Total Share Discussion Threads

[waldron] 03/11/2017 08:29

TechnipFMC has won a contract for subsea work off Malaysia on Murphy Sabah Oil’s Block H gas development project.

The contract covers the manufacture and installation of umbilicals, risers and flowlines and the transportation and installation of subsea hardware and controls.

Hallvard Hasselknippe, president, subsea projects at TechnipFMC, said: “We are proud to have been awarded this contract from Murphy Sabah Oil which demonstrates the strength of our solutions and deepwater capabilities in Malaysia.”

[ariane] 01/11/2017 11:52

BP Signals Optimism With New Buybacks -- WSJ
01/11/2017 7:02am
Dow Jones News

Total (EU:FP)
Intraday Stock Chart

Today : Wednesday 1 November 2017
Click Here for more Total Charts.

By Sarah Kent

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 1, 2017).

LONDON -- BP PLC on Tuesday said it would restart its share buyback program after posting healthy third-quarter earnings, the latest signal that the oil industry has found its footing amid a modest crude-price recovery.

The U.K. oil giant said its strengthened financial position allowed it to begin a share repurchase program in the final three months of 2017, though it didn't put a value on future buybacks. With Brent crude, the international benchmark, trending over $60 a barrel for the first time since 2015, BP's move ranks among the first actions showing big oil companies are healthy enough to sweeten the pot for investors who had soured on the sector.

BP hasn't had a share buyback program since oil prices crashed in 2014, falling from over $114 a barrel to less than $28 a barrel in early 2016. Other companies like Exxon Mobil Corp. and Chevron Corp. have also moved away from the practice while they grappled with the oil-price slump.

BP said it could restart buybacks because it had driven its costs so low that it can generate enough cash to cover its spending commitments and dividend at $49 a barrel. Investors are increasingly looking at this break-even metric for signs big oil companies have succeeded in shifting their financial frameworks to operate profitably at lower oil prices.

"We're confident we can balance the books at $50 next year, and even manage as low as $45. That's what gave us the confidence to raise the idea of buybacks with the board," Chief Financial Officer Brian Gilvary said in an interview.

Overall, BP's replacement cost profit -- a number similar to the net income that U.S. companies report -- was $1.4 billion in the third quarter, down slightly from $1.7 billion in the same period a year earlier. But its underlying financials were strong, sending its intraday share price to highs not seen since three years ago, when oil prices were over $100 a barrel. BP shares closed up 1.7% Tuesday in London.

The company's refineries reported their highest underlying earnings in five years, its exploration and production unit returned to profit, and the company's oil and gas output surged 14% in the third quarter.

BP is the latest major Western oil company to report profitable results for the third quarter. Last week, Exxon and Chevron both reported increases in third-quarter profits of 50% compared with the prior year. French oil company Total SA's earnings jumped 40%. Royal Dutch Shell PLC will report earnings on Thursday.

BP's production rose year-over-year to 3.6 million barrels a day in the quarter, as new projects in Australia, Trinidad and Oman began production -- the latest in a series of developments expected to start up by 2020 that will bring the company's production back up to levels last seen before its fatal blowout in the Gulf of Mexico in 2010.

BP is still working to move past the disaster, with the final tab growing past $60 billion. But with most of those payments now made, the company has signaled it is ready to grow again and is able to do so, even in a low oil-price environment.

Investors have been wary of big oil companies in recent years, concerned they couldn't generate enough cash to cover big dividends.

The move "is an important signal on the confidence of the board and management on cash flow," Barclays said in a note on Tuesday.

Share buybacks are popular with investors because they reduce the amount of company stock in circulation and tend to boost share value.

For BP, the buybacks help offset perceived weakness in its dividend. The company uses a so-called scrip dividend program, giving shareholders the option to take their dividend in stock and alleviating the cash burden of dividends.

Such programs proved helpful to oil companies during the downturn, but they also dilute the value of shareholdings. Investors are increasingly eager to see companies fully cover their dividends with cash.

