TotalEnergies SE (TTE) Q1 2018 Earnings Report, Transcript and Summary

Good day, and welcome to Total's First Quarter 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Patrick Pouyanné, CEO. Please go ahead. Patrick Pouyanné - Total SA: Thank you, and good morning or good afternoon, everybody, wherever you are. I am with Patrick de la Chevardière, our CFO. I'm very pleased to join the call today together with him. We have been quite busy recently since we met most of you last February and so we thought it was worth a short update by the CEO himself. But as it is a tradition, Patrick will first review the first quarter results and then I will comment on the recent strategic activity and then we'll go to the Q& A. Before to leave the floor to Patrick, just and it's important because I would like to make a comment on the shareholder returns policy that we have presented in February. But we have decided, of course, to not only to propose but to implement and we have done what we said, which means that first, when we proposed this policy, we announced that we'd increase the dividend by 10% over the next three years and yesterday's Board of Directors consistently has raised – decided to raise the first 2018 interim dividend to €0.64 per share, an increase of 3.2% exactly on the path to the 10% over three years. So it's an implementation of this first comment (01:37). The second point is that we announced as well that we'll buy back all the scrip shares that we have been – which have been issued in order to avoid any dilution. So we've done it between February and April. We bought back 7 million shares, which we've issued in January for the scrip dividend payment and to be clear, we have just issued another 50 million scrip shares, which we'll bought back in the coming quarter. And on the top of it, we also announced that we will implement a buyback plan to buy up to $5 billion in – with the idea which was the idea to share part of the oil price upside with our shareholders, and this plan has begun. We bought back an additional 5 million shares for $300 million in the last two months, between February and March. And to be clear, more than $70 per barrel. Of course, we are very pleased with recent share price evolution – increase, I would say. But we'll continue to buy back shares as it was announced in order to continue to share this oil prices upside with all shareholders. So after I make these remarks, which are obviously very important and because we put into action our commitments to our shareholders, I leave the floor to Patrick, our CFO, to review the first quarter results. Patrick de la Chevardière - Total SA: Thank you, Patrick. Honestly, we are off to a good start in 2018, and we are on track to achieve our objective. First quarter performance is solid. Adjusted net income was $2.9 billion or $1.09 per share and debt-adjusted cash flow was $5.7 billion and our organic free cash flow was $2.8 billion. Looking at the segment, first quarter 2018 adjusted net operating income for E&P was $2.2 billion, up 58% compared a year ago, and 21% versus the previous quarter. Compared to first quarter last year, Brent increased by 24%, and our average realized hydrocarbon price increased by 25%. Production grew to 2.7 million boe per day in the first quarter, an increase of 5% from a year ago and 3% from the previous quarter, despite the end of the Mahakam license in Indonesia. There is a record level of quarterly production. The previous high was 2.66 million barrel per day in 2003. We benefited from major ramp-ups including Moho Nord, Kashagan, Yamal LNG where the first of three trains is producing 6.4 million ton a year, well above the nameplate capacity of 5.5 million ton a year. In Qatar, we took over operations on the giant Al-Shaheen field last year in July. So this made a strong contribution. First quarter startups include Fort Hills in Canada and Timimoun in Algeria. The Petrobras alliance and Maersk Oil acquisition made only partial contribution in the first quarter. So we are on track to do better than our target of 6% growth for the whole year. Before turning to cash flow, we note that the differential between Brent and our average realized liquid price increased to $6.5 per barrel in the first quarter of 2018 from $4.5 a barrel a year ago and $3.7 a barrel in the previous quarter. This is mainly the impact of growing Canadian volumes at a time when exports are pipeline-bound and netbacks are very weak. This is an exceptional situation not linked to higher oil prices. May I remind you that in terms of our oil price sensitivities, the calculation are made using constant differential, so, in fact, it should be used with the realized liquid prices. E&P cash flow before working capital changes was $4.3 billion in the first quarter, an increase of 28% from the same quarter last year and in line with the previous quarter. The ramp-up in cash flow will accelerate into the second quarter, mainly with a full contribution from Maersk and then gain momentum with the cash-accretive startups. Recall that in February, we told you that for a full year on plateau Kaombo, Ichthys and Egina would add $2.5 billion of cash flow, and Maersk plus Petrobras alliance would add another $2 billion, all that based on a $60 Brent. So the way forward is clear. First, organic free cash flow for E&P was $2.2 billion. E&P