Total Reports First Writedown on Value of U.S. Shale Gas Assets
The explorer’s depreciation on Barnett shale holdings amounted to 700 million euros ($911 million) after taxes in the third quarter, according to Total’s spokesman Charles-Etienne Lebatard.
Total recognized a charge of 800 million euros of “special items” in financial results published today. The items were mostly from U.S. shale assets and a one-off 4 percent tax on crude and refined oil product inventories imposed by French President Francois Hollande as part of a 2012 austerity budget.
The impairment follows a combined $3 billion of write downs from BG Group Plc and Encana Corp. on the value of their gas properties in North America. BHP Billiton Ltd., the world’s largest mining company, also booked one-time charges of $2.84 billion on the value of U.S. shale gas assets in August after prices fell. Energy companies have had to adjust to price declines since a glut in supplies from booming shale production lowered futures.
Last month, the French company signed a 20-year deal to buy liquefied natural gas from Korea Gas Corp. from the Sabine Pass Terminal in Louisiana as a way to enter the emerging LNG export market in the U.S.
Total reported today a 20 percent rise in third-quarter profit, beating analyst estimates as earnings from refining improved.
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