankers has even increased. Betting that those barrels won't show up at a refinery soon or that Iran will willingly cut short its return to the oil market would be naive."

For Kuwait and the U.A.E., the goals are even higher. Kuwait plans to raise production capacity by 5 percent from 3 million barrels a day by the third quarter, and to reach 4 million barrels by 2020. Abu Dhabi means to lift production capacity to 3.5 million barrels a day by 2017 from about 3 million.For Saudi Arabia the expansion is as much about gas as oil. The number of rigs drilling for gas there has jumped from about 20 in early 2013 to 60 last month, as the country tries to develop its own resources to support a growing petrochemicals industry and free up oil for export.

The first part of Saudi Arabia's "market share" strategy saw it refuse to continue cutting output to prop up high-cost producers elsewhere. As a result, U.S. production has fallen by about 600,000 barrels a day from its recent peak and other high-cost areas are following.The Saudis may not have announced part two of the strategy yet, but it's well underway.

But what may be most concerning for oil bulls, especially in a world in which demand refuses to pick up to "balance" the massively oversupplied market, is another Bloomberg report that in what would be the second phase of the kingdom's strategy to defend its market share against rival producers (most visibly U.S. shale), Gulf states are planning to raise output capacity to fill the hole left by the lack of investment in new projects elsewhere.

The details:

The number of rigs drilling for oil in three Arab countries has more than doubled since 2010.







All three saw drilling reach at least 20-year records in 2015 and activity remains close to that peak. An expansion at Saudi Arabia's Shaybah field should add 250,000 barrels a day as early as June, while the Khurais field could contribute another 300,000 barrels by the end of 2017. State-owned Saudi Aramco says this will let it ease pumping from older fields yet maintain a production capacity of more than 12 million barrels per day, 2 million barrels above its current rate.



For Kuwait and the U.A.E., the goals are even higher.



Kuwait plans to raise production capacity by 5 percent from 3 million barrels a day by the third quarter, and to reach 4 million barrels by 2020. Abu Dhabi means to lift production capacity to 3.5 million barrels a day by 2017 from about 3 million.

So in an environment in which not only the Saudis but Kuwait and the UAW are all planning to unleash millions more barrels of oil, the market somehow believes that next Sunday OPEC will agree - and actually comply - with a production freeze? The algos may be stupid enough to believe it, but we hope any carbon-based traders can see the writing on the wall.

[waldron] 09/4/2016 15:45

>
>
> Three Oil Majors Have Debt Ratings Cut by Moody's on Price Rout
>
> Three of the world’s largest energy companies had their credit ratings lowered by Moody’s Investors Service on the expectation that oil prices will stay low for longer and cause leverage concerns.
>
> Chevron Corp. and Royal Dutch Shell Plc had their ratings reduced by one level, while Total SA’s was cut two steps, according to statements by the New York-based rating company on Friday. Chevron will generate negative cash flow amid rising debt for at least the next two years, while Shell will have elevated leverage following its acquisition of BG Group Plc, Moody’s said. Prices are expected to stay low through this year and next and continue to pressure Total’s operating cash flows and credit metrics, Moody’s said.
>
> Oil companies big and small are having their credit ratings cut as the collapse in crude prices reduces cash flows and limits their ability to sustain debt payments. Prices in New York are down by more than 60 percent from a mid-2014 peak.
>
> Chevron and Shell’s ratings were lowered to Aa2, the third-highest grade, from Aa1. Total’s rating was brought down to Aa3, from Aa1. BP Plc’s rating was confirmed at A2, as its credit metrics and business profile compare favorably with its major oil peers and the July 2015 settlement over the Macondo spill reduced legal uncertainties and gave clarity on its business, Moody’s said.
>
> The actions conclude reviews started in January and February by Moody’s, which expects that global oil prices will remain weak over the medium term. The world is “awash in oil” and high inventories and production are declining slowly, Moody’s analysts led by Terry Marshall said in a March 30 report. If U.S. crude rises above $50 a barrel, investment by lower-cost, short-cycle producers will undercut the effort by Organization of Petroleum Exporting Countries to bring down the global glut, the analysts said.
> Before it's here, it's on the Bloomberg Terminal.

