Integrated oil and gas company
) reported fourth-quarter 2012 operating earnings of $1.76 per
share (€1.36 per share), falling short of the Zacks Consensus
Estimate by 2 cents. Operating earnings of the company were 8%
ahead of the year-ago earnings of $1.62 (€1.20 per share).
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Total's 2012 operating earnings were $7.01 per share (€5.45 per
share), down 5% from $7.05 per share (€5.06 per share) reported
in 2011. The results of the company were a dime lower than the
Zacks Consensus Estimate of $7.11.
Total revenue was $64.66 billion (€47.86 billion), up 1% from
$64.02 billion (€47.49 billion) in the year-ago quarter.
TOTAL reported full year 2012 revenue of $257.03 billion (€200.06
billion) versus $257.09 billion (€184.69 billion) in 2011. The
revenue in 2012 was in line with the prior-year period (up 8.0%
Production and Realized Price
Total hydrocarbon production during the fourth quarter 2012
averaged 2,293 thousand barrels of oil equivalent (kboe) per day,
down 4% year over year. Output during the quarter was negatively
impacted by the ongoing security conditions in Africa, accidents
in U.K., flooding in Nigeria and normal declines and maintenance
Total hydrocarbon production during 2012 averaged 2,300 kboe per
day, down 2% from 2011 levels. The factors which affected the
fourth quarter production also impacted the annual production
level, and the changing prices of hydrocarbon also impacted
Liquids production during the quarter averaged 1,206 thousand
barrels (MBbls) per day, down 3% year over year. For 2012,
liquids production averaged 1,220 MBbls per day, in line with the
prior year. Liquid production got a beating in Europe, which
pulled down the overall production level.
Gas production during the quarter was 5,897 thousand cubic feet
(Mcf) per day, down 5% year over year and for 2012 was 5,880
thousand cubic feet (Mcf) per day, down 4% year over year. Gas
volumes were impacted by a poor performance from the majority of
its producing areas while strong performance from the CIS region
marginally offset the decline.
Total refinery throughput for 2012 was 1,786 MBbls per day versus
1,863 MBbls per day in 2011. The yearly decline was mainly due to
the shutdown of the Normandy refinery and closure of the Rome
refinery in the third quarter.
The realized price for Brent in 2012 was $111.7 per barrel versus
$111.3 per barrel in 2011. The average realized liquid price
increased 3% to $107.7 per barrel from $105 per barrel in 2011.
Realized gas prices for 2012 increased 3% year over year to $6.74
per Mbtu. Realized hydrocarbon prices in 2012 increased to $77.3
per barrel of oil equivalents (boe) from $74.9 in 2011.
Cash and cash equivalents of TOTAL as of December 31, 2012, were
$20.4 billion (€15.46 billion) versus $18.2 billion (€14.02
billion) at 2011 end.
The net debt-to-equity ratio was 21.4% at the end of 2012 versus
23.0% at the end of 2011.
TOTAL's cash flow from operation at the end of 2012 was $28.85
billion, up 6.0% from the 2011 level of $27.19 billion.
Sale and Purchase of Assets
During 2012, TOTAL made acquisitions worth $4.0 billion (€3.1
billion). The investments were made to acquire interest in
exploration and production licenses in Uganda, an additional
interest in Novatek, minority interest in Fina Antwerp Olefins
and carry agreement in the Utica basin in the US.
In 2012, TOTAL disposed of assets worth $5.9 billion (€4.6
billion), comprising of the sale of TOTAL's remaining interest in
Sanfoli, upstream assets in Nigeria, a portion of the Gassled
pipeline in Norway, and interest in Pec-Rhin and Geostock in
TOTAL's net investment in 2012 was $21.9 billion, down 1% from
$22.2 billion in 2011 due to lower acquisition expenses in the
The net investment budget for TOTAL in 2013 is $22 billion, more
or less at par with the two preceding years. The organic
investment plan is $28 billion out of which 80% is earmarked for
the Upstream segment.
The exploration budget for 2013 is $2.8 billion, with new
drilling planned in Ivory Coast, Gabon, Kenya and Brazil.
TOTAL's strategy is to increase its production level by 3% on
average every year in the 2011- 2015 period. The company expects
its 2013 production to be driven by the start-ups in 2012 and
2013, including Anguille in Gabon, Angola LNG, Kashagan in
Kazakhstan, and the extension of OML in Nigeria.
Other Company Releases
) fourth-quarter 2012 earnings of $2.20 per share surpassed the
Zacks Consensus Estimate of $1.99 by 10.6%.
) fourth-quarter earnings per share came in at $3.06, ahead of
the Zacks Consensus Estimate of $3.03.
) fourth-quarter 2012 adjusted earnings of 84 cents per ADR
comfortably surpassed the Zacks Consensus Estimate of 68 cents.
TOTAL continues to perform well and leverage its strong financial
position. The aggressive exploration strategy alongside
acquisition of new drilling licenses aids the company to add to
its reserve base. The proved reserve of 11,368 Mboe for 2012
represents two decades of reserve life based on the current
production level of the company.
However, the company has been plagued by the ongoing economic
weakness in Europe and the prevailing insecurity in Africa. We
remind investors that a substantial portion of the company's
production comes from these regions.
Yet, the company continues to unlock value from its non-core
midstream and downstream assets and hive assets on which it has
low working assets. The fund generated from divestment will allow
the company to concentrate on its core operations. The initiative
taken by the company to increase shareholders' worth is
appreciable. TOTAL S.A. retains a Zacks Rank #2 (Buy).
France-based TOTAL is one of the largest publicly traded,
globally integrated oil and gas companies based on production
volumes, proved reserves and market capitalization. The company
has exploration and production operations across five continents.