On April 4, we issued an updated research report on integrated
oil and gas company
). TOTAL stands to benefit from its global presence and its focus
on adding natural gas assets to its portfolio. However, TOTAL is
exposed to oil and gas prices, which are inherently volatile. Any
sustained decline in prices could impact results.
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TOTAL, a Zacks Rank #3 (Hold) stock, reported earnings of $1.48
per share in the fourth quarter, missing the Zacks Consensus
Estimate by 3.9%.
TOTAL's presence in over 130 countries, strong financial position
and exposure to young, high-yield regions give it one of the best
production growth profiles among the oil super majors. As a
result, the company's upstream assets have lower natural decline
rates and longer production lives, which give TOTAL a significant
competitive advantage over its peers.
In the last few years a major portion of TOTAL's production came
in from acquisitions. But an acquisition driven growth strategy
runs its risk. An inability to acquire accretive assets can tell
on TOTAL's growth plans.
The company continues with its systematic investment plans to
expand its global footprint. In 2014, TOTAL expects to spend $26
billion in organic investments to develop its worldwide
assets. Some of the development projects worth mentioning are
GLNG and Ichthys in Australia, Surmont and Fort Hills in Canada,
and the Ekofisk and Eldfisk areas in Norway.
TOTAL competes with the likes of
) among others for acquiring assets and licenses for the
exploration and production of oil and natural gas as well as for
the sale of manufactured products based on crude and refined oil.
Increasing competition can impact the company's sales, finally
eating into its margins and market share.