[la forge] 08/4/2016 22:09

Well, this is a bit of a disappointment. We have oil flying (up nearly 7 percent!), we have a weak dollar, we have China quiet all week, and we have a dovish Fed that traders believe have put some kind of floor under the market.

And this is all we get? The Dow Industrials up 40 points in a lackluster, average-volume session? In the past months, if oil would be up 7 percent and the dollar would be weak, we would have been up 200-250 points. What's wrong?

You can argue oil may be decoupling from the markets. Maybe. But the usual suspects that would benefit from a weak dollar are all up: energy, materials, industrials. In fact, there's more than four stocks advancing for every one declining.

So, why the crummy point action?
Traders work on the floor of the New York Stock Exchange.
Pisani: Here's what's next for stocks

I think the problem is that the "V" rally is over.

Remember, we dropped big in January and February on fears of a recession. We rallied back when it became clear that: 1) a recession is highly unlikely, and 2) the Fed is so dovish that they are putting a "floor" under the markets.

So, a good part of the rally was predicated on a dovish Fed, which we now have. A more dovish Fed is now priced in to the market.

As for oil, if you believe $26 is the bottom — and as time goes by it is increasingly looking like that is the case — it is getting harder to get an equity reaction. The main worry was, where's the bottom?

The problem is not finding a bottom, it's how much upside there is to the market. Investors are not enthusiastic about buying at these levels because they're not at all sold on paying up with stocks near historic highs and no appreciable global growth outside the U.S.

What about earnings? We all know that earnings are down four consecutive quarters. Intuitively, this sounds like it is not good news, and I certainly agree.

But all weak earnings does is put a ceiling on stocks. And there is a ceiling: the markets topped out a year ago. Right?

So, we have a floor to the market, and we have a ceiling. What's this all mean?

Trading range. I said the market was a "solid hold" two weeks ago, and nothing I have seen since then has made me change my mind.
Traders work on the floor of the New York Stock Exchange.
Here's how earnings declines affect stock markets

What would change this dynamic? If we could inch our way to a new high — 2,130 was the old historic high, way back in May 2015 — it would be a breakout from the range and might force some marginal money back in.

What could go wrong? We got an inkling this week: if investors come to believe that central bankers are toothless tigers. Haruhiko Kuroda, governor of the Bank of Japan, implied more quantitative easing was coming this week, and the yen rallied. Not good. Confidence eroding.

There's still confidence in ECB President Mario Draghi and Fed Chair Janet Yellen, as worry, but the cat is out of the bag, and worry about the limits of central bank intervention can now be added as a risk factor.
Bob Pisani
Bob PisaniCNBC "On-Air Stocks" Editor

[la forge] 05/4/2016 18:38

Total says costs still unacceptably high in oil and gas

* Total E&P President says industry collaboration needed

* Says Total will be patient on new investments

* Firms can only manage downturn through costs reduction

By Bate Felix

PAU, France, April 5 Oil and gas companies must make further serious cost cuts and should work together to generate further savings to weather the current difficult downturn, Total's executive Arnaud Breuillac said on Tuesday.

Costs are still unacceptably high and cost reduction was necessary to sustain businesses, Breuillac, President for Exploration & Production at the French oil and gas major, told an industry event in Pau, southwest France.

Oil prices have plunged since 2014 due to global oversupply concerns, hitting profits in the sector and forcing companies to cut costs and find savings.

Speaking in century-old Palais Beaumont while some 200 environmental activists protested outside, Breuillac said oil and gas was still needed despite progress in renewable energies.

"To ensure the right level of profitability, oil companies and services companies must work together to find innovative ways to bring cost down," Breuillac told industry experts meeting for 2016 MCE Deepwater Development conference.

"We need to increase our collaboration, to find better ways to share risks and to collectively find a new balance," Breuillac said.

He added that oil and gas companies could only to manage the downturn through cost reductions.

