TotalEnergies SE (TTE) 2018 Q2 法說會逐字稿

Good day and welcome to TOTAL's Second Quarter 2018 Results Conference Call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Patrick de La Chevardiere, CEO.

Please go ahead.

Hello.

Patrick de La Chevardiere here.

We have reported a strong set of second quarter results.

On the quarter-to-quarter basis, adjusted net income increased by 23% to $3.6 billion or $1.31 per share.

Debt-adjusted cash flow, DACF, was $6.8 billion, an increase of $1.1 billion compared to the first quarter.

And net cash flow was very strong at $3.9 billion.

Thanks to major project ramp-ups and our recent acquisitions, we are well positioned to capture the higher Brent price with strong production growth and an organic per division breakeven of less $25 per barrel.

Going straight to the segments, E&P is in great shape with adjusted net operating income of $2.7 billion in the second quarter, an increase of 23% compared to the first quarter.

By comparison, Brent increased by 11% to $74 per BOE.

E&P cash flow increased by 20% to $5.1 billion.

Production was 2.72 million barrel of equivalent per day in the second quarter, a slight increase from the first quarter with the full quarter of Maersk more than compensating for higher maintenance in the second quarter mainly in the North Sea.

It is indeed quite unusual to increase production from the first to the second quarter.

Second quarter production increased by 9% compared to the same quarter last year.

We now anticipate that 2018 production growth should be above 7% so we are continuing to deliver industry-leading production growth.

Looking at this in more detail, Maersk is fully onboard now and we have Kashagan (inaudible) LNG continuing to ramp up.

The startup of Ichthys, Kaombo, Tempa Rossa and Egina will (inaudible) in the second half and these are good cash equities (inaudible).

And next year, growth will be driven by ramp-ups of these projects and the next wave of major startups into (inaudible).

So the momentum is strong and it is welcome with high prices.

During the second quarter, we sanctioned Zinia 2 in Angola.

After re-engineering the project and taking advantage of the low oil cost environment, we succeeded in cutting the investment amount by more than half.

In addition to Zinia 2, we have recently restarted in-fill drilling programs on major fields in our core areas and we took FIDs on (inaudible) field at GNRG and a new phase of drilling for Al-Shaheen.

The gas renewable power segment generated about $200 million of adjusted net operating income in the second quarter reflecting better results from gas cutting and new energies.

Earlier this month, we closed ENGIE LNG acquisitions and this positioned TOTAL as the second largest player in the fast-growing LNG business.

Also in LNG, we announced in May that we are taking a direct 10% stake in Arctic 2 in Russia, further expanding the LNG portfolio.

In July, we closed the acquisition of 73% of Direct Energie.

We have TOTAL representative on the board and the offer period to acquire the remaining shares has been launched.

We are committed to growing along the gas electricity chain and this acquisition is a big step toward achieving critical mass in our two largest markets for electricity distribution, France and Belgium.

Turning to the downstream.

Refining and chemicals contributed $821 million of adjusted net operating income in the second quarter, an increase of 14% compared to the previous quarter.

The European Refining Margin Indicator recovered from a seasonally weak first quarter and has averaged $35 per ton in the second quarter.

Pet-chem prices remain strong, but rising net asset stock costs affected margins in Europe.

We completed some maintenance programs in the second quarter, the most important being Antwerp and Normandy pet-chem, so we can expect better margin capture going forward.

R&C generated $1 billion of cash flow in the second quarter, bringing its year-to-date contribution to $1.9 billion.

For the future growth in R&C, we are concentrating investment on petrochemicals and targeting opportunities to take advantage of low-cost feedstock.

We have 2 ongoing expansion projects in the U.S. and Korea.

We also launched 2 studies recently, a project in Saudi Arabia with Saudi Aramco to strengthen the integrated set-up platform and capture of synergies plus another project in Nigeria with Sonatrach.

And in France, we are converting La Mede to a biorefinery and we'd be producing renewable biodiesel later this year.

