Integrated oil and gas company, TOTAL S.A. (TOT), announced that its subsidiary Total E&P UK has discovered gas and condensate in the West of Shetland on the United Kingdom Continental Shelf. The vicinity of the new discovery to TOTAL’s Laggan and Tormore development will enable the company to use its existing facilities in this area for developing the new findings.

The Edradour exploration well is situated in block 206/4, 47 miles North West of Shetland in a water depth of 300 meters. The well is drilled at a total depth exceeding 3,500 meters. Gas and condensate was discovered in a Cretaceous reservoir with good petrophysical properties.

Similar to Laggan and Tormore development, TOTAL is partnering with DONG E&P UK Limited for the development of the new findings. In this Edradour license, TOTAL will have a 75% interest and the remaining 25% will be held by DONG E&P UK Limited. TOTAL’s operations in the United Kingdom dates back since 1962 with 10% of 2009 total production derived herein.

The company’s UK business wing, Total E&P UK, will develop a few other fields in this country. Apart from the Laggan and Tormore development, the company will start work on Islay field development with first gas expected in the second half of 2011, while Phase 2 development of West Franklin field will result in production at end of 2013.

TOTAL is continuously working to improve its production portfolio globally through strategic alliance, acquisition and disposal of assets not in sync with its long-term goal.  Recently, TOTAL allied with Suncor Energy Inc. (SU) in three oil sands projects, located in Alberta, Canada.

Adjusted earnings of TOTAL for third-quarter 2010 were $1.42 per share versus $1.20 per share at the end of third-quarter 2009. The Zacks Consensus Estimates for fourth-quarter 2010, fiscal year 2010 and fiscal year 2011 are $1.55 per share, $6.13 per share and $6.80 per share, respectively.

TOTAL S.A. currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock.

France-based TOTAL is one of the largest publicly traded global integrated oil and gas companies based on production volumes, proved reserves, and market capitalization. The company has exploration and production operations across five continents.

 
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