TotalEnergies SE has reported $5.7 billion in net income for the first quarter, up three percent compared to the same three-month period a year ago and 13 percent against the prior quarter, despite year-on-year and quarter-on-quarter declines in gas sales volumes and prices.
Adjusted net earnings, or net income excluding nonrecurring or extraordinary items, stood at $5.1 billion, down 22 percent by prior-year comparison and two percent sequentially. Adjusted earnings before income tax, depreciation and amortization totaled $11.5 billion. Cash flow from operations came at $2.2 billion, down 58 percent year-on-year and 87 percent quarter-on-quarter. TotalEnergies logged impairments of $644 million.
The French energy giant produced 2.5 million barrels of oil equivalent per day (MMboepd) in the January–March 2024 quarter. The figure is virtually unchanged against the prior quarter as the sale of TotalEnergies’ stakes in the Canadian oil sands offset newly added capacity in Brazil and Nigeria. The integrated energy company divested its interests in the Fort Hills and Surmont oil sands to ConocoPhillips Co. and Suncor Energy Inc. last year.
TotalEnergies also pointed to the Canadian disposals for a two percent year-over-year decrease in output.
Oil production including bitumen averaged 1.3 MMbopd in the first quarter of 2024, while gas production including condensates and associated natural gas liquids stood at 1.1 MMboepd. Liquefied natural gas (LNG) production stood at 492,000 boepd.
Downstream, TotalEnergies’ selling prices for LNG averaged $9.58 per million British thermal unit (MMbtu), down 28 percent year-on-year and seven percent quarter-on-quarter. Gas excluding LNG registered a realized price of $5.11 per MMbtu on average, down 43 percent year-on-year and 17 percent quarter-on-quarter.
TotalEnergies noted, “In the first quarter 2024, LNG sales decreased by 9 percent quarter-to-quarter, mainly due to lower demand in Europe as a result of milder winter weather and high inventories”.
“Volumes were also impacted by partial downtime at Freeport LNG in the United States this quarter”, it added.
TotalEnergies’ realized prices for liquids averaged $78.9 a barrel, up seven percent year-on-year but down two percent quarter-on-quarter.
TotalEnergies expects oil prices to remain strong across the globe. For the gas market, it expects demand in Asia to support LNG prices.
“Brent prices are strong at around $90/b at the start of the second quarter 2024, supported by elevated geopolitical tensions and by the OPEC+ decision to maintain production quotas through the second quarter 2024”, TotalEnergies said.
“These elevated prices are impacting refining margins, which had been elevated since the beginning of the year.
“Despite exiting winter at high gas storage levels, European gas prices have been trading within a range of $8 to $10/Mbtu [per million btu] at the beginning of the second quarter 2024. Recovering Asian LNG demand and limited global LNG capacity additions in 2024 support forward prices above $11/Mbtu for the 2024-2025 winter period.
“Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, TotalEnergies anticipated that its average LNG selling price should be between $9 and $10/Mbtu in the second quarter 2024”.
TotalEnergies put its output projection for the second quarter at 2.4 to 2.45 MMboepd, impacted by planned maintenance but partially compensated by ramp-ups in Brazil and Denmark.
Buoyed by its first quarter performance, TotalEnergies’ board of directors decided to distribute EUR 0.79 ($0.85) in interim dividend per share, up nearly seven percent year-on-year. The board also authorized the repurchase of $2 billion worth of shares in the second quarter.
TotalEnergies exited the first quarter with $97.5 billion in current assets—assets convertible to cash within a year—including $25.6 billion in cash and cash equivalents. Meanwhile its current liabilities totaled $89.2 billion as of end-March, including $18 billion in borrowings. TotalEnergies had $4.1 billion in free cash flow after organic investments at the end of the year’s opening quarter.
“The Company confirms net investments guidance of $17-$18 billion in 2024, of which $5 billion is dedicated to Integrated Power”, TotalEnergies said.
