Renowned worldwide oil and natural gas exploration and
production company,
Total SA
(
TOT
) signed an agreement with the Bulgarian government for exploration
prospects in the offshore Khan Asparuh Block in the Black Sea.
The company will be the major operator in the concerned play
with 40% ownership. It has inked a deal with two other European
companies -- Austria's OMV Group and Spanish company Repsol S.A. --
to work on the permit with stakes of 30% each.
The Khan Asparuh Block stretches for 5490.37 square miles
(14,220 sq. km) and is situated 49 miles (80 kilometers) offshore
in the Black Sea with water depths in the range of 328 feet (100)
meters to 656 feet (200) meters. The Khan Asparuh is a natural gas
rich play and, according to preliminary estimates, it has an output
capacity of 500 billion cubic feet ("Bcf").
With increasing popularity of natural gas across the globe,
especially in the US, we believe the current exploration contract
in the Black Sea will accentuate Total's growth prospects. A
projected gradual rise in natural gas prices in the US markets will
also boost Total's top-line results.
Total periodically engages in strategic acquisitions to expand
its global asset base and propel its growth momentum. Recently,
Total's Philippines subsidiary acquired a 75% stake in the offshore
Block SC56 located in the Sulu Sea. The company also acquired a 35%
interest in two exploration blocks, Harir and Safen, from
Marathon Oil Corporation
(
MRO
) in Iraq.
The company's decision to increase its interest in the Ichthys
liquid natural gas ("LNG") project in Australia will enable it to
reap substantial benefit from the increasing demand for LNG in
Asia.
However, the stalemate in the European markets is expected to
keep natural gas prices under leash. Besides, geo-political
turmoil, unfavorable movement in currency and unplanned rig
accidents could offset potential growth catalysts.
Overall, we believe the company's aggressive exploration
strategies and diversified operations will fetch lucrative returns
in the future. This is reflected in its $2.5 billion exploration
investment plan for 2012.
The Zacks Consensus Estimates for the third quarter and
full-year 2012 currently stand at $1.70 per share and $6.75 per
share, respectively.
Numbering among Total's many competitors is
BP Plc
. (
BP
). The company holds a Zacks #3 Rank implying a short-term Hold
rating.
Based in France, TOTAL SA 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 spanning five continents.
BP PLC (BP): Free Stock Analysis Report
MARATHON OIL CP (MRO): Free Stock Analysis
Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
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