For Europe's oil ang gas firms geopolitics is in the driving seat - analyst Proactive uses images sourced from Shutterstock JP Morgan sees geopolitics reclaiming the driver’s seat for European oil and gas equities, arguing that a higher risk premium has helped push oil prices up, and dragged energy shares higher year-to-date in the process. The bank's analysts, in a note, said the sector’s recent performance has “re-coupled to rallying oil prices” after a stretch of “positive decoupling” in the second ha ...

2025 Results & 2026 Objectives Delivering accretive energy growth, while strengthening resilience Delivering accretive energy growth, while strengthening resilience February 11, 2026 February 2026 – Results and Objectives | 2 Table of contents 03 | Safety, our core value 04 | Relentlessly reducing emissions 06 | 2025: delivered growth while preparing 2030+ 07 | Delivered on our growth objectives 08 | Sustaining attractive distributions supported by accretive growth and strong balance sheet 09 | Disciplined ...

Core Viewpoint - TotalEnergies and Galp reaffirm their long-term commitment to Namibia and provide updates on their partnership in offshore licenses in the Orange Basin [1] Group 1: Company Commitment - Patrick Pouyanné, Chairman and CEO of TotalEnergies, and Paula Amorim, Chairman of Galp, held a meeting with Namibia's President to discuss their ongoing partnership [1] - The meeting emphasizes the companies' dedication to the development of key offshore resources in Namibia [1] Group 2: Partnership Progress - The discussion included updates on the progress and next steps of their recently announced partnership in the Orange Basin [1] - The partnership aims to enhance exploration and production activities in the region [1]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the upcoming 4Q25 earnings season for Europe's Big Oils, starting with Equinor on February 4th, 2026, and the guidance for 2026 is expected to be a key topic [1][9] - The preference ranking for investment is Oil Services > Big Oils > Exploration & Production (E&Ps), with TotalEnergies (TTE) highlighted as the top pick among Big Oils [1] Core Insights and Arguments - The $60/bbl Brent price assumption is challenging for Europe's Big Oils, leading to a projected decline in refining margins by 35% compared to 4Q25 [2] - Capital expenditure (capex) budgets are expected to remain flat, with an average buyback cut of approximately 25% across the sector, except for TTE [2] - TTE and Galp are noted for their organically falling breakeven Brent prices, with TTE's Integrated Power business transitioning from a drag to a contributor to free cash flow (FCF) [3][11] - TTE's recent trading update has positively influenced consensus estimates, contrasting with downgrades from peers like BP and Shell [4] Financial Projections - The aggregate organic cash flow from major companies is projected to show a $16 billion deficit post distributions, which decreases to approximately $5.5 billion after accounting for inorganic cash flows [13] - TTE is expected to have the lowest organic breakeven price in the peer group at around $60/bbl for 2026, with projections of it dropping below $55/bbl by 2027 [14][16] - TTE's capex is anticipated to decline by over 10% year-on-year in 2026, with a significant reduction expected by 2028 [17][20] Balance Sheet and Debt Analysis - The analysis indicates that all Big Oils will reduce shareholder distributions in 2026 compared to 2025, with Equinor expected to see the most significant declines [22] - BP is projected to maintain the highest gearing in the peer group at around 40%, while TTE and Galp are expected to decrease their net debt year-on-year [31][36] Market Sentiment and Consensus - The consensus estimates for 4Q25 earnings have been revised down by 8% year-to-date, with TTE showing a rare positive update that has led to flat revisions compared to an average 8% downgrade across peers [49] - The overall sentiment indicates a cautious outlook for cash flows, with aggregate payouts expected to exceed 140% of organic FCF at the $60/bbl Brent price [10] Upcoming Catalysts - Key upcoming earnings reports include Galp and Equinor on February 4th, followed by several other companies throughout February [62] Additional Insights - The report emphasizes the importance of cash flow cushions and balance sheet strength, particularly for TTE and Equinor, as they navigate the challenging oil price environment [10][11] - The analysis suggests that the market may have already priced in the expected cuts to buybacks, indicating a potential for volatility in stock performance as earnings reports are released [65] This summary encapsulates the critical insights and projections regarding the oil industry and specific companies, particularly focusing on TotalEnergies and its competitive positioning within the sector.

