PARIS (Reuters) – TotalEnergies announced on Thursday an agreement to sell its oil sands assets in Canada to Suncor for an initial sum of 5.5 billion Canadian dollars (about 3.65 billion euros), a transaction which will allow it to boost its return to shareholders.

The French group has accepted an offer from the Canadian group for additional payments of up to 600 million Canadian dollars. He thus opts for an operation that is easier to implement than a split project previously envisaged and therefore “sufficiently attractive to constitute an alternative”, he specified in a press release.

Given this sale, which is expected to be finalized before the end of the third quarter, TotalEnergies now plans to distribute at least 40% of its cash flow (CFFO) to its shareholders in 2023 – instead of 35 to 40% previously – , either by buying back shares or through an exceptional dividend.

The oil and gas group, also very present in renewable energies, also recorded in the first three months of the year an adjusted net profit of 6.5 billion dollars (-27%) and an adjusted Ebitda of 14 .2 billion (-19%).

According to a consensus compiled by Refinitiv, analysts on average were expecting adjusted net income of $6.5 billion.

At the same time, TotalEnergies’ hydrocarbon production fell by 11%, to 2.524 million barrels per day (Mb/d), after the deconsolidation of its stake in the Russian gas company Novatek on March 1.

Around 9:30 a.m., the TotalEnergies share fell by around 1.30% on the Paris Stock Exchange, whose CAC40 index rose by 0.1% at the same time.

“Overall, we consider this to be a decent set of numbers, with the surprise coming from the oil sands selloff,” RBC Capital Market analyst Biraj Borkhataria wrote in a note.

“The announcement of a distribution (to shareholders) at the top of previous forecasts is a positive signal for the sector,” he added.

MORE REFINING IN VIEW WITH END OF STRIKES

TotalEnergies also confirmed the increase in its interim dividends, with an amount of 0.74 euro per share for the first quarter, as well as the implementation of a share buyback program of up to 2 billion in the second quarter, the same amount as in the first quarter.

Regarding its outlook, the group underlined the ongoing decline in European refining margins while indicating that demand for petroleum products could be sustained in the coming weeks by the start of the summer period in the United States and by the recovery of global air traffic.

TotalEnergies also estimated that European and Asian gas prices should remain stable in the second quarter before rising in the second half, driven by the filling of stocks in Europe before winter and the recovery in demand in China.

For the second quarter, it anticipates production of around 2.5 Mb/d, with sales of liquefied natural gas (LNG) which would benefit from the restart of Freeport LNG and an increase in the utilization rate of its refineries – more than 80% – with the end of the strikes against the pension reform in France.

TotalEnergies has confirmed that it is counting on net investments of 16 to 18 billion dollars this year, including 5 billion dedicated to “low carbon energies”.

(Report Benjamin Mallet, with America Hernandez and Piotr Lipiński; edited by Bertrand Boucey)

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