We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
TOTAL (TOT) to Acquire LNG Assets From Engie for $1.49B
Read MoreHide Full Article
TOTAL S.A. announced that it has entered into a definite agreement to acquire the upstream liquefied natural gas (LNG) assets of Engie for $1.49 billion. The decision to buy the assets and expand footprint in the LNG business is expected to benefit the company significantly.
Details of the Deal
Per the agreement, TOTAL will have control over Engie’s interest in the Cameron LNG project in the United States, long-term LNG sales and purchase agreements, and an LNG tanker fleet. It will also have access to regasification capacities in Europe.
TOTAL might pay another $550 million to Engie, subject to improvement in oil markets in the coming year. This transaction is expected to close by mid-2018.
Rising Popularity of LNG
The importance of natural gas is rising as a fuel source across the globe but there is a miss-match of production and demand areas for natural gas. As it is not practical and logistically possible to transfer large volume of natural gas across oceans, LNG tankers are gaining popularity.
Natural gas is cooled to a certain temperature to produce LNG and is transported in large tankers. Once designated ports is reached, LNG is regasified to produce natural gas after heating.
TOTAL’s Benefit
LNG is gaining popularity and the global LNG market is expanding 5% to 6% per year.
In first nine months of 2017, TOTAL sold 8.56 million tons of LNG, reflecting growth of 4% from the year-ago period.
This deal, scheduled to be closed in 2018, will expand TOTAL’s total volume of LNG sales to 40 million tons per year in 2020. So, the decision to acquire Engie’s assets will expand TOTAL’s operation in LNG and increase revenue contribution from this space.
Sale & Purchase of Assets
TOTAL continues to make strategic acquisitions in high potential areas and divest assets that are not in sync with its long-term objectives. During third quarter, the company acquired assets worth $513 million, primarily comprising the resources for Elk-Antelope in Papua New Guinea. It sold assets worth $202 million during the same period, primarily its LPG activities in Germany.
In the third quarter, the company entered into a definite agreement to acquire Maersk Oil & Gas A/S (Maersk Oil) for $7.45 billion. This deal will further strengthen its position in the Zacks Oil and Energy sector and create tougher competition for the super majors like Exxon Mobil Corporation (XOM - Free Report) , Chevron Corporation (CVX - Free Report) and BP p.l.c (BP - Free Report) .
TOTAL has gained 8.6% in the last six months compared with 8.3% rally of its industry.
The company’s strong production portfolio, initiatives to lower operating costs and start new projects bode for it in the future.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
TOTAL (TOT) to Acquire LNG Assets From Engie for $1.49B
TOTAL S.A. announced that it has entered into a definite agreement to acquire the upstream liquefied natural gas (LNG) assets of Engie for $1.49 billion. The decision to buy the assets and expand footprint in the LNG business is expected to benefit the company significantly.
Details of the Deal
Per the agreement, TOTAL will have control over Engie’s interest in the Cameron LNG project in the United States, long-term LNG sales and purchase agreements, and an LNG tanker fleet. It will also have access to regasification capacities in Europe.
TOTAL might pay another $550 million to Engie, subject to improvement in oil markets in the coming year. This transaction is expected to close by mid-2018.
Rising Popularity of LNG
The importance of natural gas is rising as a fuel source across the globe but there is a miss-match of production and demand areas for natural gas. As it is not practical and logistically possible to transfer large volume of natural gas across oceans, LNG tankers are gaining popularity.
Natural gas is cooled to a certain temperature to produce LNG and is transported in large tankers. Once designated ports is reached, LNG is regasified to produce natural gas after heating.
TOTAL’s Benefit
LNG is gaining popularity and the global LNG market is expanding 5% to 6% per year.
In first nine months of 2017, TOTAL sold 8.56 million tons of LNG, reflecting growth of 4% from the year-ago period.
This deal, scheduled to be closed in 2018, will expand TOTAL’s total volume of LNG sales to 40 million tons per year in 2020. So, the decision to acquire Engie’s assets will expand TOTAL’s operation in LNG and increase revenue contribution from this space.
Sale & Purchase of Assets
TOTAL continues to make strategic acquisitions in high potential areas and divest assets that are not in sync with its long-term objectives. During third quarter, the company acquired assets worth $513 million, primarily comprising the resources for Elk-Antelope in Papua New Guinea. It sold assets worth $202 million during the same period, primarily its LPG activities in Germany.
In the third quarter, the company entered into a definite agreement to acquire Maersk Oil & Gas A/S (Maersk Oil) for $7.45 billion. This deal will further strengthen its position in the Zacks Oil and Energy sector and create tougher competition for the super majors like Exxon Mobil Corporation (XOM - Free Report) , Chevron Corporation (CVX - Free Report) and BP p.l.c (BP - Free Report) .
Zacks Rank
TOTAL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Movement
TOTAL has gained 8.6% in the last six months compared with 8.3% rally of its industry.
The company’s strong production portfolio, initiatives to lower operating costs and start new projects bode for it in the future.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>