TotalEnergies, operating under the ticker symbol TTE, has recently made significant waves in the energy sector. The company sealed a deal with Lewis Energy Group to acquire a 20% stake in Dorado leases within the Eagle Ford shale region. These leases, currently under the operation of EOG Resources Inc. with an 80% interest, will fortify TotalEnergies’ foothold in the United States through boosted natural gas production volumes in Texas.
By 2024, the Dorado field acquisition is poised to elevate TotalEnergies’ net U.S. natural gas output by 50 million cubic feet per day (Mcf/d), with the potential for an additional 50 Mcf/d by 2028. The company’s net U.S. natural gas production hit close to 340 Mcf/d in 2023, while its total natural gas output from the Americas amounted to 941 Mcf/d in the same year.
Embracing the LNG Export Scene
TotalEnergies’ recent move aligns seamlessly with its overarching strategy to enhance its LNG portfolio on a global scale. The company proudly stands as the largest LNG exporter in the United States, boasting an export capacity exceeding 10 million tons (Mt) in the year 2023. This is largely thanks to its substantial 16.6% ownership in the Cameron LNG plant situated in Louisiana, as well as several enduring purchasing agreements.
Looking forward, TotalEnergies foresees augmenting its LNG export volumes from the United States, anticipating a capacity surge to 15 Mt/y by 2030 post the initiation of the initial phase of the Rio Grande LNG undertaking in Texas, presently under active development.
Moreover, in 2023, the company solidified its presence in Europe by installing two floating regasification terminals. Extending its collaboration with Oman LNG for another decade and with Qalhat LNG for an additional five years will further fortify its global LNG footprint.
Projected Global Upsurge in LNG Demand
According to the International Energy Agency (“IEA”), LNG is set to skyrocket in popularity, becoming a pivotal contributor to international gas trade, projected to grow by 21% between 2019 and 2025. The IEA accentuates that emerging Asian markets will lead the charge in the expansion of LNG imports, closely followed by European nations.
This spike in LNG demand bodes well for major players like Shell plc and Chevron Corporation. Shell and Chevron are dedicated to ensuring global access to dependable and cost-effective energy sources as the world shifts towards a cleaner, sustainable future.
Notably, Shell and Chevron boast a long-term (three-to-five years) earnings growth rate of 4% and 5%, respectively. The Zacks Consensus Estimate reveals a positive outlook, with a 2.9% and 0.7% increase in Shell and Chevron’s 2024 earnings per share, respectively, over the past 60 days.
Performance and Rankings
Over the last six months, TotalEnergies’ shares have gained a commendable 12%, though this growth slightly lags behind the broader industry’s surge of 17.3%.
Image Source: Zacks Investment Research
Insightful Zacks Ranking
Presently, TotalEnergies holds a Zacks Rank #3 (Hold). For a list of top-performing Zacks #1 Rank (Strong Buy) stocks, consider exploring the complete list here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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