French oil and gas major Total raised its 2018 savings and oil production targets after a new record quarterly output, costs savings and high oil prices lifted its net profit in the second quarter.
The group said adjusted net profit for the second quarter soared 44% to $3.6 billion, beating analysts’ estimates of $3.4 billion.
Oil production rose by 8.7% to 2.717 million barrels of oil equivalent per day, driven by the early completion the Maersk Oil deal, and the ramp-up of several projects including Yamal LNG in Russia and Moho Nord in Congo.
Total raised its production growth target to 7% in 2018 from 6% previously, expecting a boost from the start-up of its Kaombo North project in Angola, Egina in Nigeria, Australia’s Ichthys LNG and Tempa Rossa in Italy.
The company said cost savings measures were on track to surpass the $4 billion target for the year and reach $4.2 billion over the 2014-2018 period.
“Oil prices continued to increase, averaging $74 per barrel in the second quarter, supported by inventory reductions and geopolitical tensions,” Total CEO Patrick Pouyanne said in a statement.
The company said it would continue to implement programs to improve operational efficiency and reduce its breakeven so as to remain profitable, whatever the market context.
Organic pre-dividend breakeven continued to drop to less that $25 per barrel in the quarter, it said.
Total also maintained 2018 investments at the $16 billion to $17 billion range.
The company said it bought back all shares issued during the year for the scrip dividend scheme, and also bought back shares for $600 million to spread the benefits from the higher oil prices with shareholders.
Total’s share buybacks came as its rival Royal Dutch Shell also launched a long-anticipated $25 billion share buyback program on July 26. Total added that it will continue to buy back shares issued as scrip dividend when prices were down, to eliminate dilution.
Total also raised its dividend in the quarter by 3.2% to 0.64 euros (US$0.7487) per share.
The rollback effort made by the administration of former President Donald Trump was among a string of eleventh-hour proposals aimed at maximizing energy development on public lands and waters.
The oil and gas rig count rose eight to 448 in the week to May 7, its highest since April 2020, Baker Hughes Co. said.
Marcellus and Utica shale discoveries, Diamondback completes a Wolfcamp producer in the Permian Basin plus an offshore prospect in the Gulf of Mexico’s Green Canyon Block top this week’s oil and gas drilling activity highlights from around the world.