This article
was originally published by Seeking Alpha on September 22, 2014.
By Sarfaraz
A. Khan
Summary: French
oil major Total has recently updated its cash flow and production outlook
through 2017, which wasn't encouraging. The company's turnaround has been hit
by project delays and asset sales. Is it time to give up on this company?
Over the last
couple of years, the French energy giant Total S.A (NYSE:TOT) has been eying a
turnaround. Since 2010, the company has sold $30 billion of assets and has used
the proceeds to fuel its turnaround between 2014 and 2017, a period in which it
projected to achieve production and cash flow growth, as opposed to the prior
years.
The company's
turnaround efforts have not gone as smoothly as it would have liked, partly due
to its exposure to less developed parts of the world such as Nigeria, Libya and
Kazakhstan, from where it has witnessed production outages.
Production Outlook
As RBC
Capital Markets predicted last week, Total has cut its production and cash flow
targets for the next year.
Earlier
today, Total released its latest production outlook numbers on the backdrop of
its annual investor day in which it significantly cut down its growth forecast.
The company now expects to grow its production from 2.1 million barrels of oil
equivalents a day to 2.3 million barrels by 2015 and 2.8 million barrels by
2017, as opposed to its previous production growth target of 2.6 million barrels
by 2015 and 3 million barrels by 2017.
