| TOTAL Beats on Q1 Earnings; Low Price Hits Revenues - Analyst Blog | |
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Integrated oil and gas company TOTAL S.A. TOT reported first-quarter 2015 operating earnings of $1.13 per share (€1.00 per share), surpassing the Zacks Consensus Estimate by 76.6%. Operating earnings were however 48.2% lower than the year-ago earnings of $1.46 per share (€1.07 per share).
Total Revenue
Total revenues in the reported quarter were $42.31 billion, down 30% from $60.68 billion in the year-ago quarter. Total revenues were also lower than the Zacks Consensus Estimate by 32.5%
Production
Total hydrocarbon production during the first quarter 2015 averaged 2,229 thousand barrels of oil equivalent (kboe) per day, up 10% from year-ago levels. The increase was particularly due to the new ADCO concession in the United Arab Emirates and production startup in various global assets.
In the first quarter, liquids production averaged 1,240 thousand barrels (MBbls) per day, up 20% from the prior-year quarter. Liquid production improved in all geographical locations except Europe.
Gas production during the quarter was 6,312 thousand cubic feet (Mcf) per day, up 1% year over year. Soft performance from the Middle East, Africa and South America was more than offset by the increase in gas production in North America, Europe and Asia-Pacific.
Realized Price
In first-quarter 2015, the realized price for Brent decreased 50% to $53.9 per barrel from $108.2 per barrel in first-quarter 2014. The average realized liquid price dropped 52% to $49.5 per barrel from $102.1 per barrel in first-quarter 2014.
Realized gas prices in first-quarter 2015 decreased 24% year over year to $5.38 per Mbtu. Realized hydrocarbon prices decreased 43% to $41.8 per barrel of oil equivalent (boe) from $73.4 per boe a year ago.
The ongoing softness in commodity prices was due to a drastic drop in global oil prices from the second half of 2014. This is expected to continue in 2015 as falling demand will be exacerbated by a supply glut.
Financial Update
Cash and cash equivalents as of Mar 31, 2015 were $25.1 billion compared with $22.8 billion as of Mar 31, 2014.
The net debt-to-equity ratio was 28.2% at the end of first-quarter 2015, down from 31.3% at the end of 2014.
TOTAL’s cash flow from operation at the end of first-quarter 2015 was $4.39 billion, down 17.8% from $5.34 billion a year ago. The decline was primarily due to a fall in net income.
Sale and Purchase of Assets
During the first quarter, TOTAL acquired assets worth $2.49 billion. The investments included a carry agreement in the Utica basin in the U.S and renewal of licenses in Nigeria.
TOTAL disposed of assets worth $2.74 billion in the reported quarter, comprising the sale of interest in OML 18 and 29 in Nigeria and sale of Bostik and transportation rights in the Ocensa Pipeline in Columbia.
Upcoming Releases
Chevron Corporation CVX is slated to release its first-quarter 2015 results on May 1. The Zacks Consensus Estimate is pegged at 74 cents.
ExxonMobil Corp. XOM is slated to release its first-quarter 2015 results on Apr 30. The Zacks Consensus Estimate is pegged at 80 cents.
Royal Dutch Shell plc RDS.A) is slated to release its first-quarter 2015 results on Apr 30. The Zacks Consensus Estimate is pegged at 70 cents.
Our View
The oil and gas story took a turn for the worse in the latter half of 2014 with a freefall in prices. TOTAL has decided to cut down on operating costs to cope with the difficult situation.
The company plans to start eight new projects in the Upstream segment, with a few of them having already started operations in the first quarter. TOTAL is working its way to adapt to the decline in commodity prices by starting new projects that have a lower breakeven.
Even though the new startups helped the company to increase production in the first quarter, the benefit could not be realized due to lower realized prices.
TOTAL’s second-quarter production is expected to be impacted by seasonal maintenance activity in Norway, Nigeria and the United Kingdom. In addition, softness in commodity prices will continue to affect net income in the second quarter as well.
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Exxon Mobil is a and oil producing company based in United states of america. Exxon Mobil is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is US$ 485.5 billions as of today (€ 436.4 billions). Its stock quote reached its lowest recent point on March 14, 1997 at US$ 100.12, and its highest recent level on September 18, 2024 at US$ 114.58. Exxon Mobil has 4 237 270 016 shares outstanding. |