From marketing and services, the main message is that we are continuing to grow this high-return business, demonstrated best by a 11% increase in refined product sales outside Europe in the second quarter.

Adjusted net operating income from marketing and service was $478 million, an increase of 30% compared to the first quarter.

The combined downstream segments, refining and chemical plus marketing and services generated cash flow of $1.7 billion in the second quarter, in line with our guidance for the full year.

For the first half 2018, downstream generated cash flow of $3 billion and a ROTCE of close to 28%.

Moving to the group numbers, we generated $6.8 billion of debt-adjusted cash flow in the second quarter.

And for the first half, the group generated a robust debt-adjusted cash flow of $12.5 billion.

Although oil prices are above $70 per barrel, we are relentless in our demand for discipline on investment and OpEx including the rapid capture of synergies from new assets.

For the group, we have increased our cost-reduction target for 2018 from $4 billion to $4.2 billion.

Net capital investment, which includes organic investments plus acquisition and divestments, was $2.5 billion in the second quarter.

For the first half, net capital investment was $6.7 billion including $1.3 billion of net acquisitions.

Note that net investment in the third quarter will include about $3 billion for ENGIE LNG and Direct Energie.

We confirm the full year 2018 guidance at $16 - $17 billion.

So again we are delivering on the commitment we have made in February.

With this strong growth in cash flows and discipline on spend, net cash flow as $3.9 billion for the quarter and $5.1 billion for the first half.

Profitability is also continuing to improve.

Return on equity increased to 10.9% for the 12 months ended June 30, 2018.

And the ROTCE of the group is now back above 10% for the first time since the oil price crash.

We are committed to maintain the strong balance sheet and at the end of the second quarter, our net debt to capital ratio was 16.5%.

This is a small increase from the first quarter due to the timing of the AGM.

We made two dividend payments in the second quarter.

So we made three dividend payments in the first half and the cash out impacted our net debt.

We bought back 19 million shares in the second quarter bringing the total to 28 million shares for first half.

The 28 million shares include 18 million shares to eliminate dilution from the scrip.

We bought back an additional 10 million shares for about $600 million as part of the $5 billion buyback announced in February.

So in addition to increasing the (inaudible) dividend by 3.2%, we are delivering on our commitment to share the oil price upside with our shareholders through the buyback.

These results demonstrate that we are taking advantage of the favorable environment.

Production growth is providing strong momentum for cash flow going forward.

Our counter-cyclical strategy acquiring Maersk Oil and Petrobras assets clearly rewarded us in the environment.

We are confident that we can continue to successfully implement our strategy and deliver on our commitment to shareholders.

We look forward to providing you with more detail in September at our investor day presentation at the New York Stock Exchange, and now we can start the Q&A.

(Operator Instructions) We will take our first question from Oswald Clint from Bernstein.

I wanted to ask about the ENGIE LNG deal, which has closed out this month.

When -- I mean obviously we should expect some earnings contribution 3Q, 4Q, but is there like optimization or a kind -- I guess optimization is the word -- is there optimization TOTAL can do with this portfolio through changing some of the contracts and the destinations to enhance the profitability of kind of the larger LNG portfolio with TOTAL?

Is that something that's possible?

And if so, is it possible in the short term?

Or it will take a couple years to actually go through those contracts?

And a second question, please, was on your CapEx, the $16 billion to $17 billion for the year being reiterated.

You did make a comment there around increasing in-fill drilling within your core base.

And so that's been included within your CapEx guidance.

Does that mean something is moving out of your CapEx guidance for this year?

Or the cost of that in-fill drilling is just particularly low?

And prior to answering your question, I'd like to repeat that we at TOTAL are able to refer to shareholder an impressive growth while maintaining discipline.

We increased our OpEx saving target to $4.2 billion.

We deliver an organic pre-dividend breakeven below $25 per barrel.

