TotalEnergies: Third Quarter 2024: Main Indicators

Rhea-AI Summary

TotalEnergies has released its main indicators and estimated financial information for the third quarter of 2024. Key points include:

- Brent crude price averaged $80.3/b, down from $85.0/b in Q2 2024
- Average liquids price was $77.0/b, down from $81.0/b in Q2
- Average gas price increased to $5.78/Mbtu from $5.05/Mbtu in Q2
- European Refining Margin Marker dropped significantly to $15.4/t from $44.9/t in Q2

Hydrocarbon production is expected to be 2.4 Mboe/d, with the Mero 2 project in Brazil ramping up. Exploration & Production results are likely to reflect lower liquid prices offset by higher gas prices. Integrated LNG results are anticipated to exceed $1 billion. Downstream results are expected to decrease sharply due to lower refining margins.

Positive

• Hydrocarbon production maintained at 2.4 Mboe/d despite disruptions
• Integrated LNG results expected to exceed $1 billion
• Average gas price increased to $5.78/Mbtu from $5.05/Mbtu in Q2
• Mero 2 project in Brazil ramping up production

Negative

• Brent crude price decreased to $80.3/b from $85.0/b in Q2 2024
• Average liquids price dropped to $77.0/b from $81.0/b in Q2
• European Refining Margin Marker plummeted to $15.4/t from $44.9/t in Q2
• Downstream results expected to sharply decrease due to lower refining margins
• Unplanned shutdowns in Ichthys LNG and security-related disruptions in Libya

Insights

Financial Analyst

TotalEnergies' Q3 2024 indicators present a mixed picture. The Brent crude price dropped to $80.3/b from $85.0/b in Q2, potentially impacting revenues. However, average gas prices increased to $5.78/Mbtu from $5.05/Mbtu, which could partially offset the oil price decline.

The most significant change is the sharp decrease in the European Refining Margin Marker to $15.4/t from $44.9/t in Q2. This substantial drop will likely lead to a significant decline in downstream results, affecting overall profitability.

Hydrocarbon production remains stable at 2.4 Mboe/d, supported by the Mero 2 project in Brazil. The Integrated LNG segment is expected to perform well, with results above $1 billion despite lower production due to maintenance issues.

The company's sensitivity to oil prices ($2.3 billion impact on adjusted net operating income for every $10/b change) underscores the importance of commodity price fluctuations on TotalEnergies' financial performance. Investors should closely monitor these indicators as they significantly influence the company's quarterly results.

Energy Market Analyst

The Q3 2024 indicators reveal shifting dynamics in the energy market. The narrowing spread between average LNG prices ($9.91/Mbtu) and European gas prices ($5.78/Mbtu) suggests potential pressure on LNG margins. However, TotalEnergies' integrated model allows it to benefit from higher gas prices, partially offsetting lower oil prices.

The dramatic fall in the European Refining Margin Marker is a red flag for the downstream sector. This could indicate oversupply or weakening demand in refined products, which may persist if economic growth slows. The company's ability to navigate this challenging refining environment will be crucial.

The resilience of the Integrated Power segment, expected to perform in line with Q2, highlights the importance of TotalEnergies' diversification strategy. As the energy transition progresses, the stability of this segment could become increasingly valuable to investors.

The unplanned shutdowns at Ichthys LNG and disruptions in Libya underscore the operational risks in the energy sector. TotalEnergies' global portfolio helps mitigate these risks, but investors should remain aware of geopolitical and technical challenges affecting production.

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

The main indicators, estimated financial information and key elements impacting TotalEnergies’ (Paris:TTE) (LSE:TTE) (NYSE:TTE) third quarter 2024 aggregates are shown below:

Main indicators
		3Q24	2Q24	1Q24	4Q23	3Q23
€/$		1.10	1.08	1.09	1.08	1.09
Brent	($/b)	80.3	85.0	83.2	84.3	86.7
Average liquids price * (1)	($/b)	77.0	81.0	78.9	80.2	78.9
Average gas price * (1)	($/Mbtu)	5.78	5.05	5.11	6.17	5.47
Average LNG price ** (1)	($/Mbtu)	9.91	9.32	9.58	10.28	9.56
European Refining Margin Marker (ERM) ***	($/t)	15.4	44.9	71.7	52.6	100.6

*		Sales in $ / Sales in volume for consolidated affiliates.
**		Sales in $ / Sales in volume for consolidated and equity affiliates.
***		This market indicator for European refining, calculated based on public market prices ($/t), uses a basket of crudes, petroleum product yields and variable costs representative of the European refining system of TotalEnergies.
(1)		Does not include oil, gas and LNG trading activities, respectively.