So far Norway's Statoil ASA is the only major oil company to announce plans to halt the scrip program altogether, and BP remains among the first to take steps to offset dilution. Mr. Gilvary said BP had discussed the possibility of removing the scrip program altogether with its board, but concluded some investors liked the option.

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

November 01, 2017 02:47 ET (06:47 GMT)

[waldron] 30/10/2017 17:34

TOTAL : Credit Suisse relève son objectif de cours

30/10/2017 | 15:16

Credit Suisse a relevé son objectif de cours sur Total de 44,5 à 46 euros tout en réitérant son opinion Neutre. Le broker a pris acte de résultats trimestriels conformes à ses attentes.

[grupo guitarlumber] 30/10/2017 17:05

Dividends for holders of Total shares traded on the Euronext Paris
December 19, 2017
Ex-dividend date for the 2nd 2017 interim dividend


- See more at:

[grupo] 29/10/2017 10:29

29/10/2017 | 9:32

PARIS (AWP / AFP) - CGG's shareholders vote Tuesday on the restructuring plan for the troubled oil services group, a crucial step for the company's survival and the rescue of thousands of jobs.

The shareholders are convened at 11:00 am near Paris to, among other things, authorize the financial instruments that will allow the management to implement its rescue plan.

The latter includes the debt restructuring of nearly $ 2.8 billion (about 2.4 billion euros) and a fundraising of up to $ 500 million.

The plan must result in a massive conversion of debt into shares. So that creditor funds (Boussard and Gavaudan, Contrarian Capital ...) will soon become the main shareholders of the company if the general meeting gives the green light.

The public bank Bpifrance, today the largest shareholder with more than 10% of voting rights, said it would vote in favor of the plan. The asset management company, DNCA, another major shareholder and also creditor, will do the same.

But the suspense remains certain since resolutions must receive the approval of two-thirds of the votes.

The plan "dilutes the presence of capital Bpifrance, it is undeniable, however, its deleveraging gives medium-term prospects for the company, and we have achieved significant progress in commitment of the company and creditors," explained the public bank.

CGG has committed until the end of 2019 to maintain jobs in France and the decision centers located in the country will have to remain there at least until the end of 2022.

One way to avoid the fate of Technip, another oil services company that, since its merger with the American FMC Technologies, saw his family spend essentially on the other side of the Atlantic.

Some creditors have also agreed not to be represented on CGG's board of directors until they individually hold 10% of the group's capital.

In addition, despite its future dilution to CGG's capital, Bpifrance will remain on the group's board of directors.

- "least harm" -

The former Compagnie générale de géophysique employs around 6,000 people, including 1,600 in France. It sells equipment and works in the acquisition and interpretation of data for the oil sector.

For example, she produces underground ultrasounds for oil companies looking for black gold.

But the whole sector was hit hard by the drop in crude prices a little over three years ago.

CGG's customers - especially the big "majors" like Shell or Total - began to cut their expenses.

In this very difficult context, CGG has already achieved a difficult internal reorganization - drastically reducing its fleet of boats and separating itself from half of its workforce - and now hopes to complete the financial component.

Justice will still have to decide in November on the approval of the plan.

On this occasion, a group of creditors carrying convertible bonds - who feel aggrieved - wants to request the rejection of the bailout.

But management and unions feel that the company has no other choice than the current plan.

If rejected, CGG would enter a period of high uncertainty, with the prospect of months of complex renegotiations in France and the United States, and customers tempted to go elsewhere.

The plan is "a lesser evil", knowing that "the alternatives are much more unfavorable", said Thierry Coléou, CFDT delegate, interviewed by AFP.

And once its restructuring is complete, the group hopes to benefit from the relative improvement in oil prices.

