Total (TTE.US) expects solid performance in the third quarter, with increased production and refining profits offsetting the impact of falling oil prices.

Total (TTE.US) said that despite the fall in oil prices, its third-quarter profit and cash flow may increase slightly due to increased oil and gas production and a significant increase in refining profits compared to last year. The French energy giant announced on Wednesday that, despite a year-on-year decrease in oil prices of $10 per barrel, the performance and cash flow of its various business segments are expected to remain stable or increase by 5%, thanks to growth in oil and gas production and improvements in downstream operations. The company stated that oil and gas production in the third quarter is expected to increase by 4% year-on-year, reaching 2.5 million barrels of oil equivalent per day. The performance and cash flow of the exploration and production business are expected to increase by over 4% compared to the second quarter, while downstream business performance and cash flow are expected to improve by $400 million to $600 million year-on-year due to expanding refining profits in Europe. The positive signal from this trading update pushed Total's stock price up by as much as 2.6% during trading before its third-quarter earnings report on October 30. Over the past few quarters, the company's stock price has been under pressure due to shrinking profits, leading the oil giant to reduce stock buybacks to control rising debt. Total stated that cash flow from its liquefied natural gas and power business in the third quarter is expected to be consistent with the previous three months. Thanks to an expected positive contribution of $1.2 billion to $2 billion in operating working capital, the company's asset-liability ratio is expected to improve by 0.5% to 1% compared to the end of the second quarter.