With oil prices soaring and investors looking for signs that oil company stocks are starting to catch up, France’s TotalEnergies announced plans to boost production and shareholder payouts, sending its share price up nearly a percentage point in morning trading.
TotalEnergies said it plans to return about 44% of its operating cash flow to shareholders in 2023, as well as add another $1.5 billion to buybacks, which will reach $9 billion. In addition, the payout guidance will be increased to more than 40% of the company’s operating cash flow after this year.
The French giant’s new strategy is to increase oil production by 2% and natural gas production by 3% per year over the next five years. TotalEnergies said in a press release that its oil and gas business is expected to generate more than $3 billion of additional underlying cash flow in 2028 compared to 2023 (at constant prices).
The company plans to develop a number of LNG projects, including Qatar North Field Expansion, Papua LNG, ECA LNG and Rio Grande in the U.S., Mozambique LNG, which it sees as “leveraging its competitive advantage with leading positions in European regasification and U.S. exports.”
The company’s overall strategy is to “focus efforts on the development of its portfolio of high-return oil projects (Brazil, Gulf of Mexico, Iraq, Uganda), recently enriched by exploration successes in Suriname and Namibia,” TotalEnergies said. Net investments of $16 billion to $18 billion per year are expected over the 2024-2028 period. The forecast also sees the French giant increasing power generation to more than 100 TWh by 2030, with annual investments of $4 billion and a doubling of cash flow from about $2 billion this year to more than $4 billion by 2028. Year-to-date, TotalEnergies (NYSE:TTE) is up 7.45% and up 15.44% over the past six months.