"We cannot control the oil price, so we have to excel in what we can control ... our capacity to deliver projects, operational excellence, new technology innovation and of course to lower opex and capex," he said.

PATIENT ON NEW INVESTMENTS

Breuillac said Total has cut operating costs by 1.5 billion euros in 2015 with an objective to gain 2.4 billion in 2016 and 3 billion more in 2017.

"These efforts combined with a more efficient exploration and a new production will enable us to maintain the lowest technical cost among our peers below $24 per barrel," he said.

"This means that above $10 per barrel we can generate positive cash flow from our operations and above $25 per barrel, we generate positive results," he added.

He said the company was also cutting investments and holding back final investment decisions on some projects until oil prices recover.

"Let me tell you that we will be patient before sanctioning new projects if costs remain high," Breuillac said, adding that the company was coming out of an intensive investment phase with nine project startups last year and five more this year, but no major project was sanctioned in 2015 and 2016. (Reporting by Bate Felix, editing by David Evans)

[la forge] 05/4/2016 14:31

Jeroen van der Veer headed Shell between 2004 and 2009 (Source: Getty)

The former boss of Royal Dutch Shell believes that the time is ripe for oil majors to invest in alternative energies.

Speaking in an exclusive interview with the World Energy Council's monthly magazine, Jeroen van der Veer, who headed Shell between 2004 and 2009, said: "I think we were too early once or twice [in the past]. But the time may be ripe now."

Shell's most recent annual report showed that it intends to invest in solar and wind energy projects in the future.

Van der Veer is also working on a report which will show a decline of oil in the global energy mix from 31 per cent now to well under 20 per cent in 2050.

Read more: Google makes "biggest-ever" purchase of renewable energy as it buys wind farms and solar projects

He explains there are two competing views regarding how this will affect oil companies such as Shell.

"The first is that as the new global business environment changes, this will offer opportunities for big energy companies to develop new forms of energy. Then you won't produce fossil fuels anymore at some point in the future."

"The second school says the mission of oil and gas companies is to produce oil and gas, and if this mission ends, then the companies end too.

"I belong to the first school."

Van der Veer addressed concerns that changes in the global energy landscape could one day writedown the value of companies' coal, oil and gas assets.

"I think there are many misconceptions about the idea of stranded assets," Van der Veer said.

Read more: Renewable energy investment drops to 11-year-low

"That significant amounts of coal will have to stay under the ground, I can understand. And a country like Saudi Arabia, which has more than 100 years of oil in the ground, may also be concerned whether they can exploit all their resources."

"But the assets on the balance sheets of the international oil companies are resources they will develop over the next 20 years or so."

Governor of the Bank of England, Mark Carney, has previously warned such assets could be left "stranded" by efforts to combat climate change.

He said its effects tend to manifest after a political and business cycle of two to three years, meaning actors often have no direct incentive to tackle the issue.

[maywillow] 03/4/2016 08:39

Total S.A. - Higher Earning Oil Major Yielding 6%
Apr. 3, 2016 1:59 AM ET|
About: TOTAL S.A. (TOT), Includes: CVX, XOM
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Summary

Total S.A. still yields almost 6% and has bounced up with what many consider to be a firm bottom for oil prices.

The company continues earning increasing amounts and has managed to increase its production and its reserves.

At the same time, the cycle is expected to last two years something that won't noticeably hurt Total S.A. in its long-term business plan.

Introduction

Total S.A. (NYSE:TOT) is a French multinational integrated oil and gas company. The company is one of six supermajor oil companies in the world with a $113 billion dollar market cap or roughly two-thirds that of Chevron (NYSE:CVX). At the same time, the company yields almost 6%, 5.95% to be exact as of its close for the last day of March 2015.

Total S.A. Refueling Truck - Fortune Dot Com

From the standpoint of oil majors, Total S.A. has had a less difficult time than most. While the company's stock price has dropped from a peak of over $72 in 2014 to recent lows of just under $40 the company experienced an impressive run up in 2014 and its current share price of just over $45 is in line with the company's stock price throughout the lower portions of 2013.