organic CapEx was $2.1 billion, and I will remind you that the first quarter is typically a bit light. For the Gas, Renewables & Power segment, adjusted net operating income in the first quarter was $115 million compared to $61 million a year ago and $232 million in the previous quarter, thanks to better result from the solar business. Moving to the Downstream then, Refining & Chemicals contributed $720 million of adjusted net operating income in the first quarter compared to $1 billion a year ago and $886 million in the previous quarter. Refining margin was volatile, averaging $26 per ton in the first quarter, a decrease of 34% compared to the same quarter last year and 28% versus the previous quarter. Seasonal weakness was more pronounce this year than last and essentially it has been the inverse impact of the ramp up in crude prices. Petrochemical margins have remained generally stable at a good level from the past year. So we consider Refining & Chemicals results are short by about $50 million to $100 million in the quarter, mainly due to operational difficulties at Antwerp and (09:11) and the start of the turnaround season. Note that we used the first quarter turnaround at SATORP to increase capacity to 440,000 barrels per day. Refining & Chemicals generated cash flow before working cap changes of $0.9 billion in the first quarter, compared to $1 billion a year ago and $1.1 billion in the previous quarter. Marketing & Services generated adjusted net operating income of $367 million in the first quarter compared to $301 million last year and $436 million in the previous quarter. Marketing is continuing to grow its retail and lubricant businesses. Global refined product sales are up 4% year-on-year. This is comprised of a 17% increase in Africa, Asia that includes the acquisition of GAPCO last year and a 4% decrease in Europe that reflects the sale of TotalErg in Italy. Marketing & Services is adding $100 million of cash flow per year by expanding in high return, high growth markets. The combined Downstream segment, Refining & Chemicals plus Marketing & Services, generated cash flow before working cap changes of $1.4 billion in the first quarter compared to $1.5 billion a year ago and $1.8 billion in the previous quarter. There is some seasonality in this result including recurring impact of about $100 million in the first quarter for the full year property taxes as per IFRIC 21 rule and the timing of dividends from equity affiliates. Finally, looking at the corporate numbers, the group's effective tax rate increased to 40% from 31% a year ago and 32% in the previous quarter. The rate for E&P increased to 48% in the first quarter as a result of higher oil and gas prices, and the share of E&P within the group results was much larger as well. The Downstream tax rate is relatively stable at around 25%, 30%. The group generated debt-adjusted cash flow of $5.7 billion in the first quarter. On an organic basis, excluding asset sales and acquisition, free cash flow was $2.8 billion despite the seasonal weakness in Downstream. So we are on track with the guidance we provide in February and we are confident that cash flow generation will increase over the year. Gearing, net debt to total capital increased to 15.1% at the end of March from 12% yearend 2017. This takes into account closing the acquisition, including the Maersk debt. There was also the working capital impact on cash that has affected the net debt at the end of the quarter. This will be corrected over the coming quarter. Nonetheless, the balance sheet is strong and we will maintain gearing below 20%. To summarize, we have a good start to the year. We are performing in line with our plans. The balance sheet is strong and the environment is favorable. Brent has been above $60 per barrel since early November or nearly six consecutive months. And we have been above $70 per barrel for most of April. Although product demand is strong, European refining margin has been volatile in an environment of rapidly rising oil prices. Petrochem margin have remained fairly stable at high level for more than a year supported by strong underlying demand growth. At the current oil price level, obviously, we have more cash flow than anticipated and we can execute comfortably our return to shareholder policy and that's what we are doing. And now, I hand back to P1 now. Patrick Pouyanné - Total SA: Okay. Thank you, Patrick, for these good sets of results and a record production and as well as, you said, the implementation of our return to shareholder policy. So just a few comments now about, I would say, the implementation of the strategic framework we described as well in February and we have made some various moves in those directions. According to what we said there, again, we told you that we wanted to take advantage of favorable CapEx (14:43) to invest consistently (14:41) and acquire some assets to create value. So what we have executed during this last quarter was, in fact, deals which were prepared in the previous year, I mean, where the price of the barrel was lower. And we told you that we will focus on where we are good, which is to play to our strengths, in particular in some (15:07) Middle East, the North Sea, Africa, deep offshore, LNG and in Downstream to focus on petrochemicals, retail and lubricants and that if there's a future, we