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$52.95 -0.22 (-0.41%)
10/7/2008 1:43 PM

Total SA. (ADR) (TOT)

CAPS Rating:
****

The Company engages in all aspects of the petroleum industry including upstream operations, oil & gas exploration, development & production, downstream operations, refining and marketing and the trading & shipping of crude oil and petroleum products.

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Avatar NtscrbEnergy (97.24) Submitted: 12/22/06 7:44 AM : Outperform Start Price: $67.93 TOT Score: 4.98

Total SA (TOT) is a French oil giant and is among the top-notch in the global oil and gas integrated sector. The company has heavily invested in the exploration and production business eyeing the huge potential in the segment. The company’s business is across the entire oil and gas value chain giving it a hedge against volatile oil prices.

The company is well diversified with operation in over 130 countries across the globe. However, a substantial amount of current production comes from North Sea, which is a mature area. Nevertheless, TOT has a lot of upcoming projects in the Middle-East and West Africa, which are considered to be very promising. Further, it has over 80 years of experience working in these areas. In addition, TOT has entered Iran, which has a great potential and is a region where US companies are not allowed to currently explore. Additionally, the company has plans to start production from several large fields in Angola, a diamond in the company’s portfolio. With high success rates and aggressive expansion strategies, the production levels will remain high, going ahead in 2007. Adding to the positives, the company has less exposure in the US, where the production rates are continuously falling, due to it being categorised as a matured area.

On the flip side the labour problems in the company’s refinery segment, which had earlier halted production is posing as a threat and has to be looked seriously. Further, the chemical business, which is TOT’s least profitable business, employs the majority of the workers. However, on the back of strong fundamentals coupled with growth oriented strategies, the stock price will climb the ladder swiftly.

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Avatar NtscrbEnergy (97.24) Submitted: 6/05/07 5:22 AM

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Total SA, one of the world's biggest oil companies, reported a decline of 17% in net income in the first quarter of 2007 due to lowering of oil prices. Production volumes were flat compared to a year ago. On a sequential basis, comparing the first-quarter 2007 to the fourth-quarter 2006, volumes increased by 1%. The main positive contribution to this growth was the Dalia field in Angola, which started up in mid-December and contributed close to 50,000 barrels per day to first-quarter production.

A rise of 4.7% is expected in 2007 and over 5% per year in 2008-2010, on new field start-ups, particularly in Africa. The company made 10 new discoveries in the first quarter, mostly in West Africa and also acquired new exploration acreage in Indonesia, Australia, Alaska, and Angola. Due to project timing, the greatest impact of these start-ups is expected in 2007, as significant new production is slated to come on stream following the ramp-up of production at Dalia in Angola in the first quarter, and the giant Dolphin gas project in the third quarter. Continued strong performance in the intermediate term is expected, reflecting TOTAL’s high-quality exploration and development program.

Outlook for the integrated sub-oil industry is positive. Oil prices are expected to remain relatively high and volatile in 2007 and 2008, with a strong global oil demand which is expected to grow 1.85% (an increase of 1.56 million b/d) in 2007. About 2/3 of the growth is expected to be concentrated in North America, China and the Middle East. Considering the positive industry prospects and new projects and discoveries, TOTAL is expected to perform well in the future.

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