The FINANCIAL — Integrated oil and gas company TOTAL S.A. TOT reported third-quarter 2015 operating earnings of $1.17 per share (€1.06 per share), surpassing the Zacks Consensus Estimate of 72 cents by 62.5%. Operating earnings were however 25% lower than year-ago earnings of $1.56 per share (€1.17 per share).
Total Revenues
Total revenues in the reported quarter were $40.58 billion, down 33% from $60.36 billion in the year-ago quarter.
Production
Total hydrocarbon production during the third quarter 2015 averaged 2,342 thousand barrels of oil equivalent (kboe) per day, up 10% year over year. The increase was due to new project startups in various international assets and portfolio changes including the ADCO concession in the United Arab Emirates.
In the third quarter, liquids production averaged 1,241 thousand barrels (MBbls) per day, up 19% from the prior-year quarter. Liquid production improved primarily due to higher output from the Middle East.
Gas production during the quarter was 6,003 thousand cubic feet (Mcf) per day, up 2% year over year. Soft performance from the Middle East, North America and South America was more than offset by increasing gas production in Africa, Europe, Asia-Pacific and CIS.
Realized Price
In third-quarter 2015, the realized price for Brent decreased 50.4% to $50.5 per barrel from $101.9 per barrel in third-quarter 2014. The average realized liquid price dropped 53% to $44.0 per barrel from $94.0 per barrel in third-quarter 2014.
Realized gas prices in third-quarter 2015 decreased 30% year over year to $4.47 per Mbtu. Realized hydrocarbon prices decreased 47% to $36.6 per barrel of oil equivalent (boe) from $69.1 per boe a year ago.
Commodity prices have drastically dropped from the second half of 2014. Though a marginal improvement in oil prices was noticed in the third quarter, it was still way below prior-year levels. The softness in prices is expected to continue in 2015 as falling demand will be exacerbated by a supply glut.
Financial Update
Cash and cash equivalents as of Sep 30, 2015 were $25.85 billion compared with $24.3 billion as of Sep 30, 2014.
The net debt-to-equity ratio was 26.6% at the end of third-quarter 2015, down from 27.8% at the end of third-quarter 2014.
TOTAL’s cash flow from operation in third-quarter 2015 was $5.98 billion, down 22% from $7.64 billion a year ago.
Sale and Purchase of Assets
During the third quarter, TOTAL acquired assets worth $631 million. TOTAL disposed of assets worth $395 million in the reported quarter, including the coal mining assets of South Africa.
The company is also planning to sell more of its non-core assets and has selected six new assets for sale for a value of nearly $3 billion.
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