will expand and we are expanding along the integrated gas and power value chain. So the activity has been quite intense and I would like to review with you what we've done and to explain you a few of these strategic moves. First, I would begin may be by North Sea where we closed the Maersk Oil acquisition in March, slightly went off schedule and so now we are the second largest producer in the North Sea. At the same time, by the way, we also closed the sale of Martin Linge. We have rearranged our portfolio with the objective to lower the breakeven of our operations in the North Sea. So it's done. It's been done. The integration is going very smoothly since mid-March. And by the way, I can only make a remark is what none of us when we negotiated the deal in spring 2016 were thinking that the price of the barrel would be at $70 today. So there is obviously some upside, which is coming very quickly in the picture. I would also say that we can speak a little more about synergies. And we plan to have $400 million of synergies, out of which $200 million were coming from OpEx cost. We reevaluate that today to $300 million from the cost of a global synergy package from Maersk, which would grow at $500 million plus. So this is for North Sea. Then the second region where we have been active is Middle East and North Africa. We have two recent moves, one in Abu Dhabi, the other in Libya. Coming back from Abu Dhabi, we have obtained two new 40-year offshore concessions, 20% of the Umm Shaif and Nasr concession and 5% of the Lower Zakum concession. I would say it's an excess to 1.5 billion barrel of reserves and production of 80,000-90,000 barrel per day. So entry cost of $100 per barrel with fiscal terms, which have been significantly improved compared to the old ADNOC concession. I would like also to make another comment. You probably noticed that we have a quite unusual high stake, 20%, on Umm Shaif and Nasr concession. Generally, in Abu Dhabi, it's more in the 10% to 15% range. We are very focused on that concession for two reasons. The first one is that it's a concession where there's a potential oil increase from 320,000 barrel per day to 450,000 barrel per day at 100% share. And more important than that, there is a very large gas gap, 5 Tcf of gap to be developed. And there is a change of policy in Abu Dhabi, a country we know very well, where Abu Dhabi has decided to really monetize its domestic gas resource. And so part of the focus on Umm Shaif because there there is a big upside and the fiscal terms on gas are very – it is a necessitation, be designed to be an incentive to produce this domestic gas. So there is an upside on Umm Shaif on gas, and this is why we focused to share there. We have taken a smaller share on Lower Zakum concession, 5%, because it's a more traditional oil concession, I would say, but part of our loyalty to Abu Dhabi was we were offered to be on both concessions, so 5% on one side and 20% on Umm Shaif. On Libya, we bought 16% in the Waha concession from Marathon. We closed the deal on March 31. It represents 500 million barrels of reserve, 50,000 barrel per day, a deal around again around $1 per barrel like in Abu Dhabi. The deal is closed, of course. You have seen some information. The situation in Libya is a little tricky from a political point of view. Let me be very clear on what we've done. Because we are polite, and with Marathon, we have a long relationship with Libya. We advised Libyan authorities far in advance that the deal has been settled between Marathon and Total, that we are intending to close it by the end of March. Legally, from a cyclical point of view, neither in the Libyan law nor in this oil concession agreement, there is a request for formal approval. So we advised them that there was a target for us, end of March. We wrote them again before. There was no objection. And so we decided to close and it is done. The shares are today of Marathon in Libya are in Total and because again it's a share there. We, of course, have a permanent open dialogue with the Libyan authorities and we will give them all the comfort they have legitimately requiring to reassure them that willingness would develop the oil field in the national interest of Libya. So this is moving, but again I would say when we close the deal, I said that we are not naïve about the tricky political solution there. So no surprise, but I think we don't give too much about some rumors like always. It's not really there. The situation is clear and we have a permanent dialogue with them. Then, the other segment where we have also – a core area where we have progress is deep offshore. We have in Brazil and the Gulf of Mexico, in the U.S. Gulf of Mexico. In Brazil, we have closed the deal that was announced in January. I would also say just to comment but the deal was closed and negotiated early 2017, where again the price was under $50 so there is an upside coming very quickly because we produced already there on Lapa, on Iara and on Libra. So we have around 80,000 – 70,000, 80,000 barrels per oil per day producing there in 100% so we have a share of it. So it get some revenues, and revenue are unexpected. I would also comment that when I see the size of the bids which have been done in the recent exploration licensing rounds, exploration rounds, it puts a value of all this into I think a good