And our profitability is more than double-digit with a ROE at 11%.

So your first question about ENGIE LNG optimization.

It's a business which you can play well when you have a portfolio, a large portfolio.

The ENGIE deal was closed mid of July, the 13th.

We are building on Group's competitive advantage with strong technological and commercial expertise.

It is in line with our strategy to expand along the gas value chain.

We are doubling our LNG portfolio to consolidate our position as world number 2. The point is not to be number 2. The point is to have a large portfolio, and managing this portfolio of 40 million ton a year in 2020 will represent 10% of the market.

So we can mix many, many arbitrage.

TOTAL is positioning, by this transaction, itself to capture strong market growth, 10% in 2017.

I remind you that was a big growth.

And the ENGIE LNG acquisition is financially extremely attractive with a growing cash flow from operation impact over time.

At $60 per barrel for 2019, we expect $100 million to $200 million a year with strong upside, and we have an NPD for our synergies above $100, maybe $150 million.

That's about ENGIE.

The main thinking you should have on ENGIE is the portfolio effect.

So your second question was about CapEx.

Yes, the in-fill drilling are included in our $16 billion, $17 billion guidance.

We expect our CapEx to pick up second half of this year as we sanction new projects like Johan Sverdrup, Ikike, of some short cycle in North Sea in Qatar.

And in addition you know traditionally downstream spends more in the second part of the year.

On the other end, we are exiting a period of heavy investment as projects start up and the new projects we are launching are less capital-intensive.

We, as I said it starting my answer to you, we remain disciplined and keep our guidance for capital investment at $16 billion to $17 billion this year and $15 billion to $17 billion for year 2019, 2020.

And I remind you this is a mix between organic CapEx and net acquisition.

We will now take our next question from John Rigby from UBS.

Two questions.

One actually picking up on where you just left off.

With the closing of a couple of big deals in 3Q and your comments around the success of acting counter-cyclically, can we expect the pace of disposals, I guess out of E&P, to pick up over the next 6 to 12 months as you begin to sort of play the other side of that transaction -- of that deal?

And does the production guidance that you provide for this year include or exclude any effects of planned disposals?

And then there's just the second question is I guess oil prices are exceeding the levels that you expected in your planning or your budgeting.

You're obviously buying back stock, but you're also generating free cash flow.

You have an existing buyback target or indication.

At the margin, if you're exceeding expectations in free cash flow generation, where are you likely to put that excess cash?

Is it likely to supplement the buyback?

Or is it to reduce your net debt?

As you said, we are counter-cyclical.

It's time for us to sell.

There is no emergency.

We face no difficulty.

We just need to get the right price for the asset we have put in place.

And you may wait maybe 6-12 months to see the result of this new trend on us to start up and try to monetize asset, as we did for Martin Linge, for instance, last quarter.

The next question was what to do with our excess cash.

If you remember our slide with the allocation of cash flow from operation, we wanted to reduce our debt, maintain our gearing below 20%, and then increase share buyback; increasing, meaning increasing the speed at which we make it.

And this is what we are doing, basically, now.

We will, with the $3 billion acquisition you notice ENGIE LNG and Direct Energie, we have a $3 billion cash out next quarter.

We need to repatriate cash flow from ops in our balance sheet to maintain our gearing.

And we will, I think, slightly increase the pace at which we will buy back shares.

We will now take our next question from Christyan Malek from JP Morgan.

There's just 2 if I may, Patrick.

First of all, just to sort of follow on.

I mean so key factors, aside from oil price, in terms of phasing of buyback and sort of scoped increase beyond the targeted $5 billion, so sort of assuming you do accelerate the pace of it, where does the excess cash go?

Does it go into lowering the gearing or versus sort of actually raising that target beyond $5 billion?

And if it's the former, would that imply or suggest that you're actually looking to do future M&A over the medium term?

The second question, in terms of cash breakevens, you've had a fantastic show for the quarter in terms of managing lower to sort of the low 50s.

