By Adam Whittaker
TotalEnergies expects first-quarter hydrocarbon production to be at the high end of its quarterly guidance range and for earnings to be boosted by an on-quarter increase in refining margins.
The French energy major said Tuesday that it expects hydrocarbon production for the first three months of 2025 to be at the high end of its 2.5 million to 2.55 million barrels of oil-equivalent a day guidance range. This would be an increase on the 2.43 million oil-equivalent barrels a day it produced in the fourth quarter of last year, when it benefited from the ramp up of projects that had started earlier in the year.
Its European refining margin marker remains weak but is expected to increase sequentially and boost its downstream earnings.
The margin is expected at $29.4 a metric ton, up from $25.9 a ton in the fourth quarter of last year but well below the $71.7 a ton it reported in the first quarter of 2024.
Earnings in its exploration and production division are expected to reflect the production increase and a slightly more favourable Brent crude price environment, the company said. Average gas prices also ticked up slightly but LNG prices recorded a small drop.
Overall, the update was in line with expectations but TotalEnergies might have to take on more debt to cover a large $4 billion to $5 billion seasonal increase in working capital, Jefferies analysts Giacomo Romeo and Kai Ye Loh wrote in a note.
Last week, British peer BP said it expected to report lower first-quarter upstream production due to previously announced divestments in Egypt and Trinidad, and for debt to jump by nearly $4 billion.
TotalEnergies' refining and chemicals division is expected to report results in the same range as the fourth-quarter, it said. Its results will be supported by the overall rise in margins and higher utilization rate that will offset weakness in European petrochemicals and biofuels margins, which have been hit by over capacity, the company said.
Its integrated power division should report earnings between $450 million and $500 million for the first quarter, the company said.
In early morning European trade, shares traded up 0.20% to 50.32 euros.
Write to Adam Whittaker at adam.whittaker@wsj.com
(END) Dow Jones Newswires
April 15, 2025 03:26 ET (07:26 GMT)
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