"We have returned to a position that allows us to spend off-peak periods and be able to restart later," said Thierry Coléou.

jmi / mhc / fka / php

[waldron] 28/10/2017 08:50

Morgan Stanley: Oil Stocks Are Very Interesting Now
By Tsvetana Paraskova - Oct 27, 2017, 6:00 PM CDT NYSE

The oil industry is a pretty interesting sector now as it has lagged year to date, it’s under-owned, and has much better value historically, Andrew Sheets, chief cross asset strategist at Morgan Stanley, told CNBC on Friday, joining the growing chorus of other analysts who have recently turned bullish on European and U.S. oil stocks.

The oil sector has lagged the move in oil prices which have been creeping higher and now sit higher than a year ago, Sheets said.

The industry is also interesting because now it is in a very different part of the cycle compared to the very aggressive capital spending when oil prices were $100 per barrel. Now spending is being rolled back and efficiencies have been found, according to Morgan Stanley’s strategist.

Morgan Stanley upgraded the oil sector in Europe to “overweight221; a couple of weeks ago, and the bank is also “overweight221; on the sector in the U.S., Sheets noted.

“We do think it’s a very interesting sector that is both under-owned and historically much better valued than a lot of other sectors,” the strategist told CNBC.

There is a kind of difficult window for oil prices in the first quarter next year, when new projects and supply is due to come to the market, but demand growth this year has been “incredibly strong.” Morgan Stanley’s current assumption is that the strength in global demand will be enough to offset some of the supply coming online and ultimately, lend some kind of support to oil prices, Sheets said.

Related: Saudi Rhetoric Sends Oil Prices To Two-Year High

Morgan Stanley is joining Goldman Sachs in its view on oil stocks. Earlier this month, Goldman said that shares in oil companies had underperformed the recent oil price rally, so some of those stocks were set to rise in a long-term oil price of $50-55. Goldman Sachs has also recently turned bullish on European majors and on Big Oil’s competitive positioning.

As early as in August, analysts were saying that the oil sector globally is an attractive play for investors right now, with “great value in supermajor oil companies.”

By Tsvetana Paraskova for Oilprice.com

[waldron] 27/10/2017 17:05

Total: ends up, an analyst confirms his opinion.
Total (EU: FP)
Intraday Chart of the Action

Today: Friday 27 October 2017
More charts from the Total Exchange
(CercleFinance.com) - The stock ends the session up 1.5% after the announcement of its quarterly accounts. Jefferies analysts have confirmed their advice to 'keep' on the stock. The consulting firm emphasizes 'overall outlook unchanged' and also confirms its target price of 48 euros.

Total's adjusted net income of $ 2.7 billion in Q3 is rated "in line with the middle of the consensus range" by a research note. 'The downstream branch of Total has performed well in Q3 2017, even if the Upstream has been a little weaker', commented specialists, who also note the strong generation of organic free cash flow (more than two billion dollars ).

"Management continues to rejuvenate the asset portfolio, and we believe its strategic plan is well designed," says Jefferies.

As Total had already announced its medium-term objectives during the investor day organized in late September, not much has changed in this area. Even though, Jefferies says, cost reductions are progressing well, and the $ 3.6 billion goal set in September may well be exceeded. In short, 'still a solid publication for Total'.

[the grumpy old men] 27/10/2017 15:42

Total: what program for the dividend?
Photo credit © Total

(Boursier.com) - The Board of Directors of October 26th decided to fix at 0.62 euro per share Total the amount of the 3rd installment for the 2017 financial year. This deposit is of an amount identical to the 1st and 2nd installments proposed for the 2017 financial year. It will be posted on March 19, 2018.

The Board of Directors will meet on March 14, 2018 to:
- decide to distribute this 3rd interim dividend;
- propose, under the conditions set by the 4th resolution of the Combined General Meeting of May 26, 2017, the option of paying this installment in new shares of the company;
- fix the issue price of each new share at a discount between 0% and 10% on the average of the first prices quoted on Euronext Paris during the 20 trading days preceding the Board of Directors, less the amount of this down payment ;
- set the option period for the payment of the interim dividend in new shares between March 19, 2018 and March 28, 2018 inclusive;
- decide whether to pay in cash or new shares, depending on the option chosen, as of April 9, 2018.