Performance

To start, let us talk about one of the factors that have been supporting Total S.A.'s stock price, its resilient performance.

Total S.A. Safety Performance - Total S.A. Investor Presentation

Total S.A. has had an impressive performance for the year with injuries dropping across the board. The total recordable injury rate has been dropping from a spike of over 2 in 2010 down to just over 1 in the current year. At the same time, the company's operational performance has been increasing as safety performance has been decreasing. This increase in utilization has been minimizing the company's costs while increasing its income.

Total S.A. Integrated Model - Total S.A. Investor Presentation

At the same time, Total S.A. has been benefiting from an integrated model that has seen it produce $8 billion of downstream cash generation and increasing production growth by 9.4%. The company has been exceeding its cash reduction targets, which while respectable, is not surprising given how fast prices for exploration have dropped.

Commodity Prices

Now that we have talked about the company's recent results, let us spend some time talking about the commodity prices crash and what has happened.

Commodity Price Drop - Total S.A. Investor Presentation

The above graphic shows how crude oil and natural gas prices have fared in the past decade. Henry Hub natural gas prices experienced two peaks one in 2007 at over $10 / Mbtu and another smaller one in 2014 at $4 / Mbtu. From both instances, natural gas prices are currently noticeably lower than they were a year ago. Similarly, oil prices experienced peaks in both 2014 and 2007 of more than $100 per barrel before dropping down to recent lows of less than $30.

And currently, in most investor presentations from these oil majors, you'll see them increasingly focused on a single sector of profits, downstream profits. That is because most of these oil majors are losing massive amounts of money from the upstream sector, and find the need to highlight downstream profits. Still most of these companies have upstream prices noticeably above downstream prices and are still having negative earnings.

Oil Deand and Supply Blance - Seeking Alpha

Looking at the oil demand and supply balance, we see that the supply and demand balance isn't expected to come into balance until late 2016. The original oil crash was caused by an oversupply in late 2013 and it took approximately a year until prices began crashing down. Approximately 6-8 months from the start of the crash, prices hit what could be considered the first real bottom.

From that picture, we should expect prices to begin recovering sometime in mid-2018 or another dismal two years for the oil majors. While a grim picture, for a long-term investor in Total S.A., the investor should be able to comfortable expect continued growth and dividend as two-years is a short timeframe in the lifetime of an oil majors.

Total S.A. Cash Flow and Capex

Now that we have talked about Total S.A.'s performance as well as the overall oil market as a whole and when we can expect a recovery, it is time to talk about Total S.A.'s cash flow and capex.

Total S.A. Cash Flow Allocation - Total S.A. Investor Presentation

Since the start of the oil crash, Total S.A. has put itself in the ring with the more elite oil majors by maintaining positive cash flow allocation. The company's 2015 cash flow was a respectable $22.6 billion of which the majority was generated organically. While the company has to sell assets and use financing, it continued to remain strong paying out its easily covered dividend and organically investing $23.0 billion and impressive amount for a company worth just over $100 billion.

Total S.A. Reserves - Total S.A. Investor Presentation

And this continued investment in its business paid off in a big way. Total S.A. beat ExxonMobil by managing to increase its reserves by 7% for a 107% reserve replacement ratio, a feat not even accomplished by ExxonMobil (NYSE:XOM). At the same time, these continued profits allowed the company's net debt to equity ratio to decrease from 31% to 28%. While other companies such as Chevron have been rapidly increasing their debt pile, Total S.A. has decreased its debt pile.

2016 Outlook

With the company's impressive 2015 results, the company continues to have strong plans for 2016.

Total S.A. 2016 Spending Plan - Total S.A. Investor Presentation

The company plans to continue decreasing Capex in the coming years while decreasing spending. The company's 2016 Organic Capex is $19 billion and from 2017 onwards, the company's Organic Capex is $17 - $19 billion onwards. The majority of this 2016 organic Capex is the development of valuable upstream assets. The company is focused on assets that have a higher rate of return hoping to develop them for increased long-term profits.

