TotalEnergies Gains 1.5% After Cutting Papua LNG Exposure by One-Third

This article first appeared on GuruFocus. TotalEnergies (NYSE:TTE), the integrated energy giant, climbed 1.5% to 77.27 on Monday after taking a knife to its Papua LNG exposure. The company plans to sell a 9.1-percentage-point stake to existing partners, cut its ownership to 20% and hand project control to Exxon Mobil. TotalEnergies keeps access to the gas without carrying the same construction burden. The financial surgery is substantial. Design revisions and fresh contract bids have slashed projected development costs by nearly $4 billion to roughly $14 billion, according to the company announcement. Papua LNG is designed to produce 5.6 million tonnes annually, primarily for Asian customers, while TotalEnergies retains 1.5 million tonnes of yearly offtake. The partners are aiming for a final investment decision in the fourth quarter. The ownership math tells the story. TotalEnergies' theoretical share of the budget drops from about $4.07 billion at 29.1% ownership to $2.8 billion at 20%, reducing its exposure by roughly $1.27 billion before financing and contractual adjustments. Meanwhile, the shares trade 39.71% above their $63.41 GF Value estimatea rich premium that suggests investors already expect disciplined execution and strong returns. With $9.8 billion of second-quarter cash flow, the company can fund its remaining commitment; the sharper move is making sure it does not fund more risk than necessary. More News