[la forge] 27/10/2017 14:33

Total's profit jumps as majors rebound from deep slump
By Francois de Beaupuy on 10/27/2017

PARIS (Bloomberg) -- Total posted the highest earnings from pumping oil and gas in more than two years, illustrating the improving fortunes of an industry that’s endured the deepest downturn in a generation.

Total’s earnings followed surprisingly strong profits from ConocoPhillips and Statoil, driven by a combination of higher crude prices and deep cost cuts. Exxon Mobil and Chevron, the largest U.S. oil majors, report their earnings later Friday. The global imbalance between crude supply and demand that’s weighed on prices for three years is finally dissipating, the French energy giant said.

“The group took full advantage of the favorable environment,” CEO Patrick Pouyanne said in a statement on Friday. While the situation is improving, inventories are still high and the market will remain volatile, so Total’s strategy is to continue reducing the oil price it needs to break even, he said.

An OPEC-led effort to shrink a global oil glut finally gained traction in the third quarter, when benchmark Brent crude prices were 11% higher than the same period in 2016. Total also benefited from oil and gas production that rose 6% to 2.58 MMboepd.

The company reported third-quarter adjusted net income of $2.67 billion, a 29% increase from a year earlier and in line with estimates. Adjusted net operating income from its exploration and production unit rose 84% to $1.44 billion, the highest level since the second quarter of 2015.

Total shares rose 1.6% to 47.3 euros in Paris, paring their year-to-date decline to 2.9%.

Since 2014, major oil companies have prioritized one thing -- cutting spending. They’ve laid off thousands of workers, canceled or deferred projects and put intense pressure on their suppliers and contractors to reduce their prices. Despite the recent recovery, Brent is still about half the level of three years ago, so there’s little sign that this focus is shifting.

Total expects to exceed its target of reducing annual costs this year by $3.6 billion compared with 2014, Pouyanne said. The company is aiming to be able to fully fund both its dividends and capital expenditure by 2019 with crude at $50/bbl, ending a period of several years where free cash flow fell short of spending.

Italy’s Eni SpA, which posted earnings on Friday that fell short of expectations, said it’s on track to achieve that milestone if oil rises to $60 this year. Brent crude, the international benchmark, traded near $59/bbl on Friday after closing at the highest price in more than two years.

[waldron] 27/10/2017 10:39

By Sarah Kent

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 27, 2017).

The world's biggest oil companies have a suddenly popular measure for success: breaking even.

Once obscure and little noted, the break-even number has become an obsession for investors in oil giants such as Exxon Mobil Corp., BP PLC and Chevron Corp. as crude prices stay mired between $50 and $60 a barrel. At its simplest, the metric represents the oil price that a company needs to generate enough cash so it can cover its capital spending and dividend payouts.

Brent crude was trading at just below $60 a barrel this week, down from over $114 in June 2014.

BP says its break-even was $47 a barrel in the first half of the year, and the company is targeting between $35 and $40 a barrel by 2021, assuming prices stay about where they are today. Overall, Europe's biggest oil companies have cut break-evens to around $50 a barrel, according to Barclays. Exxon doesn't release a break-even but has succeeded in covering its costs with cash from operations for the last three quarters, when international benchmark Brent crude averaged just over $51 a barrel, according to Barclays.

Investors focused on the healthy dividends that make oil-company stocks appealing say they will be watching for news about break-even prices as Exxon, Chevron and Total SA prepare to announce third-quarter earnings on Friday, and BP and Royal Dutch Shell PLC next week.

"It's a crucial thing we look at," said Rohan Murphy, energy analyst at Allianz Global Investors, which holds stocks in BP and other large oil companies. "If the oil price were $70 it wouldn't matter so much, but at the moment we're on a knife edge, so it matters more."

The industry's intense focus on the break-even represents a stark change from the era of rising oil prices, when the emphasis often was more on companies' ability to increase production rather than to generate cash.

