04-16-2014, 04:01 AM
On Apr 14, 2014, the shares of TOTAL S.A. (TOT - Analyst Report) climbed to its 52-week high of $68.03, primarily due to its focus on strategic inorganic growth projects backed by strong financial profile. The share price finally closed at $67.73, up 2.3% from the previous day’s closing.
We remind investors that TOTAL has a significant presence in many mineral-rich locations across the world. We appreciate the company’s steady effort towards expansion of its operation through inorganic route. In 2013, TOTAL utilized $4.5 billion for new acquisitions. Year to date, the company completed few important transactions.
On Apr 14, 2014, TOTAL announced that it will expand its operations in Africa by developing ultra-deep offshore assets in Angola. The company, with 30% interest, and its partners will jointly develop the Kaombo project. The asset has a daily production capacity of 230,000 barrels besides having an anticipated reserve of 650 million barrels.
In Mar 2014, TOTAL and InterOil Corporation closed the Elk-Antelope transaction. Per the deal, the company acquired 40.1% gross interest at the Elk-Antelope gas field in Papua New Guinea.
The scheduled completion of the projects and proper integration of new assets with the existing properties will help TOTAL to enhance its production capacity.
In addition to expanding operations, TOTAL has a stable long-term contract portfolio and signing of the long-term agreements will ensure a steady future revenue stream. In Mar 2014, TOTAL inked a contract with China National Offshore Oil Corporation to provide additional liquefied natural gas in China, thereby meeting increasing customer demand.
TOTAL continues to maintain a stable liquidity position with cash balance of $19.4 billion (€14.64 billion) as of Dec 31, 2013. In 2013, the company’s cash flow from operating activities was $28.5 billion (€21.47 billion). A strong liquidity position supports the company’s steady acquisition program.
TOTAL currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the oil and gas sector include Range Resources Corp. (RRC - Analyst Report), Callon Petroleum Co. (CPE - Snapshot Report) and Encana Corp. (ECA - Analyst Report). While Range Resources holds a Zacks Rank #1 (Strong Buy), Callon Petroleum and Encana carry a Zacks Rank #2 (Buy).