But in terms of thinking about the medium term CapEx guidance, you talked about $15 billion to $17 billion.

Is that something we should assume is sort of as a base case in terms of thinking about the equilibrium around cash breakevens over the medium term?

Or should we still be thinking about the lower end of the range?

The first question about cash allocation.

We -- and I haven't -- and we do maintain -- I haven't increased the overall $5 billion target for share buyback.

And I precisely said that I maintain this target.

And we may speed up the process of buying back shares; what we will start, I think, this third quarter.

Thereafter, I'll remind you that maintaining the gearing below 20% is important for us.

So we will allocate most of the cash this quarter as the excess cash to gearing maintaining -- maintaining the gearing and increasing, maybe slightly, the pace at which we buy back shares.

The cash flow and the breakeven.

I will comment the organic cash breakeven which is as planned as in February 2018.

We generate $6.4 billion cash flow this quarter before working capital.

And so working capital for TOTAL this quarter was basically stable.

Our organic CapEx were $2.8 billion.

We generate $3.6 billion of organic free cash flow at the oil price in average at $74 per barrel.

And using our sensitivity of $2.8 billion of cash flow for $10, the pre-dividend organic breakeven was exactly $23 per barrel.

Using a full cash dividend, our breakeven post dividend was below 50% -- $50 per barrel, sorry, down year-on-year and Q-to-Q as we carry on improving the overall performance of the businesses.

It is not only because the oil price has increased that we change our strategy here.

We do not change our strategy.

We remain firmly focused on the efficiency program including the cost-cutting program and the CapEx maintenance.

We will now take our next question from Martijn Rats of Morgan Stanley.

I had a few sort of practical questions.

I wanted to ask you about Kaombo first of all.

The Angolan loading program is showing a pretty decent sort of rebound in September and I was wondering if this is basically driven by Kaombo coming on around that time.

The other thing I wanted to ask you about is Yemen LNG.

It's a project that has been mothballed ready for quite some time.

But there's no particular sort of reason to ask you about it now, but I just wanted to ask is there any prospect that this could come back?

A lot of companies are talking about doing LNG FIDs again and this would be easy to -- it could come back relatively quickly if the security situation allowed it, and that would change, of course, somewhat of the supply and demand balance.

And then, finally, like one question working capital.

Flat working capital in quarter where the oil price changed so much; how did you do it?

Kaombo startup, Kaombo North startup, it's a matter of days.

So when you read the both the location and Angola rebonding, I think your intuition is right.

Yemen LNG is cocooned at the moment.

If we were to face a stable environment in Yemen, we could restart this -- resume again those operations.

But that's not the case today.

And I'm not expecting Yemen starting again soon.

Working cap.

You remember 2 years ago we had difficulty in managing our working cap.

And it's difficult to manage working cap, actually.

So we have put in place a group of people and we review the working cap not at any management committee meeting, but every quarter.

We review the working cap every quarter with all the management of the branches, Patrick Pouyanne and myself, and we try and understand why the working cap was deteriorating or getting better depending on the quarter.

And we give some guidance to the people so that they reduce their inventories so that they speed up their payments.

So very basic decision, which improves the working cap.

I have to say that by year-end this year, assuming a stable oil price environment as it is today, we would like to recover between $1 billion and $2 billion of working cap more than what we had spent this year.

Beginning of this year to today, we spent basically $3.5 billion and we would like to recover $1 billion to $2 billion of this working cap.

We will now take our next question from Irene Himona from Societe Generale.

My first question concerns divisional tax rates.

If I am right, both E&P and R&C had reduced tax rates in the quarter sequentially.

I wonder if you can discuss the drivers and, importantly, give us some guidance for full-year expected sort of tax rates.

My second question, on gas and renewables, you had a $424 million special charge in the quarter.

I wanted to find out what you impaired.

And finally, OpEx, you're increasing the target.

Can you talk a little bit about the sources of the cost reduction?

