TotalEnergies: Third Quarter 2022: Main Indicators

Rhea-AI Summary

TotalEnergies (TTE) reported key indicators for Q3 2022, showing an average LNG price increase of 50%. While upstream production is expected to decrease by 70 kboe/d due to outages in Kashagan, the refining & chemicals sector remains strong despite lower gasoline margins. Brent prices averaged $100.8/b, a drop from the previous quarter. The dollar's fluctuation impacts earnings, with a sensitivity analysis revealing adjustments of +/- $2.7 billion on operating income for liquid price changes.

Positive

• 50% increase in average LNG price expected.
• High performance predicted for gas, LNG, and power trading activities.

Negative

• 70 kboe/d decrease in upstream production due to Kashagan outages.
• Refining & Chemicals results expected to be lower due to declining gasoline margins.

PARIS--(BUSINESS WIRE)-- Regulatory News:

The main indicators and key elements affecting TotalEnergies’ (Paris:TTE) (LSE:TTE) (NYSE:TTE) third quarter 2022 results are shown below:

Main indicators
				3Q22		2Q22		1Q22		4Q21		3Q21
€/$				1.01		1.06		1.12		1.14		1.18
Brent		($/b)		100.8		113.9		102.2		79.8		73.5
Average liquids price* (1)		($/b)		93.6		102.9		90.1		72.6		67.1
Average gas price* (1)		($/Mbtu)		16.83		11.01		12.27		11.38		6.33
Average LNG price** (1)		($/Mbtu)		21.51		13.96		13.60		13.12		9.10
Variable Cost Margin, European refining***		($/t)		99.2		145.7		46.3		16.7		8.8

* Sales in $ / Sales in volume for consolidated affiliates.

** Sales in $ / Sales in volume for consolidated and equity affiliates.

*** This indicator represents the average margin on variable costs realized by TotalEnergies’ European refining business (equal to the difference between the sales of refined products realized by TotalEnergies’ European refining and the crude purchases as well as associated variable costs, divided by refinery throughput in tons).

⁽¹⁾ Does not take into account oil, gas and LNG trading activities, respectively.

Main factors impacting the adjusted results of the quarter

• LNG assets performance is expected to increase strongly as a result of higher average LNG price, up 50%.
• Performance of the gas, LNG and power trading activities is expected to remain high, our integrated portfolio enabling to capture opportunities in a volatile and dislocated environment.
• Upstream production is expected to be 70 kboe/d lower than in Q2, mainly due to unplanned outages in Kashagan.
• Refining & Chemicals results are expected to remain high thanks to strong distillate margins, albeit lower than the previous quarter due to the decrease in gasoline margins in Europe and in the US.

2022 sensitivities*
	Change	Estimated impact on adjusted net operating income	Estimated impact on cash flow from operations
Dollar	+/- 0.1 $ per €	-/+ 0.1 B$	~0 B$
Average liquids price**	+/- 10 $/b	+/- 2.7 B$	+/- 3.2 B$
European gas price - NBP / TTF***	+/- 2 $/Mbtu	+/- 0.5 B$	+/- 0.5 B$
Variable cost margin, European refining (VCM)	+/- 10 $/t	+/- 0.4 B$	+/- 0.5 B$

* Sensitivities are revised once per year upon publication of the previous year’s fourth quarter results. Sensitivities are estimates based on assumptions about TotalEnergies’ portfolio in 2022. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-€ sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals.

Sensitivity to European gas price has been exceptionally updated during this quarter (see ***).

** In a 60 $/b Brent environment.

*** Updated sensitivity, including UK Energy Profits Levy.

Disclaimer

The terms “TotalEnergies”, “TotalEnergies company” and “Company” in this document are used to designate TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate and independent legal entities.

The data presented in this document is based on TotalEnergies’ internal preliminary reporting and is not audited. This data is not intended to be a comprehensive summary of all items that will affect TotalEnergies SE’s results or to provide an estimate of the third quarter 2022 results. Actual results may vary. To the extent permitted by law, TotalEnergies SE disclaims all liability from the use of this data.

This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. These forward-looking statements may generally be identified by the use of the future or conditional tense or forward-looking words such as “envisions”, “intends”, “anticipates”, “believes”, “considers”, “plans”, “expects”, “thinks”, “targets”, “aims” or similar terminology. Such forward-looking statements included in this document are based on economic data, estimates and assumptions prepared in a given economic, competitive and regulatory environment and considered to be reasonable by TotalEnergies as of the date of this document.

These forward-looking statements are not historical data and should not be interpreted as assurances that the perspectives, objectives or goals announced will be achieved. They may prove to be inaccurate in the future, and may evolve or be modified with a significant difference between the actual results and those initially estimated, due to the uncertainties notably related to the economic, financial, competitive and regulatory environment, or due to the occurrence of risk factors, such as, notably, the price fluctuations in crude oil and natural gas, the evolution of the demand and price of petroleum products, the changes in production results and reserves estimates, the ability to achieve cost reductions and operating efficiencies without unduly disrupting business operations, changes in laws and regulations including those related to the environment and climate, currency fluctuations, as well as economic and political developments, changes in market conditions, loss of market share and changes in consumer preferences, or pandemics such as the COVID-19 pandemic. Additionally, certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto.

Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. The information on risk factors that could have a significant adverse effect on TotalEnergies’ business, financial condition, including its operating income and cash flow, reputation, outlook or the value of financial instruments issued by TotalEnergies is provided in the most recent version of the Universal Registration Document which is filed by TotalEnergies SE with the French Autorité des Marchés Financiers and the annual report on Form 20-F filed with the United States Securities and Exchange Commission (“SEC”).

Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TotalEnergies. In addition to IFRS measures, certain alternative performance indicators are presented, such as performance indicators excluding certain adjustment items (i.e., special items, inventory valuation effect and effect of changes in fair value) -adjusted net operating income, adjusted net income). These indicators are meant to facilitate the analysis of the financial performance of TotalEnergies and the comparison of income between periods. They allow investors to track the measures used internally to manage and measure the performance of TotalEnergies. The adjusted results (adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items, excluding the effect of changes in fair value. For further details on the adjustment items, please refer to the last published earnings statement and notes to the consolidated financial statements.

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TotalEnergies

Source: TOTALENERGIES SE

FAQ

What were TotalEnergies' Q3 2022 LNG price results?

TotalEnergies reported a 50% increase in average LNG prices in Q3 2022.

How did TotalEnergies' upstream production perform in Q3 2022?

Upstream production for TotalEnergies is expected to decrease by 70 kboe/d in Q3 2022 due to unplanned outages.

What impact did Brent prices have on TotalEnergies in Q3 2022?

Brent prices averaged $100.8/b in Q3 2022, showing a decrease from the previous quarter.

What trading activities contributed to TotalEnergies' performance in Q3 2022?

TotalEnergies expects high performance from its gas, LNG, and power trading activities due to market volatility.