TotalEnergies SE (TTE) shares climbed Wednesday after the French energy major delivered an upbeat production outlook that suggests it's successfully navigating a challenging price environment.
The company expects fourth-quarter 2025 oil and gas production to rise nearly 5% compared to the same period last year. That acceleration pushes full-year 2025 production growth to approximately 4%, comfortably ahead of the company's earlier guidance calling for just over 3% growth. Not bad when crude prices have been working against you.
Here's where things get interesting: Exploration and Production results will reflect lower average liquids and gas sales prices quarter-over-quarter, following the company's published sensitivities as expected. But on a year-over-year basis, cash flow benefits from what TotalEnergies calls "accretive production growth"—essentially meaning the additional barrels are cushioning the blow. The production increase reduces the cash flow impact to roughly $6 per barrel despite an $11 per barrel decline in oil prices. That's some pretty effective damage control.
Downstream Strength Picking Up the Slack
The Integrated LNG segment is expected to deliver stable results and cash flow sequentially. Higher production following the Ichthys LNG turnaround and increased sales should offset a 5% drop in LNG prices, keeping things roughly even.
Integrated Power cash flow is anticipated to climb, supported by fourth-quarter farm-downs, which should push the segment above $2.5 billion for the full year.
The real star of the show appears to be Refining & Chemicals, where performance is projected to improve strongly by capturing more than a 30% rise in margins. Meanwhile, Marketing & Services results are expected to remain broadly flat sequentially in the fourth quarter.
Put it all together, and despite that year-over-year drop of over $10 per barrel in oil prices, TotalEnergies expects cash flow from business segments in the fourth quarter to stay on par with last year. Higher upstream production and ongoing improvements in downstream performance are doing the heavy lifting.
Capital Discipline and Recent Moves
TotalEnergies estimates net investments for 2025 will land around $17 billion, aided by over $2 billion in divestments during the fourth quarter.
Speaking of divestments, last month the company agreed to sell a 50% stake in its 424-megawatt wind and solar portfolio in Greece to Asterion Industrial Partners for 508 million euros (around $595 million). The company also announced that its subsidiary, TotalEnergies EP Nigeria, signed a Sale and Purchase Agreement with Vaaris to sell its 10% non-operated stake in the Renaissance JV licenses in Nigeria.
The company plans to release its fourth-quarter 2025 results on February 11.
Price Action: TotalEnergies shares were up 1.34% at $67.14 at the time of publication on Tuesday, trading near its 52-week high of $67.14.