So what new things are you doing?

Or is it the same old things that you're able to extract more efficiencies from?

Tax rate first.

It is true that we are monitoring our tax rate very carefully and that sequentially the tax rate by mainly E&P as a volume of taxes was slightly down.

This is basically due to one element of one concession, which has been extended so that we could have the value of our past losses being a tax asset.

Without extension, there were no possibility to value those tax losses, and with the extension we have the possibility to use those tax losses.

So we activate a tax gain there.

That's about $100 million.

The asset we impaired are 2 plant of simple wear for -- and we impaired for about $400 million -- (inaudible) than $400 million if I would remember.

That's mainly impairment.

And this is the only impairment we had this quarter.

The last question was about how do we do to increase our OpEx cutting target.

Irene, I already told you we were fat and there is still some fat.

We are monitoring every month the progress we made in our cost-cutting program, reviewing line by line.

And this is by managing that and incentivizing the people doing good work that we manage to increase our saving.

We will now take our next question from Theepan Jothilingam from Exane BNP Paribas.

I've got a couple of questions, actually.

Firstly, I guess the Maersk Oil deal from last year looks increasingly attractive.

So I was just wondering whether you could give us any sort of updates in terms of the contribution to the quarter and, in particular, sort of what synergies you've been able to extract after that deal.

And secondly, I think Yamal volumes have gone extremely well.

I was wondering how much possibilities there are to de-bottleneck further there.

Okay.

Let's start with Yamal.

The good news is that Train 2 first drop of LNG happened, I think, yesterday or 2 days ago.

I can't remember exactly.

But very recently.

So Train 2 is starting right at the moment.

The Maersk contribution.

You know that we revised up our synergies with Maersk and we will do more than $500 million.

The deal was closed beginning of March.

Obviously, the counter-cyclical timing was excellent.

The cash flow from this quarter with an excellent cash margin of about $30 per BOE at $6 per barrel; that is the margin provided by Maersk barrels.

On top of that we expect Johan Sverdrup and Coulian to start up in 2019.

The integration is progressing well.

There were some cost to provide for this integration in this quarter books of about $100 million.

And this is why we are extremely confident and very happy of this acquisition.

And the same, I have to say, that A.P. Moller should be very happy with the TOTAL share price going up also on their side.

So it's basically a win-win deal that we have made.

We will now take our next question from Thomas Adolff from Credit Suisse.

Two questions from me.

Firstly, going back to the --

Okay.

It appears the participant may have stepped away.

We will now take our next question from Christopher Kuplent from Bank of America.

I just would like to focus on production, Patrick, and whether you could give us a little more color around what made you upgrade guidance now.

Which projects have come through faster?

What have you de-risked ahead of expectations?

And perhaps talk us through also your production expectations beyond this year.

As we all know, you've got this 2022 CAGR outlook that was originally, I believe, established with South Pars in mind.

Whether what you are seeing right now will easily already compensate for the Iranian volumes that you originally expected or whether you've got other external options in mind from what has happened since over the last two months.

Clearly, we are doing well on production.

And the same with cash flow.

And the growth this year is very impressive and it will be the same basically next year.

I don't know exactly the figures, but the production growth will be strong for some time from now.

For the first 6 months our production is up by 9%, if I will remember.

And we believe that we can keep this rate with coming startups such as -- and both startups are imminent -- Kaombo, Ichthys, Tempa Rossa will start up -- it's a matter of day, maybe a week, but not so much.

So you will see those startups being very imminent.

That we will continue and grow the production this year and 7% -- sorry, the production growth was 7%.

7% is a very high figure already.

Don't ask us to make more than that.

We want to create good cash flows and to sanction accretive project and we are doing so.

The new wave of sanction will be Johan Sverdrup, Ikike, Mero 2, the new name of Libra, plus some short cycle in Finland, the North Sea, in Qatar that we had previously kept on hold.

And that's basically what I can say.