BP's share price slumped 4% in February after the company said it needed oil to hit $60 a barrel to break even this year. Six months later, BP said spending cuts allowed the company to break even at $47 a barrel in the first half. The stock moved up 2%. The company has kept its dividend unchanged throughout the downturn.

At Total's investor day last month, the phrase "break even" came up around 30 times.

Big oil companies say they have made progress in cutting costs since 2014, when oil prices entered a long downturn. The companies say they can maintain those lower levels of spending, bring down their break-even costs further and begin again to expand their operations -- all without relying on an oil-price recovery.

"The break-even cost of oil and gas companies is going to the $40s and $30s today," BP Chief Executive Bob Dudley told the Oil & Money conference in London this month. "It's actually healthy. I think $100 a barrel was not healthy."

Investors, however, remain nervous about the viability of their dividends. While big oil companies are back in black, many of them are still not generating enough cash to cover the payouts, despite ambitious targets to lower break-even prices.

The methods companies use when disclosing their break-even prices often vary from company.

Chevron says it can break even this year at $50 a barrel -- if revenue from its asset sales is included. Total says it will be able to break even at less than $30 a barrel in 2019 -- excluding its dividend costs.

Total, Shell and other companies use so-called scrip programs that allow them to pay a portion of their dividend in company stock, which helps them bring down the oil price they need to cover spending. While effective, the tactic isn't sustainable in the long-term without diluting investors' holdings.

Companies also often refer to project-specific break-evens, another metric that has new currency since prices crashed. Shell has said it is looking at new projects that can be profitable even if oil is at less than $40 a barrel, but that doesn't reflect the overall price the company needs to cover spending and dividends.

U.S. shale-oil players have faced particular criticism from investors over how they define project break-evens, sometimes not accounting for all associated costs, such as the amount they pay to lease land. Most shale companies claim their wells generate a 20% rate of return or higher, even at today's prices. Yet in the last three years, almost none has posted a positive quarterly net income.

Few investors cared about the break-even when oil prices were $100 a barrel or more. Back then, the industry was consumed with finding new sources of oil, resulting in spending that caused the break-even for big European companies to balloon to $152 a barrel in 2013, Barclays says.

Now, companies that once chased megaprojects are using new technology to eke out more barrels and lower costs.

BP said it expects production costs this year to be 40% lower than in 2013. Chevron is working to bring down its break-even to a point where it can sustain the company's decadeslong tradition of dividend increases. Shell is moving toward a lower debt target that will allow it to turn off its scrip program and commence share buybacks.

In a sign that things are improving, Norway's Statoil ASA said Thursday it will remove its scrip program in the fourth quarter, fully covering its dividend with cash.

Total has said it would be able to cover its full cash dividend at $50 a barrel in 2019.

""The world has completely changed," Total Chief Executive Patrick Pouyanné told reporters earlier this month.

--Lynn Cook contributed to this article.

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

October 27, 2017 02:47 ET (06:47 GMT)

[waldron] 27/10/2017 10:26

27/10/2017 | 11:17
Jefferies analysts confirmed their advice to 'keep' the Total share this morning, after the French oil and gas major reported on its quarterly accounts. The consulting firm emphasizes 'overall outlook unchanged' and also confirms its target price of 48 euros.

Total's adjusted net income of $ 2.7 billion in Q3 is rated "in line with the middle of the consensus range" by a research note. 'The downstream branch of Total has performed well in Q3 2017, even if the Upstream has been a little weaker', commented specialists, who also note the strong generation of organic free cash flow (more than two billion dollars ).

"Management continues to rejuvenate the asset portfolio, and we believe its strategic plan is well designed," says Jefferies.

As Total had already announced its medium-term objectives during the investor day organized in late September, not much has changed in this area. Even though, Jefferies says, cost reductions are progressing well, and the $ 3.6 billion goal set in September may well be exceeded. In short, 'still a solid publication for Total'.

[ariane] 27/10/2017 09:57

Total SA (FP.FR) said Friday that its third-quarter net income rose almost 40% compared with a year earlier, citing higher Brent oil prices and a low-cost environment.

