TotalEnergies, the French oil-and-gas major, has announced a rise in its third-quarter profit, driven by higher oil prices and refining margins. The company’s net profit for the quarter stood at $6.68 billion, compared to $6.63 billion in the same period last year, and $4.09 billion in the second quarter. On an adjusted basis, the profit was $6.45 billion, surpassing analyst estimates.
Hydrocarbon Production and Outlook
During the third quarter, TotalEnergies recorded hydrocarbon production of 2.48 million barrels of oil equivalent per day, slightly lower than the previous year’s figure of 2.67 million boe/d. However, when excluding Russia’s Novatek, production saw a 5% increase due to the successful launch of various projects.
Looking ahead to the fourth quarter, the company expects production to range between 2.4 million boe/d and 2.5 million boe/d, reflecting the impact of the recent sale of its oil sands assets in Canada.
Refining Throughput Takes a Hit
TotalEnergies experienced a 7% decline in refining throughput during the quarter. This drop can be attributed to planned maintenance and unforeseen shutdowns at its Port Arthur refinery in the U.S. and Antwerp refinery in Belgium. The Port Arthur refinery is expected to resume operations by mid-November.
Gas Market Dynamics
Despite Europe’s high natural gas inventories leading up to the winter season, TotalEnergies suggests that the gas market remains “tense” and prices continue to be highly reactive to production disruptions. The company predicts that the average selling price of liquefied natural gas in the fourth quarter will exceed $10 per million British thermal units, up from $9.56 per million Btu in the third quarter.
Financial Outlook
TotalEnergies anticipates cash proceeds of approximately $4.1 billion in the fourth quarter from the divestment of its Canadian assets. This expected inflow could potentially bring the company’s gearing down to below 8%. Additionally, the company has planned net investments totaling between $16 billion and $17 billion for the current year.
Dividends and Shareholder Distribution
TotalEnergies will distribute a third interim dividend of 74 European cents ($0.78) per share for 2023. This marks a 7.25% increase from the previous year and remains consistent with the second-quarter dividend payout. The distribution to shareholders aligns with the company’s goal of allocating approximately 43% of its cash flow from operations as shareholder distributions, as mentioned in its annual guidance.