The loss of the volumes from Iran was late in the period and it doesn't change the guidance.

And that's it, basically.

Keep in mind that the Yamal ramp-up is fast.

We will now take our next question from Thomas Adolff from Credit Suisse.

Can you hear me now?

Okay, I'll try again.

Two questions from me.

Just going back to working capital.

One of your competitors earlier on said trading is profitable and it requires working capital therefore it is tough to manage working capital.

So I wondered how important trading is to the bottom line for TOTAL since you've done a very good managing the working capital not just this quarter, but in general.

The second question is on LNG.

Not too long ago you were fairly small.

Now you're quite big following the completion of ENGIE and you have a very young portfolio and a deep hopper to pick from.

So I wondered in terms of longer-term ambition, maybe to 2030 since you also have a positive view on the LNG market, how should we think about the size of TOTAL in the mid-2020s, late 2020s, from 40 million today?

Can you be 60?

Could you be 70?

What is the internal discussion around that?

Well, I don't know who you refer by when you said that a competitor of us was having difficulty with his working cap because of his trading.

But we are managing trading for both result and financial exposure.

So we do manage working capital of the trading itself also.

It's part of the whole company working capital exercise.

And we are able to control our working cap in trading at a quite low level.

And the trading is providing good results.

You know that we do not provide figures on it, but our trading is providing good result to the bottom line.

It's less volatile than what you can see from our competitors.

I do recognize that.

But all in all, it's a very good contribution to the bottom line from trading with control of their working capital.

LNG in 2020.

That's a big question.

I think this will be one of the topics we will cope with in our September presentation.

Just remind a few asset we have in our portfolio, ENGIE LNG portfolio, notably Cameron LNG, the Arctic 2 LNG project.

We have the PNG in Papua, New Guinea.

We have the 7 Train of Nigeria LNG.

Then we have Tellurian.

So we have a lot of low-cost projects that we could develop, which can provide value and result because we are not only managing the company for value but also for results.

We will now take our next question from Bertrand Hodee from Kepler Cheuvreux.

Two questions if I may.

The first one, in Angola, we've been waiting for some time for Zinia 2 to be sanctioned.

There's been a lot of restructuring at Sonangol, some fiscal terms being agreed.

Is there more project to be sanctioned in terms of tieback especially on Angolan Block 17?

And what kind of timing can we expect for those tieback?

And the second question relates to Egina.

I think this is one of the few projects coming on stream this year that we did not talk during this conference call.

So can you give us an update on when do you expect Egina to come on stream?

Many things in Angola.

I have to say that Angola is a well-run country at the moment.

And it is -- we are very happy to work in this country and to share profit with the state and us.

As you said, we have been able to cut the cost of Zinia 2 by more than half and we sanctioned it finally.

There are other projects in the pipeline.

I don't know exactly when we will be able to sanction them, but then you have CLOV 2, Dalia 3. In Nigeria you have Akpo, [Tewei].So in this Gulf of Guinea region, there are (inaudible) of five project, I would say, that could be launched in the forthcoming years.

On Egina, we own 24%.

We are the operator.

The first oil is expected by December this year.

The overall project is above 90% and the revised project cost is 9% below the initial budget due to CapEx efficiencies and excellent drilling performance.

The PSO will arrive in Nigeria in January and the drilling campaign is progressing right off of schedule.

We will now take our next question from Lydia Rainforth from Barclays.

I just have one question, actually.

And that was around the cost savings (inaudible), the idea that you'll be ahead of the target this year.

Can you just walk through where that progress is coming from and sort of how much -- where within that process you think you are?

Yes.

We have several initiatives that's drawing -- that are drawing down our costs.

You remember that we create a central management and operations branch, which name is TOTAL Global Services.

And this initiative where we centralize cost, purchasing, accounting and so on is providing some result.

Second, it is digital.

It's difficult to quantify, but obviously it's providing some result including now.

