On Thursday, TotalEnergies (EPA:TTEF) (NYSE:TTE) announced the sale of its West of Shetland assets in the UK to The Prax Group. The assets include the Laggan, Tormore, Glenlivet, Edradour, and Glendronach fields, the onshore Shetland Gas Plant, and nearby exploration licenses. The deal, which is pending approval from the relevant authorities, encompasses assets that currently yield about 7,500 barrels of oil equivalent per day, primarily comprising gas.
The transaction will also involve the transfer of relevant employees from TotalEnergies to Prax, adhering to applicable legislation. This move aligns with TotalEnergies' strategy to refine its portfolio by offloading mature non-core assets, as stated by Jean-Luc Guiziou, Senior Vice President Europe for Exploration & Production at TotalEnergies.
TotalEnergies has a significant presence in the UK, where it has operated for over 60 years and employs more than 1,800 people. The company continues to manage a substantial portion of the UK's gas production, which amounted to an average daily production of 142,000 barrels of oil equivalent per day in 2023.
The company's renewable energy footprint in the UK includes a 1.1 GW gross installed capacity from the Seagreen offshore wind farm and an additional 4.5 GW under development. In 2024, TotalEnergies expanded its energy offerings by acquiring gas-fired power plants with a total output of 1.3 GW. It remains a leading supplier of gas, electricity, and other energy solutions to businesses and the public sector in the UK.
TotalEnergies is also involved in the carbon capture and storage (CCS) sector through a 10% interest in the Northern Endurance Partnership.
In other recent news, TotalEnergies has strengthened its presence in the Gulf of Guinea, acquiring a 60% stake in the offshore Block STP02 in Sao Tome and Principe. This move is expected to enhance TotalEnergies' global footprint in the energy sector. Additionally, the company has expanded its UK presence by purchasing West Burton Energy from EIG for £450 million.
On the financial front, the company reported a Q1 2024 cash flow of $1.3 billion and a 16% growth in the adjusted net operating income for the integrated power segment to over $600 million. HSBC has raised its price target for TotalEnergies and maintained a Buy rating on the stock, citing a 2% upgrade in the 2024-26 operating cash flow forecasts for the company.
Amid these developments, TotalEnergies defended its efforts towards the development of Sustainable Aviation Fuels at the International Air Transport Association summit. The company is also considering a potential U.S. listing to better connect with American shareholders.
These are the recent developments in TotalEnergies' ongoing operations and strategic planning.
InvestingPro Insights
As TotalEnergies (NYSE:TTE) navigates the strategic reshaping of its asset portfolio, the company's financial health and market performance remain key points of interest for investors. The latest data from InvestingPro shows that TotalEnergies has a robust market capitalization of $153.61 billion, underpinned by a favorable P/E ratio of 7.35, indicating the stock may be attractively priced relative to its earnings. Notably, the company's P/E ratio has slightly adjusted to 7.79 over the last twelve months as of Q1 2024, while maintaining a PEG ratio of 0.92, suggesting a reasonable balance between its earnings growth rate and share price.
InvestingPro Tips highlight that TotalEnergies is a prominent player in the Oil, Gas & Consumable Fuels industry and has sustained its dividend payments for an impressive 48 consecutive years. This consistent dividend track record, along with a dividend yield of 3.83% as of mid-2024, may appeal to income-focused investors. Furthermore, analysts predict that the company will remain profitable this year, with profitability extending over the last twelve months. For investors seeking a deeper dive into the company's financials and additional insights, there are more InvestingPro Tips available at InvestingPro. Use the exclusive coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes a comprehensive list of tips to further inform your investment decisions.
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