Total Energy (TTE.US) reduces debt through buyback plan, Q3 profits in line with expectations.

French energy giant TotalEnergies (TTE.US) reported profits in line with analysts' expectations as an increase in oil and gas production and stronger refining margins helped offset the impact of price declines. The financial report showed that its adjusted net profit for the third quarter fell by 2.3% to $3.98 billion, in line with average expectations. TotalEnergies' revenue for the third quarter was $43.84 billion, a 7.6% year-on-year decrease, $510 million below expectations. Production stood at 2.51 million barrels of oil equivalent per day. Cash flow from operating activities for the third quarter was $8.349 billion, up from $7.061 billion in the same period last year, benefiting from a $1.3 billion positive contribution from operating working capital. CEO Patrick Pouyanne stated in a statement on Thursday, "The company's strong financial performance is supported by a more than 4% increase in oil and gas production and improved downstream performance. During this period, oil prices were lower than the same period last year, due to concerns about oversupply caused by production increases from OPEC+ and other countries. Weak market conditions, coupled with low petrochemical demand in Europe, prompted TotalEnergies to cut expenses and buyback plans last month to control debt. By the beginning of the fourth quarter of 2025, the refining margin remained above $50 per tonne, reflecting disruptions in diesel supply and low inventory levels. With the expected increase in winter natural gas consumption, the forward price of European natural gas for the fourth quarter of 2025 and the winter of 2025/26 is expected to remain around $11 per million British thermal units. Given the recent trend in oil and gas prices over the past few months and the lagging effect of pricing formulas, TotalEnergies expects the average price of liquefied natural gas in the fourth quarter of 2025 to be $8.50 per million British thermal units. TotalEnergies expects its net investment for the year to remain in the guidance range of $17 billion to $17.5 billion, based on organic investments and expected asset disposals in the fourth quarter. Asset disposals in the fourth quarter are expected to total $2 billion, including the divestment of assets in Nigeria and Norway for exploration and production, and the transfer of renewable energy assets in North America and Greece for its integrated power business. Debt decreased slightly in the third quarter, with increased funding from asset disposals, and is expected to further decline by year-end. The French energy giant announced on Thursday that its net debt decreased from $26 billion at the end of June to $24.6 billion at the end of September. Due to a surge in debt this year, TotalEnergies' stock has lagged behind its American and British counterparts. Concerns among investors about borrowing prompted the company to reduce the size of its quarterly stock buyback last month and indicated that if oil prices continue to weaken, the buyback size next year could further decrease. Recent asset sales, including Argentine shale gas assets, as well as French wind energy and CECEP Solar Energy assets, have helped TotalEnergies reduce its borrowing. The company's debt ratio (an indicator of debt levels) was 17.3% at the end of the third quarter, and is expected to decrease to 15% to 16% by year-end. The company also announced that its American depositary receipts will be converted to ordinary shares starting December 8 and listed on the New York Stock Exchange. TotalEnergies sought this change to reduce the discount of its stock compared to its American peers.