Core Insights - The merger between Galp and Moeve aims to consolidate their downstream operations, creating a significant player in the Southern European refining and retail market with a combined capacity of approximately 710,000 b/d [4][13] - The merger is strategically designed to enhance retail integration and scale, allowing the combined entity to better navigate the competitive landscape and adapt to evolving market demands [11][12] Refining Capacity and Configuration - The merged system will include three core refineries: San Roque (250,000 b/d), La Rábida (240,000 b/d), and Sines (225,000 b/d), collectively accounting for nearly 30% of Spain's national distillation capacity [2] - The refineries are configured to optimize gasoline and middle-distillate yields, with diesel/gasoil making up about 40% of output, gasoline around 20%, and jet fuel typically 10-15% [1] Demand Trends - Gasoline demand in Spain has shown unexpected growth, peaking at approximately 187,000 b/d in July 2025, with an annual growth rate of 8% for 2025 [5][6] - Diesel demand remains stable, reflecting the dominance of diesel engines in the vehicle fleet, while the anticipated decline in clean-product demand has not yet occurred [7] Vehicle Sales and Market Dynamics - By mid-2025, hybrids accounted for about 40% of new car registrations in Spain, supporting gasoline consumption rather than displacing it [8] - The tourism sector has also contributed to gasoline demand, with record visits to Spain and Portugal in 2025 [8] Export and Competitive Landscape - The increase in domestic gasoline consumption has reduced the volume of clean products available for export, with Moeve's clean-product exports from Spain averaging around 65,000 b/d, approximately 32% below 2021 levels [9] - The export environment has become more competitive due to new capacities in the Middle East and India, impacting Mediterranean trade routes [10] Retail Integration and Strategic Positioning - The merger will create a network of around 3,100 service stations, enhancing captive demand and improving product placement synergies [11] - The long-term rationale for the merger includes adapting to stricter climate policies and transitioning towards renewable fuels, with both companies pursuing biofuels projects [12][13] Strategic Implications - The merger positions Galp and Moeve to focus on higher-return upstream growth while maintaining exposure to downstream cash flows [13] - The transaction represents a strategic challenge to Repsol, the regional leader, which has yet to articulate a comparable downstream strategy [13]

Oil Market Insights - Iran protests have contributed to a bullish start for 2026, raising concerns about potential supply disruptions, with ICE Brent prices nearing $63 per barrel, marking a $2 increase and the third consecutive weekly gain [2] - The US government's inability to attract investments from oil majors in Venezuela has tempered expectations for a near-term surge in Venezuelan oil production, despite Treasury Secretary Bessent's encouragement for 'wildcatters' to drill [2][6] Geopolitical Developments - The US military seized a Russian-flagged tanker after a three-week pursuit, highlighting ongoing tensions in maritime oil transport [3] - Iraq has approved the nationalization of the West Qurna 2 oilfield, previously operated by Lukoil, due to US sanctions, with operations now under the control of state-owned Basrah Oil [4] Mergers and Acquisitions - Rio Tinto and Glencore are in early discussions to merge, potentially creating the world's largest mining company valued at $207 billion, building on a previous stalled merger proposal [5] - Spanish and Portuguese refiners, Moeve and Galp, are negotiating a merger of their downstream businesses, aiming for a combined capacity of 690,000 b/d, which represents 5% of Europe's refining capacity [7]

Core Viewpoint - Sintana Energy Inc. has successfully listed its common shares on the AIM market of the London Stock Exchange, marking a significant milestone following its acquisition of Challenger Energy Group and aiming to enhance liquidity for shareholders [1][3]. Company Overview - Sintana Energy holds a diversified portfolio of interests in high-impact assets across multiple jurisdictions, including eight licenses in Namibia and Uruguay, and a pending interest in Angola, along with legacy assets in Colombia and The Bahamas [4][27]. - The portfolio is anchored by significant discoveries at Mopane in Namibia, providing exposure to various geological plays and regulatory environments [5][27]. Market Position and Strategy - The company’s market capitalization at the time of admission is approximately £128 million, positioning it as a notable player in the small-cap exploration sector [11]. - Sintana's strategy focuses on maintaining a portfolio that is predominantly carried through exploration and development by experienced operators, minimizing capital exposure for shareholders [9][11]. Exploration Focus - Sintana's current exploration activities are concentrated in Namibia and Uruguay, both recognized as global exploration hotspots, with ongoing seismic campaigns and drilling expected over the next 24 months [6][7]. Partnerships and Collaborations - The company has established partnerships with reputable operators such as Chevron and Galp in Namibia and Uruguay, enhancing its operational capabilities and resource access [7][10]. Financial Arrangements - Sintana has entered into a facility agreement with Charlestown Energy Partners for a working capital facility of up to US$4 million, intended as a standby source of funding [13][14]. - The facility is unsecured and available until June 30, 2028, with specific terms regarding drawdowns and interest rates [15][17]. Share Issuance and Severance - In connection with the acquisition, Sintana issued 2,512,943 common shares as severance payments to certain directors and officers, valued at a total of CDN$1,417,030 [21][22]. - The issuance of these shares is classified as a related party transaction but is exempt from formal valuation and minority shareholder approval under applicable regulations [23][19]. Total Voting Rights - Following the admission, Sintana's issued and outstanding share capital will consist of 510,356,240 common shares, which shareholders can use to determine their interest in the company [25].

