Integrated oil and gas company TOTAL S.A. (TOT) expanded its footprint in Africa by getting two exploration licenses, one onshore and the other offshore, from the Mauritanian government. TOTAL will be the operator of the two blocks with 90% working interest while the Mauritanian National Oil company (SMH) will hold the balance of 10%.
The offshore block C 9 is located 140 kilometers (86.9 miles) off the coast of Western Mauritania, covering an area of more than 10,000 sq. km (3,861 sq miles) in water depths ranging from 2,500 meters to 3,000 meters (8202–9,482 feet)
The onshore block Ta 29 is located in the Saharan desert, 1,000 kilometers (621.37 miles) east of Nouakchott and north of the Block Ta 7 in which Total is already conducting exploration activities.
We believe these exploration licenses will allow the oil major to build upon its existing positions in Mauritania. The company has been operating in Mauritania since 2005 and is exploring on shore blocks Ta 7 and Ta 8 in the Taoudeni basin with partners Sipex and Qatar Petroleum International.
TOTAL continues to enhance its presence in Africa, which incidentally is the prime contributor to the company’s total production. In the most recent quarter TOTAL’s hydrocarbon production averaged 2,319 thousand barrels of oil equivalent (kboe) per day, of which 623 kboe/d or 26.9% came from its African production hubs.
During the past year, the company discovered oil in the African nations of Congo and Nigeria, and started extensive drilling operation in Angola. All these operations, not taking into account the recent licenses, are likely to boost total production ahead.
Recently, the company expanded its footprint in the United States, through a tactical deal with Chesapeake Energy Corporation’s (CHK) arm – Chesapeake Exploration, L.L.C., and partner EnerVest Ltd and gained access in the much talked about U.S. Shale. TOTAL‘s exposure in the Utica Shale will be a positive catalyst for the company in the years to come.
TOTAL engages in aggressive drilling apart from acquiring strategic assets. It continues to leverage its strong financial position to clinch significant deals. TOTAL’s cash and cash equivalents as of September 30, 2011, were €19.94 billion. We believe the efforts at reorganization and aggressive drilling will enable the company to further expand its future operations.
TOTAL S.A. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations spanning five continents.
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