perspective. On the Gulf of Mexico in the U.S., we have made beyond the giant Ballymore discovery, which was announced in January with Chevron. You have probably noticed, but we have acquired some Cobalt assets out of a bankruptcy procedure, which of course have been quite efficient from a cost point of view. We have increased our interest in North Platte from 40% to 60% and we have there becoming operator of this Wilcox discovery, 350 million, 400 million barrels of reserves there potential with some exploration license around which we own as well. So we'll partner with Statoil. We are pleased with this partnership to develop technology in order to make some profitable development of this Wilcox formation. And we have also increased our interest in the Anchor discovery done by Chevron and is very logical because we have, together with Chevron, an exploration program of many wells around Anchor. So I think North 32.5% was another move. All these moves have been done again at quite efficient cost of access because of this bankruptcy procedure. I would also praise my CFO because he made a bold move to acquire some second lien bonds at a discount price last spring and we will make there $60 million profit, which will diminish the cost of access to these assets. So we are innovative in Total and active in many ways when we want to have access to low-cost resources. Thank you, P2. And then, having said that, I will move to petrochemicals, which was another active area. You'll notice that since we met in February, we finalized in the U.S. again our joint venture with NOVA and Borealis, both on the cracker and on the polymer side. So it's a big expansion. We will together by putting in place this joint venture will be number three in the polythene business among in the U.S. among the top three sellers of polythene and polymers, which is quite a good position in terms of marketing and as well we have a very efficient cracker scheme and expansion on the polymer side. We have also announced recently a first step towards large expansion on our SATORP refinery together with Saudi Aramco, a giant petrochemical expansion, $5 billion for the scheme of crackers and polymers plus some additional units in which we will not participate the value part. It would be a world-class 1.5 million ton cracker based on advantage feedstock, first refinery of gas because there is a strong integration there, but also access to some ethane and LPGs. So it's a start of a new adventure with our friends of Saudi Aramco and it's fitting very well with the idea that we focus on CapEx in refining and chemicals on the integrated platforms where we spend a lot of money to put all the logistics in place with the refinery and now we want to capitalize on that together. And last, but not least, the fifth segment of focus on which we have also made some strategic move is integrated gas and power. The Engie deal was announced in November, give you some news. We have obtained all the antitrust authorization from China, Europe, U.S. and over the world. The social process is also over and now we have some approvals to obtain, some on commercial agreements on people around the world, but it's progressing well and we target as announced in November to close the deal by first quarter mid of the year, this year in coming three months I think. And then on the top of it, we have announced last week another move in the field of integration gas to power, which is the acquisition of the company called Direct Energie, which is a company, which is in the field of gas and power retail marketing but also a power producer. This company – so it's an opportunistic move which should not surprise you. We announced you, but we want to build a business in the low carbon business going downstream the chain of gas, gas to power. But we announced in October that we want to establish ourselves as in a position in the French gas and power retail market with a brand called Total Spring. In fact, the things have accelerated because these enhancements created another opportunity, the acquisition of Direct Energie. After we announced our entry in the French gas and power retail markets in October, we've seen that the share of Direct Energie has decreased and the main shareholders have decided that there was maybe right time for them to sell. So we have somewhere shaken the market when we entered and we are gathering the fruit much quicker than expected. So this fit is excellent for us because it gave us immediately sizable market share. We are reaching 7% of market share and you know in this retail business like we know well in our Marketing & Services business, market shares is of essence because you amortize all your advertising, your fixed cost on the larger base of customers and so it's a virtual cycle. The intent is to continue to grow on this market. Direct Energie was growing by 500,000 new customers per year in the last two years. We are also on all side, we are beginning to have 2,000 new customers per day so if you combine all of that, the ambition is to reach 6 million to 7 million customers in France, more or less 15% of the market share. This level, which will become a quite interesting business, but Direct Energie gives us again access to midsize and will accelerate our development. In the portfolio of Direct Energie, there were all the interesting assets, in