TotalEnergies' capex cuts fail to ease investor debt concerns

By America Hernandez (Reuters) -TotalEnergies' plan to cut annual capital spending by $1 billion and sell more power assets failed to ease market concerns over its recent rise in debt, with shares falling 2% after CEO Patrick Pouyanne hosted an investor day on Monday. The capex cut, to $15–17 billion a year for 2027 to 2030, is part of a drive to save $7.5 billion, the oil major said in a statement. The group also said last week it planned to reduce quarterly share buybacks as it adapts to lower oil prices. "We can do the same growth but with less capex and opex (operating expenditure)," Pouyanne told investors. However, analysts at RBC called the changes "modest" and said the company could struggle to keep debt under current levels, given lower commodity prices. SOLAR SALE IS ONE OF SEVERAL Earlier on Monday, TotalEnergies said it would raise $950 million from the sale of a 50% stake in a 1.4 gigawatt U.S. solar portfolio to investment company KKR.  Pouyanne has said the sale is one of several meant to raise $3.5 billion by year-end to offset more than $3 billion in acquisitions that have contributed to a more than doubling of TotalEnergies' debt in the first six months of 2025. The group also plans to exit all power holdings outside of its strategic U.S., European, British and Brazilian markets, Stephane Michel, president of Gas, Power and Renewables, told analysts, including in India, home to 25% of its operational renewables assets in partnership with Adani Group.  "On renewables, I consider we have most of what we need," Pouyanne said, though added he was still on the hunt for lucrative gas power plants which work as backup power to intermittent wind and solar energy.  TotalEnergies also said on Monday it would purchase a 49% stake in Continental Resources' upstream gas fields in the U.S. state of Oklahoma, for an undisclosed sum. STRUGGLE TO SELL ASSETS Last week, the French company sold an oilfield stake to Shell for $510 million, but two other deals are in jeopardy. An $860 million sale of Nigerian oil assets fell through last week as buyer Chappal Energies failed to raise enough money. Pouyanne said he was in talks with another buyer.  In July, the sale of TotalEnergies' West of Shetland gas assets in Britain also fell apart, after would-be buyer Prax Group went bankrupt. TotalEnergies' gearing – a measure of net debt to equity – has leapt to 18% from about 8% in the first six months of this year. That figure rises to 28% when including $8.9 billion in leases and 9.75 billion euros ($11.37 billion) of hybrid debt. Quarterly earnings hit a four-year low this summer. Pouyanne said gearing would drop to 15% by year-end, though he was comfortable with a level under 20%. (Reporting by Alessandro Parodi and Alban Kacher in Gdansk, America Hernandez in Paris and Shadia Nasralla in London. Writing by Dominique Patton; Editing by Matt Scuffham, Barbara Lewis and Mark Potter)

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