Wired News – Total S.A. Divests its Stake in Two Assets in Norwegian Continental Shelf to Statoil

Stock Monitor: Statoil Post Earnings Reporting

LONDON, UK / ACCESSWIRE / November 29, 2017 / Active-Investors issued a free report on Total S.A. (NYSE: TOT), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=TOT as the Company’s latest news hit the wire. Total announced the sale of its interests in two assets located in the Norwegian Continental Shelf to Statoil ASA (NYSE: STO), a Norwegian energy Company. The divestiture includes Total’s 51% interest in the Martin Linge field and 40% interest in Garantiana discovery. The transaction is valued $1.45 billion and is effective from January 01, 2017. Sign up now for our free research reports at:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Total S.A. most recent news is on our radar and we have decided to include it on our blog post. Today’s free coverage on TOT and STO are available at:

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Details of the Divestiture

As per the terms of the agreement, Statoil will absorb the relevant Total’s employees as per applicable laws. The transaction is expected to close in FY18 and is subject to receiving regulatory approvals and other closing conditions. The total consideration of $1.45 billion is also subject to adjustments at the time of closing of the deal.

Commenting on the divestiture, Arnaud Breuillac, President, Exploration & Production of Total, said:

“Given that Martin Linge is Total’s only operated asset in Norway, there is limited scope to optimize operations, whereas with Statoil’s leading operating position on the Norwegian Continental Shelf, Statoil is in a better position to optimize this asset for the benefit of all stakeholders. We are therefore satisfied with the agreement with Statoil, a long time trusted partner, which in addition, offers us a satisfactory value for this asset. Norway remains a strategic country for Total as one of the largest contributors to the Group’s production and we of course intend to continue bringing our expertise to Norway by focusing in particular on major non-operated assets such as Ekofisk, Snohvit, and Johan Sverdrup.”

Arne Sigve Nylund, Executive Vice President for Development & Production Statoil Norway, added:

“This transaction adds competitive growth assets to our portfolio on the Norwegian continental shelf. The Martin Linge project features innovative solutions to enhance safety, capture value and reduce emissions, in-line with our strategy. By leveraging Statoil’s operational experience and existing contracts, we can realize additional opportunities and synergies from these assets.”

Reasons for Total’s divestiture

Total had announced the acquisition of Maersk Oil portfolio in August 2017 in a $7.45 billion stock plus debt transaction. This included 100% of the equity of the E&P Company Maersk Oil & Gas A/S (Maersk Oil), a wholly owned subsidiary of A.P. Møller – Mærsk A/S. As part of the transaction Total assumed Maersk Oil’s debt of $2.5 billion. This acquisition contributed to Total becoming the second largest operator in the North Sea. The huge acquisition also prompted the Company to review its portfolio of assets. Total is focusing only on assets which will generate synergies and reduce their breakeven points.

Because of this review, Total realized that Martin Linge is the only operated asset in Norway. The site has limited scope for the Company to optimize operations. Hence, Total’s decision to divest its two assets in the Norwegian Continental Shelf.

Norway is an important region for Total as it has been present in that country for over fifty years. The Company has over 85 production licenses and it operates nearly 32 of them. Total has confirmed that it will continue its presence in Norway via its non-operated assets.

Incidentally, Total had signed a partnership agreement with Statoil and Shell for the development of carbon storage on the Norwegian continental shelf in October 2017.

Statoil’s plans for the two assets

Martin Linge

Martin Linge is an oil and gas field under development west of the Oseberg field in the North Sea, with estimated recoverable resources of more than 300 million barrels oil equivalent. It is being developed with a manned wellhead platform. The production from this facility is expected to start in H1 2019. The facility has gained importance after additional resources have been discovered and has increased the recoverable resource from this site. Once the site is fully functional, it will be a modern production facility with low production cost and low carbon footprint. The acquisition will allow Statoil to increase its stake in the site from 19% to 70%. The Company will also be able to get tax benefits of around $1 billion as a result of the transaction.

Garantiana Discovery

Garantiana is an oil discovery north of the Visund field in the North Sea with a recoverable resource potential between 50 to 70 million barrels oil equivalent. The acquisition will allow Statoil to gain 40% interest in the discovery. The site is in the process of development and various options are being evaluated.

About Total S.A.

Total is the world’s fourth-largest oil and gas company, a global leader in liquefied natural gas (LNG) and a major player in low-carbon energies. The Company produces 2.5 million barrels of oil equivalent (Mboe) per day and transports 131 million metric tons of crude oil and refined products. The Company has presence in over 130 countries across the world and is supported by a team of over 98,000 employees.

For FY16, Total reported global sales of $149.7 billion and adjusted net income of $8.3 billion.

About Statoil ASA

Headquartered in Stavanger, Norway, Statoil is a Norwegian-based energy Company with operations in more than 30 countries. The Company explores, develops, and produces oil and gas in the Norwegian continental shelf. The Company is also a major crude oil seller and the second-largest supplier of natural gas to the European market. It also supplies renewable energy to the UK via its offshore wind farm at Sheringham Shoal. The Company has operations across Europe, Africa, North America, and Brazil.

Stock Performance Snapshot

November 28, 2017 – At Tuesday’s closing bell, Total’s stock slightly advanced 0.43%, ending the trading session at $56.61.

Volume traded for the day: 1.61 million shares, which was above the 3-month average volume of 1.20 million shares.

Stock performance in the last month – up 3.34%; previous three-month period – up 9.22%; past twelve-month period – up 22.00%; and year-to-date – up 11.07%

After yesterday’s close, Total’s market cap was at $141.99 billion.

Price to Earnings (P/E) ratio was at 17.86.

The stock has a dividend yield of 4.81%.

The stock is part of the Basic Materials sector, categorized under the Major Integrated Oil & Gas industry. This sector was up 0.8% at the end of the session.

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