particular they are some gas-fired power plants that they acquired at quite a low cost in 2015, 2016. So we will have 1.2 gigawatts of power generation there, which will come at the top by the way of the power generation gas-fired power plants we have in the Total portfolio. This is interesting because it's part of the integration between when you make a retail business you don't go only on trading to acquire power, but it's also good to have some physical assets that you produce yourself with a good cost of access, which would be the case with these assets and they have also renewable business, 500 megawatts which could grow to 2 gigawatts so this fitting well as well with our strategy, power strategy. So at the end, what we want to build in line with what we explained you and I think for some of you will follow us very precisely, remember, two years ago, there was a puzzle to explain the strategy so I think the pieces of the puzzles are put in place now, one after one so we'll show you a bit scheme and next September the strategy meeting, you will see how the puzzle is going together and this is quite logical. Now we are expanding a lot on the gas business. We have become number two in the LNG trade. There is a logic to sell this gas to customers, or gas to power integration and this go downstream to retail marketing including having in our portfolio some capacity of power production like gas or renewables. We'll be clear. We don't have any ambition to become a utility. We just want – we follow the value chain to get out of this gas value chains maximum value like we have done in the oil business with some success during years and years. This is what we target and obviously, we're not at the full capacity to produce the power we distribute because we'll buy and trade like we are doing already by the way some of the power that we will distribute to our customers. This business, Direct Energie, we evaluate that we – the objective is to reach cash flow from operations around $300 million, so around $350 million in five years, which is a target we have. There are some synergies by the way in this business because obviously by combining both companies means we are small, we will focus on one brand and not two brands, one brand in France, one brand in Belgium so it will save some money. But there was also two IT systems, (30:27) is a digital low-cost business and we will keep one digital platform, not two. We evaluate that to €35 million, to €40 million per year. So this is the idea, I think by doing these moves again what we want to do is enlarge the spectrum of activity of Total and to develop integration the gas evaluation and gas to power and to have access at the end of the day, to some areas, which are growing as a grow their potential growth in this market. And I think that for shareholders, it's a way also to give them access beyond traditional oil and gas to businesses, which offer higher growth for the future. To sum up, I would like also because I described many deals and many activities, some of you could be worried about the financial discipline. But I can tell you and you can be comfortable with P1 and P2. You've got two managers, there are very – keep in mind the discipline. We announced you a clear framework of allocation of capital: first, $15 billion to $17 billion investment; second, increase the dividend by 10%; third, keeping the gearing under 20%; and fourth, share buyback $5 billion to share the upside price. I confirmed today that will be in the range of $15 billion, $17 billion for the next three years and that for AGM, if I say you $15 billion, you will think it is too low, it's too conservative. I have seen some comments this morning that Total's management is conservative. So I will not be conservative. It will be $16 billion, probably $16 billion plus. But we will stay in the range of capital investments which was told you in February and I think it's important to tell you, by the way, we have sold already $2.2 billion of assets since the beginning. It's not just the acquired. We also sold you (32:26). If you remember, I told you that $2 billion an acquisition could be $3 billion minus $1 billion, $5 billion minus $3 billion, $7 billion minus $5 billion. But we'll be active, of course, on the sale of assets. And I would make one comment that, clearly, in this type of environment, $70, it's easier and could be even good to sell some upstream assets today. We are not so active in the last two years because we didn't want to lose value, but at this level of price, there are – we can be again countercyclical in the other way, which is to sell when the price are better. So this is part of our commitment. It's part, by the way, also for me of the restructuration of the portfolio with the permanent objective which is to lower the breakeven of a portfolio, and I think it's the last strategic comment I would like to do. Last one, don't believe all the rumors of bankers and Total is not interested by acquiring neither Santos nor Oil Search. We have enough interest in PNG with 38% oil and gas, solar energy with 27.5%. So I know people think – some people are giving rumors, but don't believe all of them. We are in line and we will stay in line with the strategy we have described to you, to focus on our core areas. With that being said, I think it's time to go to the Q&A.