Net income was $2.72 billion compared with $1.95 billion in the year-earlier period, while revenue increased 15% to $43.04 billion, the company said.

Total said that adjusted net operating income in its exploration and production division increased by 84% to $1.43 billion. Adjusted net operating income from refining and chemicals was 11% higher than the year-earlier period at $1.02 billion, while the marketing and services division's adjusted net operating income rose 14% to $506 million, Total said.

Hydrocarbon production during the third quarter was 2.58 million barrels of oil equivalent a day, the company said.

The French oil-and-gas company generated $2.1 billion of cash flow after investments, said Chief Executive Patrick Pouyanne, adding that Total took "full advantage" of the favorable market environment thanks to its strategy aimed at reducing its break-even point.

Mr. Pouyanne said that Total's organic investments were $3.1 billion, in line with its target of $14 billion for the year. He added that the company's cost reduction will amount to more than $3.6 billion, surpassing the target for the year.

Total declared a dividend of EUR0.62 per share, payable in April 2018.



Write to Marc Bisbal Arias at [e-mail]



(END) Dow Jones Newswires

October 27, 2017 03:05 ET (07:05 GMT)

[ariane] 27/10/2017 08:28

Total S.A. Total Announces Its 2017 Third Interim Dividend
27/10/2017 7:20am
UK Regulatory (RNS & others)


TIDMTTA



The Board of Directors of Total (Paris:FP) (LSE:TTA) (NYSE:TOT) met on October 26, 2017, and approved a 2017 third interim dividend of 0.62 euro per share. This interim dividend, unchanged compared to the proposed 2017 first and second interim dividends, is payable in euro according to the following timetable:


Ex-dividend date March 19, 2018
Record date March 16, 2018
Payment date in cash April 9, 2018
or shares issued in lieu of cash



The Board of Directors will meet on March 14, 2018, to:



-- declare the 2017 third interim dividend;

-- offer, under the conditions set by the fourth resolution of the

Combined Shareholders' Meeting of May 26, 2017, the option for

shareholders to receive the 2017 third interim dividend in cash or in

new shares of the Company;


-- set the issuance price of the new shares with a discount between 0%

and 10% based on the average opening price on the Euronext Paris for

the 20 trading days preceding the Board of Directors' meeting, and

reduced by the amount of the 2017 third interim dividend;


-- set the period for shareholders to elect to receive the payment in new

shares from March 19, 2018 to March 28, 2018, both dates inclusive; and


-- authorize the payment of the dividend in cash or the delivery of

shares issued in lieu of the dividend in cash on April 9, 2018.



Holders of Total's American Depositary Receipts ("ADRs") will receive the 2017 third interim dividend in dollars based on the then-prevailing exchange rate according to the following timetable:


ADR ex-dividend date March 15, 2018
ADR record date March 16, 2018
ADR payment date in cash April 16, 2018
or shares issued in lieu of cash



Registered ADR holders may also contact JP Morgan Chase Bank for additional information. Non-registered ADR holders should contact their broker, financial intermediary, bank or financial institution for additional information.



About Total



Total is a global integrated energy producer and provider, a leading international oil and gas company, a major player in low-carbon energies. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.



* * * * *

[waldron] 26/10/2017 12:40

Amid Low Prices, Oil Giants Gush About Breaking Even
26/10/2017 10:59am
Dow Jones News

BP (LSE:BP.)
Intraday Stock Chart

Today : Thursday 26 October 2017
Click Here for more BP Charts.

By Sarah Kent

The world's biggest oil companies have a suddenly popular measure for success: breaking even.

Once obscure and little noted, the break-even number has become an obsession for investors in oil giants such as Exxon Mobil Corp., BP PLC and Chevron Corp. as crude prices stay mired between $50 and $60 a barrel. At its simplest, the metric represents the oil price that a company needs to generate enough cash so it can cover its capital spending and dividend payouts.

