The Energy Report
Source: Streetwise Reports 03/23/2020
Shares of Total SA traded 14% higher today after the firm reported that has implemented a company-wide action plan to address the sharp decrease in oil prices.
The company stated in the report that on March 19, 2020, its Chairman and CEO Patrick Pouyanné addressed the group’s employees to mobilize them to face the challenges ahead. The firm noted that in Pouyanné’s remarks, “he recalled the resilience that the group’s teams demonstrated during the 2015-16 oil crisis as well as the two pillars of the group’s strategy which are the organic pre-dividend breakeven of less than $25/bbl and the low gearing to face this high volatility.”
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The company advised that in the context of $30/bbl oil prices the firm reported an action plan to be implemented immediately. The plan will focus on three key areas of cap-ex reductions, operating costs savings and suspension of stock buybacks.
The company reported that it will cut its organic short-cycle flexible capital expenditures by $3 billion, a greater than 20% reduction of 2020 net investments to less than $15 billion.
The firm stated that it will now have increased 2020 operating costs savings of $800 million compared to 2019, versus the $300 million savings which was announced previously.
The company also stated that it was suspending its stock buyback program. The firm initially announced a $2 billion buyback for 2020 in a $60/bbl environment and stated that in the first two months of 2020 it had already bought back $550 million of its shares.
The company noted that it expects to release Q1/20 earnings during its conference call which is presently scheduled for April 30, 2020.
In a separate new release today, the company reported that in order to support healthcare staff of French hospitals who have been mobilized in the fight against the Covid-19 virus it will be supplying them with fuel for their travel. The firm indicated that it will provide hospitals with gasoline vouchers worth up to 50 million euros that can be used at Total stations.
Chairman and CEO Pouyanné commented, “In this period of crisis, Total’s teams remain mobilized to enable French people to make all their necessary travel arrangements. With its nationwide network, Total is working alongside those who are fighting the epidemic everywhere. Which is why the Group has decided to make this practical gesture of support for our hospital staff, who are working to ensure the health of patients.”
The firm additionally advised that “the Total Foundation will contribute 5 million to the Pasteur Institute and to hospital and health associations involved in the fight against Covid-19.”
Total SA is an oil and gas company headquartered in Paris, France. The firm has a market cap of over $140 billion, employs over 100,000 people and has active operations in more than 130 countries. Total is a major energy player that produces and markets fuels, natural gas and low-carbon electricity.
Total S.A. has a market capitalization of around $65.7 billion with approximately 2.586 billion shares outstanding. TOT shares opened higher today at $29.58 (+$4.16, +16.37%) over Friday’s $25.42 closing price. The stock has traded today between $28.17 and 29.58 per share and is currently trading at $29.18 (+$3.76, +14.79%).
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( Companies Mentioned: TOT:NYSE,