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TotalEnergies (TTE) Inks a Deal to Acquire OMV's Malaysia Assets
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TotalEnergies SE (TTE - Free Report) announced that it has signed an agreement with OMV to acquire its 50% interest in SapuraOMV Upstream Sdn (SapuraOMV), a Malaysian independent gas producer and operator.
The purchase will be made for $903 million, which includes the transfer of a $350 million loan granted by OMV to SapuraOMV, subject to customary closing adjustments.
The principal assets of SapuraOMV are its 30% operated stake in block SK310 and its 40% operated interest in block SK408, both of which are situated offshore Sarawak, Malaysia. About 500 million cubic feet per day of natural gas and 7 thousand barrels per day of condensates, which were used to fuel Petronas's Bintulu LNG facility, were produced by SapuraOMV (100%) in 2023. The development of the Jerun gas field on block SK408 is scheduled to begin in the latter part of 2024.
The transaction is subject to customary conditions, particularly the receipt of regulatory approvals. The deal is expected to be closed by the end of the first half of 2024.
Focus on Malaysia’s Growth
TotalEnergies operates primarily in the solar energy market, and the oil and gas exploration sector in Malaysia. Over the last couple of years, TotalEnergies has built a strong relationship with Malaysia’s national oil company, Petronas. This transaction will set the tone for TTE’s future expansion in Malaysia and strengthen its relationship with Petronas.
TotalEnergies holds interests in two production-sharing contracts in the exploratory stage. It signed an agreement in June 2023 to co-develop a Southeast Asian carbon storage project with Petronas and Mitsui & Co. (MITSY - Free Report) , and assess several carbon storage projects in the Malay Basin.
Low production costs and reduced greenhouse gas emissions make SapuraOMV's assets an ideal addition to TotalEnergies' portfolio and a key contributor to the increasing demand for gas in Asia.
Along with TotalEnergies, other oil and gas companies like Shell plc (SHEL - Free Report) and ExxonMobil Corporation (XOM - Free Report) are also set to contribute to Malaysia’s growth prospects.
Shell has helped pioneer Malaysia’s oil and gas industry since 1891. In August 2023, SHEL announced the delivery of the first gas from its Timi field platform in Malaysia, designed to produce up to 50,000 barrels of oil equivalent a day. The output is carried through a new 49.7-mile pipeline to the Shell-operated F23 production hub.
In Malaysia, ExxonMobil is involved in significant oil and gas production operations and the marketing of chemical products. XOM also hosts a global business and technology center in Kuala Lumpur that provides high-level information technology and engineering expertise to ExxonMobil’s upstream, downstream and chemical businesses worldwide.
SHEL’s long-term (three-to-five-year) earnings growth rate is 9.33%. It delivered an average earnings surprise of 11.8% in the last four quarters.
XOM’s long-term earnings growth rate is 3%. It delivered an average earnings surprise of 0.6% in the last four quarters.
Price Performance
In the past six months, shares of TotalEnergies have risen 8% compared with the industry’s 9.9% growth.
Image: Bigstock
TotalEnergies (TTE) Inks a Deal to Acquire OMV's Malaysia Assets
TotalEnergies SE (TTE - Free Report) announced that it has signed an agreement with OMV to acquire its 50% interest in SapuraOMV Upstream Sdn (SapuraOMV), a Malaysian independent gas producer and operator.
The purchase will be made for $903 million, which includes the transfer of a $350 million loan granted by OMV to SapuraOMV, subject to customary closing adjustments.
The principal assets of SapuraOMV are its 30% operated stake in block SK310 and its 40% operated interest in block SK408, both of which are situated offshore Sarawak, Malaysia. About 500 million cubic feet per day of natural gas and 7 thousand barrels per day of condensates, which were used to fuel Petronas's Bintulu LNG facility, were produced by SapuraOMV (100%) in 2023. The development of the Jerun gas field on block SK408 is scheduled to begin in the latter part of 2024.
The transaction is subject to customary conditions, particularly the receipt of regulatory approvals. The deal is expected to be closed by the end of the first half of 2024.
Focus on Malaysia’s Growth
TotalEnergies operates primarily in the solar energy market, and the oil and gas exploration sector in Malaysia.
Over the last couple of years, TotalEnergies has built a strong relationship with Malaysia’s national oil company, Petronas. This transaction will set the tone for TTE’s future expansion in Malaysia and strengthen its relationship with Petronas.
TotalEnergies holds interests in two production-sharing contracts in the exploratory stage. It signed an agreement in June 2023 to co-develop a Southeast Asian carbon storage project with Petronas and Mitsui & Co. (MITSY - Free Report) , and assess several carbon storage projects in the Malay Basin.
Low production costs and reduced greenhouse gas emissions make SapuraOMV's assets an ideal addition to TotalEnergies' portfolio and a key contributor to the increasing demand for gas in Asia.
Along with TotalEnergies, other oil and gas companies like Shell plc (SHEL - Free Report) and ExxonMobil Corporation (XOM - Free Report) are also set to contribute to Malaysia’s growth prospects.
Shell has helped pioneer Malaysia’s oil and gas industry since 1891. In August 2023, SHEL announced the delivery of the first gas from its Timi field platform in Malaysia, designed to produce up to 50,000 barrels of oil equivalent a day. The output is carried through a new 49.7-mile pipeline to the Shell-operated F23 production hub.
In Malaysia, ExxonMobil is involved in significant oil and gas production operations and the marketing of chemical products. XOM also hosts a global business and technology center in Kuala Lumpur that provides high-level information technology and engineering expertise to ExxonMobil’s upstream, downstream and chemical businesses worldwide.
SHEL’s long-term (three-to-five-year) earnings growth rate is 9.33%. It delivered an average earnings surprise of 11.8% in the last four quarters.
XOM’s long-term earnings growth rate is 3%. It delivered an average earnings surprise of 0.6% in the last four quarters.
Price Performance
In the past six months, shares of TotalEnergies have risen 8% compared with the industry’s 9.9% growth.
Image Source: Zacks Investment Research
Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.