Total S.A. Production Growth - Total S.A. Investor Presentation

More so, as the result of impressive new project start ups, the company expects to continue increasing production by 5% per year from 2014 - 2019 which should result in a total production increase of almost 30%. With the company's Capex decreasing and its costs coming down the company should be able to reach a point in the next year to two where it can manage its Capex and dividend without asset sales of financial offerings.

At the same time, the company's retail network for retail gasoline and lubricants is expected to continue growing by almost 10% per year and currently contributes more than $2 billion of cash flow. This growth will bring the company hundreds of millions of additional cash flow which should minimize its costs.

Conclusion

Total S.A. has had a difficult time recently watching its stock price take a big hit. However, since the start of this crash, the company has put itself in the running for the best oil majors managing to decrease its debt, increase its production, and increase its reserves. The company has done this while spending 20% of its entire market cap annually on Capex growth.

Many lament the death of the oil business as a result of the growth of renewables. And while that is likely true a hundred years from now, there is no denying that oil remains one of the few high dividend high growth industries that continues generating its investors massive profits. As a result, I recommend investors use the price drop from the crash to open or increase their long-term position in Total S.A.

Disclosure: I am/we are long XOM, TOT, CVX.

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 guitarlumber] 01/4/2016 19:57

March 21, 2016
Ex-dividend date for the 3rd 2015 interim dividend
April 12, 2016
Payment date for the 3rd 2015 interim dividend
June 06, 2016
Ex-dividend date for the remainder of the 2015 dividend
September 27, 2016

[ariane] 30/3/2016 22:24

Total spuds ultra-deepwater well off Uruguay coast
By Andrew Baker - Wednesday, March 30, 2016
Total spuds ultra-deepwater well off Uruguay coast
Source: Miem

A consortium led by French major Total spudded an exploratory well at block 14 in ultradeep waters off the Uruguayan coast, Uruguay's industry, energy and mining ministry (Miem) said.

The well, which is the first to be drilled in Uruguayan waters since 1976, targets the Raya-1 prospect at a depth of 3,400m in the Pelotas basin – a global record.

[waldron] 29/3/2016 21:03

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March 29, 2016, 3:46 P.M. ET

Big Oil: Brutal Earnings, Big Gains?

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By Ben Levisohn

Citigroup’s Alastair Syme and team argue that the earnings from big oil companies like Chevron (CVX), Total (TOT) and Royal Dutch Shell (RDS.A) will be bad…real bad. But that won’t stop the stocks from outperforming. They explain why:

Bloomberg News

Negative headlines, positive performance: We expect the majority of Big Oil companies to post negative 1Q16 earnings, a brutal headline, but one that clearly reflects the impact of cyclical oil price lows this quarter. The outlook can improve. Our positive thesis on the Big Oil group reflects a belief that the market still only discounts modest oil recovery – we think c. $40/bbl is imbedded in valuations – and a view that the group can drive self-help gains to boost profitability even in a low price environment. Signs of this self-help should be evident in 1Q operating performance: we expect to see the delivery of top-line growth (taking market share versus broader industry) and a continued reduction in operating costs, building on substantial cost-cutting through 2015.

We believe that the equity market has neutralised much of its underweight energy positioning in 4Q/1Q, but was caught by the sharp rally in crude from end-January. Our base-case sees oil prices still higher by end-2016 (we see >$50/bbl), albeit with a choppy 2Q likely ahead. In this scenario – a modest, rather than fully-fledged price-recovery – we continue to place a lot of importance on self-help in driving ROE expansion (as opposed to relying simply on oil-leverage). Value-adjusted, we like the self-help stories around Total, Chevron, Statoil (STO), Royal Dutch Shell and Eni (E) in the group. Total is on the Citi European Focus list.

Shares of Chevron have gained 0.6% to $95.27 at 3:34 p.m. today, while Total has risen 1.1% to $45.61, Royal Dutch Shell has dipped 0.2% to $48.05, Statoil has fallen 0.7% to $15.14, and Eni advanced 1.3% to $29.92. The Energy Select Sector SPDR ETF (XLE) has risen 0.4% to $61.77.