Main elements impacting the quarter aggregates

• Hydrocarbon production is expected to be at 2.4 Mboe/d, thanks to the ramp up of the Mero 2 project in Brazil that partially offsets unplanned shutdowns in Ichthys LNG and security-related disruptions in Libya. Exploration & Production results are expected to reflect the decrease in liquid prices compensated by an increase in gas prices.
• Integrated LNG results are expected to be above $1 billion, in a context of low market volatility and a decrease in production due to unplanned maintenance on Ichthys LNG.
• Integrated Power results are expected to be broadly in line with the second quarter.
• Downstream results are expected to sharply decrease given much lower refining margins in Europe and in the Rest of the World.

2024 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 $/b	+/- 2.3 B$	+/- 2.8 B$
European gas price – NBP / TTF	+/- 2 $/Mbtu	+/- 0.4 B$	+/- 0.4 B$
European Refining Margin Marker (ERM)	+/- 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 2024. 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.
**		In an 80 $/b Brent environment.

Disclaimer

Unless otherwise stated, 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 2024 quarterly 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 (including 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 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 “will”, “should”, “could”, “would”, “may”, “likely”, “might”, “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, technological innovations, meteorological conditions and events, as well as socio-demographic, 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.

Readers are cautioned not to consider forward-looking statements as accurate, but as an expression of the Company’s views only as of the date this document is published. TotalEnergies SE and its subsidiaries have no obligation, make no commitment and expressly disclaim any responsibility to investors or any stakeholder to update or revise, particularly as a result of new information or future events, any forward-looking information or statement, objectives or trends contained in this document. In addition, the Company has not verified, and is under no obligation to verify any third-party data contained in this document or used in the estimates and assumptions or, more generally, forward-looking statements published in this document.

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”).

Additionally, the developments of environmental and climate change-related issues in this document are based on various frameworks and the interests of various stakeholders which are subject to evolve independently of our will. Moreover, our disclosures on such issues, including climate-related disclosures, may include information that is not necessarily "material" under US securities laws for SEC reporting purposes or under applicable securities law.

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 described below (adjusted operating income, adjusted net operating income, adjusted net income), return on equity (ROE), return on average capital employed (ROACE), gearing ratio, operating cash flow before working capital changes, the shareholder rate of return. 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 operating income, 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.

Euro amounts presented for the fully adjusted-diluted earnings per share represent dollar amounts converted at the average euro-dollar (€-$) exchange rate for the applicable period and are not the result of financial statements prepared in euros.

Cautionary Note to US Investors – The SEC permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with SEC rules. We may use certain terms in this document, such as “potential reserves” or “resources”, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. US investors are urged to consider closely the disclosure in the Form 20-F of TotalEnergies SE, File N° 1-10888, available from us at 2, place Jean Millier – Arche Nord Coupole/Regnault – 92078 Paris-La Défense Cedex, France, or at the Company website totalenergies.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC’s website sec.gov.

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TotalEnergies

Source: TOTALENERGIES SE

FAQ

What was TotalEnergies' (TTE) average Brent crude price in Q3 2024?

TotalEnergies' average Brent crude price in Q3 2024 was $80.3 per barrel, down from $85.0 per barrel in Q2 2024.

How did TotalEnergies' (TTE) European Refining Margin Marker change in Q3 2024?

TotalEnergies' European Refining Margin Marker decreased significantly to $15.4/t in Q3 2024, down from $44.9/t in Q2 2024.

What is the expected hydrocarbon production for TotalEnergies (TTE) in Q3 2024?

TotalEnergies' hydrocarbon production is expected to be 2.4 Mboe/d in Q3 2024, supported by the ramp-up of the Mero 2 project in Brazil.

How are TotalEnergies' (TTE) Integrated LNG results expected to perform in Q3 2024?

TotalEnergies' Integrated LNG results are expected to exceed $1 billion in Q3 2024, despite low market volatility and decreased production due to maintenance on Ichthys LNG.