PARIS - TotalEnergies (EPA:TTEF) SE (Paris:TTE) (LSE:TTE) (NYSE:TTE) has entered into an agreement to sell its 10% interest in several oil and gas licenses in Nigeria to Chappal Energies, as part of its strategy to focus on offshore oil and gas assets in the country.
The deal, valued at USD 860 million, involves the divestment of TotalEnergies' stakes in 15 licenses of the Shell (LON:SHEL) Petroleum Development Company of Nigeria (SPDC) Joint Venture, which are primarily oil-producing, and the transfer of its interest in three other licenses that are predominantly gas-producing.
The SPDC JV is a collaborative partnership that includes the Nigerian National Petroleum Corporation Ltd (55%), Shell Petroleum Development Company of Nigeria (30%, operator), TotalEnergies EP Nigeria (10%), and NAOC (5%). These 18 licenses are located in the Niger Delta region.
Production from the oil licenses sold represented approximately 14,000 barrels of oil equivalent per day in TotalEnergies' share in 2023. Meanwhile, TotalEnergies will retain full economic interest in the gas licenses, which are crucial for the supply to Nigeria LNG. These gas licenses currently account for 40% of the Nigeria LNG gas supply.
The transaction, subject to customary closing conditions and regulatory approvals, aligns with TotalEnergies' broader objective to concentrate on its offshore oil and gas operations. Nicolas Terraz, President Exploration & Production of TotalEnergies, emphasized the importance of this divestment for the company's strategy to focus on the integrated gas value chain in Nigeria and to ensure the continuity of feed gas supply to Nigeria LNG in the future.
TotalEnergies has a significant presence in Nigeria, with over 60 years of operations in the country, employing more than 1,800 people and operating around 540 service stations. The company's production in Nigeria contributed significantly to its global hydrocarbon output, with 219,000 barrels of oil equivalent per day produced in 2023.
The sale is part of TotalEnergies' active portfolio management and is consistent with its commitment to sustainability and the socio-economic development of the regions where it operates. The information regarding this sale is based on a press release statement issued by TotalEnergies.
In other recent news, TotalEnergies has announced several strategic moves and financial results. The energy giant has sold its West of Shetland assets in the UK to The Prax Group, a deal encompassing assets yielding about 7,500 barrels of oil equivalent per day. This divestiture aligns with TotalEnergies' strategy to refine its portfolio by offloading mature non-core assets.
Simultaneously, the company has expanded its global footprint by acquiring a 60% stake in the offshore Block STP02 in Sao Tome and Principe and purchasing West Burton Energy from EIG for £450 million, enhancing its presence in the UK energy sector.
From a financial perspective, TotalEnergies reported a Q1 2024 cash flow of $1.3 billion and a 16% growth in the adjusted net operating income for the integrated power segment to over $600 million. HSBC has upgraded its price target for TotalEnergies and maintained a Buy rating on the stock, citing a 2% upgrade in the 2024-26 operating cash flow forecasts for the company.
In addition, TotalEnergies defended its efforts towards the development of Sustainable Aviation Fuels at the International Air Transport Association summit. The company is also considering a potential U.S. listing to better connect with American shareholders.
InvestingPro Insights
As TotalEnergies SE (Paris:TTE) (LSE:TTE) (NYSE:TTE) streamlines its focus on offshore oil and gas assets, the company's financial health and market position come under the spotlight. InvestingPro data indicates that TotalEnergies has a robust market capitalization of $158.04B and a P/E ratio that suggests value at 7.57, which is relatively low when considering near-term earnings growth.
The company's commitment to shareholder returns is evident, as reflected by the fact that TotalEnergies has maintained dividend payments for 48 consecutive years, with a current dividend yield of 3.66%. This consistent dividend payout is a testament to the company's financial stability and its strategy to generate value for investors.
InvestingPro Tips suggest that TotalEnergies is a prominent player in the Oil, Gas & Consumable Fuels industry, and despite some analysts revising their earnings downwards for the upcoming period, the company is expected to remain profitable this year. Moreover, TotalEnergies' management has been actively buying back shares, signaling confidence in the company's prospects.
For readers looking to delve deeper into TotalEnergies' performance and strategic positioning, InvestingPro offers additional insights and tips. There are 9 more InvestingPro Tips available at https://www.investing.com/pro/TTE, which can provide valuable context for investors considering this stock. Users can also take advantage of the special offer using coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further analysis and data to inform their investment decisions.
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