BP says its break-even was $47 a barrel in the first half of the year, and the company is targeting between $35 and $40 a barrel by 2021, assuming prices stay about where they are today. Overall, Europe's biggest oil companies have cut break-evens to around $50 a barrel, according to Barclays. Exxon doesn't release a break-even but has succeeded in covering its costs with cash from operations for the last three quarters, when international benchmark Brent crude averaged just over $51 a barrel, according to Barclays.

Investors focused on the healthy dividends that make oil-company stocks appealing say they will be watching for news about break-even prices as Exxon, Chevron and Total SA prepare to announce third-quarter earnings on Friday, and BP and Royal Dutch Shell PLC next week.

"It's a crucial thing we look at," said Rohan Murphy, energy analyst at Allianz Global Investors, which holds stocks in BP and other large oil companies. "If the oil price were $70 it wouldn't matter so much, but at the moment we're on a knife edge, so it matters more."

The industry's intense focus on the break-even represents a stark change from the era of rising oil prices, when the emphasis often was more on companies' ability to increase production rather than to generate cash.

BP's share price slumped 4% in February after the company said it needed oil to hit $60 a barrel to break even this year. Six months later, BP said spending cuts allowed the company to break even at $47 a barrel in the first half. The stock moved up 2%. The company has kept its dividend unchanged throughout the downturn.

At Total's investor day last month, the phrase "break even" came up around 30 times.

Big oil companies say they have made progress in cutting costs since 2014, when oil prices entered a long downturn. Brent crude was trading at just below $60 a barrel this week, down from over $114 in June 2014.

The companies say they can maintain those lower levels of spending, bring down their break-even costs further and begin again to expand their operations--all without relying on an oil-price recovery.

"The break-even cost of oil and gas companies is going to the $40s and $30s today," BP Chief Executive Bob Dudley told the Oil & Money conference in London this month. "It's actually healthy. I think $100 a barrel was not healthy."

Investors, however, remain nervous about the viability of their dividends. While big oil companies are back in black, many of them are still not generating enough cash to cover the payouts, despite ambitious targets to lower break-even prices.

The methods companies use when disclosing their break-even prices often vary from company.

Chevron says it can break even this year at $50 a barrel--if revenue from its asset sales is included. Total says it will be able to break even at less than $30 a barrel in 2019--excluding its dividend costs.

Total, Shell and other companies use so-called scrip programs that allow them to pay a portion of their dividend in company stock, which helps them bring down the oil price they need to cover spending. While effective, the tactic isn't sustainable in the long-term without diluting investors' holdings.

Companies also often refer to project-specific break-evens, another metric that has new currency since prices crashed. Shell has said it is looking at new projects that can be profitable even if oil is at less than $40 a barrel, but that doesn't reflect the overall price the company needs to cover spending and dividends.

U.S. shale-oil players have faced particular criticism from investors over how they define project break-evens, sometimes not accounting for all associated costs, such as the amount they pay to lease land. Most shale companies claim their wells generate a 20% rate of return or higher, even at today's prices. Yet in the last three years, almost none has posted a positive quarterly net income.

Few investors cared about the break-even when oil prices were $100 a barrel or more. Back then, the industry was consumed with finding new sources of oil, resulting in spending that caused the break-even for big European companies to balloon to $152 a barrel in 2013, Barclays says.

Now, companies that once chased megaprojects are using new technology to eke out more barrels and lower costs.

BP said it expects production costs this year to be 40% lower than in 2013. Chevron is working to bring down its break-even to a point where it can sustain the company's decadeslong tradition of dividend increases. Shell is moving toward a lower debt target that will allow it to turn off its scrip program and commence share buybacks.

In a sign that things are improving, Norway's Statoil ASA said Thursday it will remove its scrip program in the fourth quarter, fully covering its dividend with cash.

Total has said it would be able to cover its full cash dividend at $50 a barrel in 2019.

""The world has completely changed," Total Chief Executive Patrick Pouyanné told reporters earlier this month.

Lynn Cook contributed to this article.

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

October 26, 2017 05:44 ET (09:44 GMT)