The good example is a smart home, for instance, that we are able to implement.

And of course, we have our initial cost-cutting program that we implement week after week, month after month, and that is driving down cost.

But I'd like to re-emphasize also that the TOTAL Global Service branch is now quite effective and efficient.

We will now take our next question from Jean-Luc Romain from CM-CIC Market Solutions.

Could you give us more color on the value you would assign to your acquisition of the two power plants you announced today?

Would it compare to the value you assigned to the power plants of Direct Energie?

Yes.

Basically, you can buy on the market today -- and I will not give you the figure, which is confidential -- but basically you buy today CCGT at less than ask price of the new build -- of a new build CCGT.

And this purchasing of two power plants is to complement Direct Energie so that we could produce roughly 1/3 of the electricity we sell from our gas power plants.

We will now take our next question from Rob West from Redburn.

Two from me.

The first one is on FX.

There is a debate opening up about how much the strengthening dollar has weakened downstream results in global businesses.

I was wondering if you could comment on that.

How much was the dollar headwind for you in your downstream business over the course of the quarter?

The second question is on Yamal.

Have you received any cash dividends back from the Yamal LNG venture?

And if not, when do you expect to receive them?

On Yamal, I have not received any dividends.

I should be aware of that if we have received one, but we haven't.

When we will receive it, you have to wait by 2020, I think, after the first repayment of the debt.

That's something maybe by 2019 because we have an early production.

The FX on downstream, I don't know exactly how much was the impact on downstream result, but I can give you another metric.

The FX, the stronger dollar this quarter has increased our net debt by $1.3 billion this quarter.

And I remind you our sensitivity so that you can play with the numbers.

And the sensitivity works perfectly.

$0.10 per dollar is $100 million of run and much less -- run for (inaudible) income and much less on cash.

We will now take our next question from Lucas Herrmann from Deutsche Bank.

A couple, if I might.

First one, just going back to LNG, and again you may well want to refer me to September.

But I just wondered how much more risk you'd be happy taking into portfolio given the length that exists within the ENGIE portfolio, i.e.

much of it was there for trading.

So when I think about other projects that you might get involved in, the Arctic LNGs of this world, the extent to which you, TOTAL, are willing to contract.

And secondly, just going back to refining, you mentioned that the issues at Antwerp and Gonfreville are resolved.

How might we expect those to help performance through the third quarter assuming other things hold us as well?

Okay.

LNG first.

It is true that now, having integrated in our portfolio the ENGIE productions, we are a little bit long.

And we are working to reduce these slants and we will manage the portfolio more actively, actually, than it was done before.

There will be more reloading.

Something which is helpful because the market is like this today is that when you reroute LNG tanker from Europe to Asia, there is a gain between $3 and $4 per million Btu at the moment.

And this is very helpful to manage this situation.

Antwerp, Anvers in French, it should improve.

The big maintenance is behind us --

No sense of how much you've begun?

Sorry?

Sorry, Patrick.

No sense of how much you've gone through -- how much you've ceded in terms of opportunity through the period that the facilities were offline?

It would be very helpful to have Antwerp and Normandy working perfectly.

And on top of that, on the refinery side, we are well positioned for the new regulation on the fuel oil for tankers.

And the project we have make $150 million a year more.

We have no further questions on the telephone.

Thank you very much.

And don't leave your office today.

We look forward to seeing you in September in New York for the investor day.

So book your seat.

And there will be a very funny dinner at the end of the meetings.

The second quarter and first half results shows that we are gaining momentum and taking advantage of the stronger environment to go generate $5.1 billion net cash flow so far this year.

The production growth is very impressive.

The organic pre-dividend breakeven below $25 per barrel is impressive also.

We have increased the dividend.

We are buying back shares as we committed to do it.

And that's it.

Thank you for joining us and enjoy your summer holidays.

That will conclude today's conference call.

Thank you for your participation, ladies and gentlemen.

You may now disconnect.