Regulatory News:

Total Gabon (Paris:EC):

Main Financial Indicators

 

 

Q2 20

Q1 20

Q2 20

vs.

Q1 20

 

H1 20

 

 

H1 19

 

H1 20

vs.

H1 19

Average Brent price

$/b

29.6

50.1

-41%

40.1

66.0

-39%

Average Total Gabon crude price (1)

$/b

22.6

40.6

-44%

30.7

62.3

-51%

Crude oil production

from fields operated by Total Gabon

kb/d (2)

19.0

21.7

-12%

20.3

23.6

-14%.

Crude oil production

from Total Gabon interests (3)

kb/d

25.4

27.9

-9%

26.6

32.7

-19%

Sales volumes (1)

Mb (4)

2.84

2.34

+21%

5.18

5.96

-13%

Revenues (5)

M$

74

113

-35%

187

409

-54%

Funds generated from operations (6)

M$

31

55

-44%.

86

146

-41%.

Capital expenditure

M$

10

11

-9%

21

69

-70%

Net income

M$

(51)

(8)

 

(59)

25

 

  1. Excluding profit oil reverting to the Gabonese Republic as per production sharing contracts.
  2. kb/d: Thousand barrels per day
  3. Including profit oil reverting to the Gabonese Republic as per production sharing contracts.
  4. Mb: Million barrels.
  5. Revenue from hydrocarbon sales and services (transportation, processing and storage), including profit oil reverting to the Gabonese Republic as per production sharing contracts.
  6. Funds generated from operations are comprised of the operating cash flow, the gains or losses on disposals of assets and the working capital changes.

     

Second quarter and first half 2020 statements

Selling Price

The selling price of the crude oil grade marketed by Total Gabon averaged $22.6 per barrel, during the second quarter 2020, down 44% compared to first quarter 2020.The price decline has been significant in April, before starting to recover gradually during the last two months of the semester, supported by the Brent price trend and the improvement of the price differential.

The selling price for the first half 2020 averaged 30,7 $/b, down de 51% compared to the first semester 2019.

Production

Total Gabon’s equity share of operated and non-operated oil production(1) amounted to 25,400 barrels per day during the first quarter 2020 down 9% compared to the first quarter 2020, due mainly to:

  • The unavailability of the Anguille field compressor, as works and restart have been delayed until the Gabonese borders reopened;
  • The natural decline of the fields.

This was partly offset by:

  • The gains from the well interventions campaign during the first quarter on the operated fields.

Total Gabon’s equity share of operated and non-operated oil production1 amounted to 26,600 barrels per day during the first half 2020 down 19% compared to the first half 2019, due mainly to:

  • The unavailability of Anguille field compressor, as works and restart have been delayed until the Gabonese borders reopened;
  • The partial unavailability of assets caused by compression and sand issues on the non-operated Grondin sector;
  • The natural decline of the fields.

This was partly offset by:

  • The gains from the well intervention campaign during the first quarter on the operated fields.

Revenues

Revenues amounted to $74 million in the first quarter 2020, down 35% compared to the first quarter 2020, mainly impacted by the declining average selling price during the quarter, and partly offset by a more favorable lifting program.

Revenues amounted to $187 million in the first half 2020, down 54% compared to the first half 2019, mainly impacted by the declining average selling price and the less favorable lifting program of the first quarter.

Funds generated from Operations

Cash flow from operations amounted to $31 million in the second quarter 2020, down 44% compared to the first quarter 2020. This is mainly due to the higher working capital, notably driven by receivables in relation to the price recovery during the end of the period.

Cash flow from operations amounted to $86 million in the first half 2020, down 41% compared to the first half 2019. This is mainly due to the lower prices and production. Besides the unfavorable environment, the net cash slightly increased by $2 million during the first half 2020 after the dividend payment.

_____________________

1 Including profit oil reverting to the Gabonese Republic as per production sharing contracts.

Capital Expenditure

Capital expenditure amounted to $10 million in the second quarter 2020, stable compared to the first quarter 2020, and to $21 million during the first half 2020, down 70% compared to the first half 2019. This includes mainly integrity works, a well intervention campaign on the operated field and the installation of a gas pipeline intended at first to improve the gas lift activation of wells from the Grondin sector. Its commissioning has been delayed due to the inability to mobilize necessary personnel resulting from closed Gabonese borders.

Net Income

Net income for the first quarter 2020 amounted to ($51) million, down compared to the first quarter 2020 mainly impacted by lower prices and production.

First half net income amounted to ($59) million, down compared to the first half 2019, mainly impacted by lower prices and production.

Highlights since the beginning of second quarter 2020

Corporate governance

Total Gabon's ordinary Shareholders' Meeting was held on May 29, 2020 in Libreville and approved the payment of a net dividend of $11 per share related to the financial year 2019, representing $49.5 million.

This dividend was paid on June 11, 2020 in an equivalent amount of €9.88 per share based on the European Central Bank’s rate of $1.1131 for one euro on May 29, 2020.

Given the available cash and the strong balance sheet, notably the lack of debt, the Board of Directors has decided today to call on an exceptional basis an Ordinary Shareholders’ Meeting on Monday September 21, 2020 and to recommend the payment of a dividend of $44.44 per share, for a total payout of $199.98 million for all shareholders.

Health and oil crisis

Following the dual health and oil crisis, the Company has communicated on April 20, 2020 on the implementation of an action plan to substantially reduce its costs and capital expenditures for 2020. This plan has not been modified and its implementation is carried out as planned.

Tax audit

Discussions are going on with the fiscal administration about the tax adjustments that have been notified for the fiscal years 2014 to 2017 as per the tax audit performed in 2019. Notwithstanding, a $15 million provision has been accrued during the second quarter 2020, corresponding to the amount of the tax adjustments that the Company has recognized. Total Gabon has also accrued a provision of $18 million pursuant to IFRIC 23 interpretation « Uncertainty over Income Tax Treatments » in its first half 2020 financial statements.

Refocus of the Company’s activities on its operated assets

Total Gabon has announced on July 30, 2020 that it has signed an agreement with Perenco aimed at divesting its interests in seven matures offshore fields, along with its interests and operatorship in the Cap Lopez oil Terminal.

This transaction helps Total Gabon first to concentrate on its main operated assets in order to make the most of it and second to guarantee the future of the Cap Lopez Terminal with the consolidation of the volumes from two major actors in Gabon into the same terminal. Total Gabon shall continue to implement all plans to maximize the value of our operated productions clusters at Anguille-Mandji and Torpille-Baudroie-Mérou.

In its first half 2020 financial statements, the Company has analyzed the envisaged transaction in the light of the norm IFRS 5 “Non-current assets held for sales and discontinued operations” and has concluded that the criteria were not fully met as of June 30, 2020. Consequently, the assets and liabilities related to the transaction have not been restated. The transaction price which is under negotiation does not affect the assets valuation applied in the June 30, 2020 financial statements of Total Gabon.