Core Viewpoint - Sintana Energy Inc. is set to admit its common shares to trading on the AIM market of the London Stock Exchange, with trading expected to commence on December 23, 2025, following its acquisition of Challenger Energy Group [1][3]. Company Overview - Sintana holds a diversified portfolio of interests in high-impact assets across multiple jurisdictions, including Namibia, Uruguay, and a pending interest in Angola, along with legacy assets in Colombia and The Bahamas [3][4][21]. - The portfolio includes interests in eight licenses, with a significant focus on the Mopane discoveries in Namibia [4][11]. Strategic Attributes - The company benefits from a diversified portfolio that provides exposure to various geological plays and geopolitical regimes [4][21]. - Sintana's focus on Namibia and Uruguay positions it in global exploration "hot spots," with significant exploration activities anticipated over the next 24 months [5][6]. - Established partnerships with reputable operators like Chevron and Galp enhance Sintana's operational capabilities [6][9]. Financial Position - Sintana's market capitalization at the time of admission is expected to be approximately £107 million, with cash and liquid resources exceeding US$10 million [10]. - The company aims to maintain reduced capital exposure through carried interests in its exploration projects, minimizing the capital required from Sintana [7][8]. Exploration and Development - The portfolio includes highly prospective exploration prospects, particularly in the Mopane area, which has already yielded significant discoveries [11][13]. - Recent developments include the issuance of permits for seismic acquisition in Uruguay, indicating ongoing exploration activities [13][14]. Share Issuance and Corporate Actions - Sintana plans to issue 2,512,943 common shares as severance payments to directors and officers, totaling CDN$1,417,030 [15][16]. - The issuance is expected to be exempt from formal valuation and minority shareholder approval under applicable regulations [17][18].

Key Takeaways from the Conference Call Industry Overview - The focus is on the oil and gas industry, specifically the dynamics between Oil Services, Big Oil, and Exploration & Production (E&Ps) sectors - The preferred sector strategy is Oil Services > Big Oil > E&Ps, indicating a bullish outlook on Oil Services due to expected revenue growth and margin expansion [1][9] Core Insights and Arguments - **Brent Oil Price Forecast**: A forecast of $60 per barrel for Brent oil in 2026 is expected to create significant pressure on free cash flow (FCF) across sectors, with E&Ps facing the most strain, followed by Big Oils and then Oil Services [1][2] - **Revenue Growth**: European Oilfield Services (OFS) are projected to see a 5% year-over-year revenue growth in 2026, while Big Oils are expected to experience nearly flat production growth [1][9] - **Earnings Estimates**: The average year-over-year EBITDA growth is estimated at +5% for OFS, -4% for Big Oil, and -10% for E&Ps under the $60/bbl Brent forecast [2][9] - **Capex Trends**: Industry capital expenditures (capex) are expected to flatline, further squeezing FCF and impacting cash returns to shareholders, with Big Oil buybacks projected to decrease by nearly 25% year-over-year [2][9] Company-Specific Insights - **TotalEnergies (TTE)**: Identified as a top pick due to its resilience and undervaluation, with a breakeven oil price expected to decline through organic growth in oil and gas volumes [3][4] - **Galp**: Noted for its significant production growth, projected at over 10% in 2026, which stands out among European Big Oils [4][36] - **Saipem**: Expected to benefit from margin expansion and a strong order book, with a projected 20% year-over-year EBITDA growth in 2026 [26][28] Additional Important Insights - **E&P Sector Vulnerability**: The E&P sector is facing significant challenges, with many companies carrying high debt levels and cash flow break-evens above the $60/bbl forecast, leading to limited defensive options [24][46] - **Dividend Yields**: Some E&Ps are offering double-digit dividend yields as a form of protection against market volatility, with Ithaca Energy highlighted for its strong balance sheet and low break-even price of $45/bbl [45][46] - **Balance Sheet Pressure**: The overall balance sheet strength of Big Oils is under scrutiny, with increasing net debt levels despite asset disposals, indicating a need for more inorganic growth cushions [23][24] Conclusion - The oil and gas industry is navigating a challenging environment with a $60/bbl Brent oil price forecast, impacting cash flows and shareholder returns across sectors. Oil Services are positioned to perform better than Big Oil and E&Ps, with specific companies like TotalEnergies and Galp standing out for their growth potential and resilience.

Core Insights - TotalEnergies has formalized its operatorship over Namibia's two largest offshore oil discoveries, Mopane and Venus, through a strategic asset swap with Galp [1][3] Group 1: Transaction Details - TotalEnergies will acquire a 40 percent operated interest in PEL 83, which contains the Mopane discovery, while Galp will receive a 10 percent interest in PEL 56 and a 9.39 percent interest in PEL 91 [2] - TotalEnergies will carry 50 percent of Galp's capital spending for exploration, appraisal, and initial development on PEL 83, with repayment linked to Galp's future cash flow [4] - The agreement does not reflect new resource findings but is a restructuring of ownership aimed at unlocking development synergies [5] Group 2: Strategic Implications - The deal strengthens TotalEnergies' position as the lead developer in Namibia's Orange Basin, controlling both Mopane and Venus, which could form a multi-field producing hub [3][7] - TotalEnergies is on track to progress Venus toward a possible final investment decision in 2026, pending ongoing technical and commercial assessments [6] - The consolidation of operatorship enhances TotalEnergies' ability to design a coordinated development strategy, advancing Namibia toward its first oil production later this decade [7]