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Off The Record: A Top Analyst highlights the TOTAL's management team Full article published: 04/02/2002     Money Managers, Analysts, Buysiders and Executives


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Total Fina Elf S.A. (NYSE:TOT);

Three analysts and top management from three sector firms examine the integrated oil producers sector in this special 37-page Integrated Oil Producers issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info518.htm

“I think the management at TOTAL has done a terrific job recently,” offers a top analyst. “Thierry Desmarest, CEO, has been doing a remarkable job. It basically comes down to TOTAL’s production growth. Desmarest and his team I think have planned quite well to yield tremendous BOE production growth for TOTAL over the next few years. 10% growth is slated for 2002, and the average reserve replacement rate from 1999 to 2001 was 184% at an average cost of 3.4 per BOE. TOTAL’s target is 10% production growth BOE in 2002 and 5% longer term. That took a tremendous amount of planning, planning that has been in the works since the late 1980s. It really reflects consistency of strategy and strict financial discipline that Desmarest has instilled in TOTAL. Their ROCE is around 14%, 15%, and is slated to increase to 16.5% by 2005 as a result of TOTAL’s ongoing programs to enhance their underlying profitability.

“While many companies struggled in this last quarter (again, it was a downturn, so that’s a good time to pick your winners and the fourth quarter is always a good time), TOTAL’s exploration and production fell 44%, their refining and marketing dropped 43%, but their chemicals were only down 11%. A lot of the integrateds had very poor chemical results in the fourth quarter. TOTAL’s margins held up pretty well. Astoundingly, it’s because they had operations in Europe and in the US. Those were not necessarily good markets, but they have a focus on polypropylene and styrene, and those markets did seem to hold up a little bit better. So, again, that speaks well for TOTAL, their operations and their management. Desmarest has diversified TOTAL enough so that they were able to weather the downturn successfully but were not stretched too thin. Also, TOTAL was in the right markets at the right time. It is a testament to Desmarest’s leadership.”

This special issue includes:

1) Integrated Oil Producers - In an in-depth (13,700 words) Analyst Roundtable, Fadel Gheit, Senior Energy Analyst at Fahnestock & Company, Inc., Stanley Harbison, Senior Vice President at Zurich Scudder Investments Inc. and Michael C. Young, Managing Director at Gerard Klauer Mattison & Company, Inc., examine the outlook for the sector including dividend growth, pricing outlook and share specific stock recommendations.

2) TWST confidential Off-The-Record survey of management performance of eight sector firms asked market insiders about the ability of management teams to create shareholder value.

3) CEO interviews (average 2,500 words). Top management of three sector firms examine the outlook for their firm and the sector.


Tickers included in this excerpt: TOT

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This interview is a small excerpt from a comprehensive management survey published in The Wall Street Transcript on 04/01/02. For more information call (212) 952 7400. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.

Copyright 2002, Wall Street Transcript Corp.

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