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TotalEnergies (TTE) & INPEX to Acquire Australian Gas Field
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TotalEnergies SE (TTE - Free Report) and INPEX have signed an agreement with PTTEP for the acquisition of its 100% interest in the AC-RL7 permit, which encompasses two gas fields in the Timor Sea, offshore Australia.
According to the terms of the agreement that are still pending the consent of the relevant authorities, TotalEnergies will purchase a 26% stake in the permit, which corresponds to its share in the Ichthys LNG project. INPEX will purchase the remaining 74% and take on the role of operator.
Details of the Agreement
The AC-RL7 block is located off the northern coast of Western Australia and covers a surface area of approximately 161 square miles in the Timor Sea. The block lies approximately 155 miles northeast of the Ichthys offshore facilities. The Cash and Maple gas and condensate fields, which were found in 2002 and 1989, respectively, are a resource rich region that was later validated by a number of wells and covered by the permit.
The development of these fields is anticipated to contribute to the long-term supply to the Ichthys LNG natural gas liquefaction facility, wherein TotalEnergies holds a 26% partnership. INPEX and other Asian minority owners hold a 74% stake in this facility.
TTE’s Focus on LNG
TotalEnergies will be able to secure additional resources for the future supply of the Ichthys LNG facility due to this joint acquisition with its partner INPEX. With the aid of these resources, TTE will be able to meet the long-term demand for LNG in the Asia-Pacific region.
The company has a dominant position throughout the entire LNG value chain, with access to more than 20 million tons per year (Mt/y) of European regasification capacity, production, shipping, trading and LNG bunkering.
The company is one of the major global LNG producers with a market share of approximately 12% and a worldwide portfolio of more than 50 Mt/y. This can be attributed to TotalEnergies’ diverse investments in liquefaction facilities across all continents.
TTE aims at expanding the proportion of natural gas in its sales mix to nearly 50% by 2030. It will do so by focusing on reducing carbon emissions and methane emissions related to the gas value chain, and collaborating with regional partners on switching from coal to natural gas.
Growth Prospects
According to McKinsey & Company’s report, the expected commissioning of current projects in the coming two to three years, Australia’s LNG industry will have more than tripled its capacity since 2010. It is set to have the largest installed base in the world, with projected capacity of 86 million tons per annum (mtpa). Australia’s LNG base would not only be the world’s largest, it will also be technologically advanced.
In June 2023, TotalEnergies signed an agreement with NextDecade (NEXT - Free Report) and Global Infrastructure Partners to participate in the development of the Rio Grande LNG project, an LNG plant located in South Texas. Per the agreement, TotalEnergies needs to offtake 5.4 Mtpa of LNG in the first twenty years of the deal’s tenure, which will increase the company's U.S. LNG export capability to more than 15 Mtpa by 2030.
The major international oil and gas operators with expertise in developing LNG projects will play a vital role in the development of LNG plants worldwide. In 2022, QatarEnergy selected TotalEnergies, Shell plc (SHEL - Free Report) , ExxonMobil Corporation (XOM - Free Report) and other international oil and gas operators for the development of its massive North Field South LNG project. This project is anticipated to add 33 Mtpa in its first phase, and another 16 Mtpa in the second phase.
The Zacks Consensus Estimate for NEXT’s 2023 earnings per share is pegged at a loss of 36 cents, implying a year-over-year improvement of 44.6%.
SHEL’s long-term (three to five years) earnings growth rate is 9.33%. The company delivered an average earnings surprise of 10.7% in the last four quarters.
XOM’s long-term earnings growth rate is 21.39%. The company delivered an average earnings surprise of 5.2% in the last four quarters.
Price Performance
In the past month, shares of TotalEnergies have risen 3.5% compared with the industry’s 3.3% growth.
Image Source: Zacks Investment Research
Zacks Rank
The company currently has a Zacks Rank #5 (Strong Sell).
Image: Shutterstock
TotalEnergies (TTE) & INPEX to Acquire Australian Gas Field
TotalEnergies SE (TTE - Free Report) and INPEX have signed an agreement with PTTEP for the acquisition of its 100% interest in the AC-RL7 permit, which encompasses two gas fields in the Timor Sea, offshore Australia.
According to the terms of the agreement that are still pending the consent of the relevant authorities, TotalEnergies will purchase a 26% stake in the permit, which corresponds to its share in the Ichthys LNG project. INPEX will purchase the remaining 74% and take on the role of operator.
Details of the Agreement
The AC-RL7 block is located off the northern coast of Western Australia and covers a surface area of approximately 161 square miles in the Timor Sea. The block lies approximately 155 miles northeast of the Ichthys offshore facilities. The Cash and Maple gas and condensate fields, which were found in 2002 and 1989, respectively, are a resource rich region that was later validated by a number of wells and covered by the permit.
The development of these fields is anticipated to contribute to the long-term supply to the Ichthys LNG natural gas liquefaction facility, wherein TotalEnergies holds a 26% partnership. INPEX and other Asian minority owners hold a 74% stake in this facility.
TTE’s Focus on LNG
TotalEnergies will be able to secure additional resources for the future supply of the Ichthys LNG facility due to this joint acquisition with its partner INPEX. With the aid of these resources, TTE will be able to meet the long-term demand for LNG in the Asia-Pacific region.
The company has a dominant position throughout the entire LNG value chain, with access to more than 20 million tons per year (Mt/y) of European regasification capacity, production, shipping, trading and LNG bunkering.
The company is one of the major global LNG producers with a market share of approximately 12% and a worldwide portfolio of more than 50 Mt/y. This can be attributed to TotalEnergies’ diverse investments in liquefaction facilities across all continents.
TTE aims at expanding the proportion of natural gas in its sales mix to nearly 50% by 2030. It will do so by focusing on reducing carbon emissions and methane emissions related to the gas value chain, and collaborating with regional partners on switching from coal to natural gas.
Growth Prospects
According to McKinsey & Company’s report, the expected commissioning of current projects in the coming two to three years, Australia’s LNG industry will have more than tripled its capacity since 2010. It is set to have the largest installed base in the world, with projected capacity of 86 million tons per annum (mtpa). Australia’s LNG base would not only be the world’s largest, it will also be technologically advanced.
In June 2023, TotalEnergies signed an agreement with NextDecade (NEXT - Free Report) and Global Infrastructure Partners to participate in the development of the Rio Grande LNG project, an LNG plant located in South Texas. Per the agreement, TotalEnergies needs to offtake 5.4 Mtpa of LNG in the first twenty years of the deal’s tenure, which will increase the company's U.S. LNG export capability to more than 15 Mtpa by 2030.
The major international oil and gas operators with expertise in developing LNG projects will play a vital role in the development of LNG plants worldwide. In 2022, QatarEnergy selected TotalEnergies, Shell plc (SHEL - Free Report) , ExxonMobil Corporation (XOM - Free Report) and other international oil and gas operators for the development of its massive North Field South LNG project. This project is anticipated to add 33 Mtpa in its first phase, and another 16 Mtpa in the second phase.
The Zacks Consensus Estimate for NEXT’s 2023 earnings per share is pegged at a loss of 36 cents, implying a year-over-year improvement of 44.6%.
SHEL’s long-term (three to five years) earnings growth rate is 9.33%. The company delivered an average earnings surprise of 10.7% in the last four quarters.
XOM’s long-term earnings growth rate is 21.39%. The company delivered an average earnings surprise of 5.2% in the last four quarters.
Price Performance
In the past month, shares of TotalEnergies have risen 3.5% compared with the industry’s 3.3% growth.
Image Source: Zacks Investment Research
Zacks Rank
The company currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.