Our first question comes from Jon Rigby of UBS.

Thank you. Yes, two questions. Patrick, thank you for running through the strategic initiatives for the first quarter. They seem to have come very thick and fast, it's difficult to keep up with them all. But just to reference your last point about the sort of $2 billion or so of net investment and the more attractive disposal market potentially for E&P, does that mean that we should expect more activity on the sell side across the balance of this year, or when you think about that figure, do you expect it to be sort of an average over the course of a few years in terms of your disposals? The second question I guess is for P2 is, this working capital build has been a – has emerged as a bit of a feature in the last few first quarters. I just wanted to come back to it and ask, is it a function of what you're doing in the fourth quarter, or a function of something unusual in the first quarter? And what of each of those is more representative of the working capital that you need to run the business all things equal? Thanks. Patrick Pouyanné - Total SA: Okay, I'll take the first question. Again, the financial framework we gave you, $15 billion, $17 billion of investments organic plus net acquisition. So $2 billion, take it as it is – it's for the next three years, take it as an average of three years, but clearly, yes, we will be active on the sell side. I mean, we have some assets. It's not like we've done in the previous three years, a $10 billion program. It's done step by step but we have some assets which are being marketed today without too much noise neither rumors. So we are active. And of course, the question where I'm prudent and I answer you by the average, but they could be -when you take a year, 360 days, you could have sometimes last year but, for example, we closed the Petrobras deal in January, on January 10 and not on December 20, 25, so sometimes you could move the end of the year, go beyond. But again, this is globally, you can keep our commitments, the $15 billion, $17 billion of net investments as being the right point to model the future spending of Total in terms of capital investments. Patrick? Patrick de la Chevardière - Total SA: Okay, Jon, for this very simple question about working cap. Our working cap increased by $3 billion this quarter. And honestly, I'm not very happy with that, even if there is some seasonality in our working cap. The $3 billion can be explained by $2 billion of seasonality. Some people say that we manage it poorly. I don't know if this is correct. But there is obviously some seasonality and if you check in the past year, we face the same difficulty. So $2 billion coming from that and $1 billion coming from the price effect on our inventories and deliverable. Another small comment is that stock build (37:45) for maintenance in Europe is clearly seasonal. And that's part of the explanation. Volatility is to be expected, as you know. For working capital, I can tell you that we will, and we will, tackle this issue and we're committed to improve in next quarter what we are used to do on working cap. Patrick Pouyanné - Total SA: So emulating (38:02) two out of the three if the price remain at $70 plus...

Can I just follow up on your first answer on the portfolio? Is it – on the disposal side, is what's evident from some of the acquisitions – they're not just acquisitions of assets, you're in the process of sort of reshaping the portfolio, but will you sort of apply the same logic to the sell side as well is that it's not just a disposal of ready assets, you're trying to reshape the portfolio through disposals as well? Patrick Pouyanné - Total SA: The assets that we want to dispose are high-cost asset, it's obvious. I mean, like we've done with Martin Linge I think. So, yes, of course, we are trying to – we will be consistent on the sales towards regarding the strategy and continuing to focus at the end of the day on what is core in the company. And we will select these assets according, so either high breakeven assets or out of the core of the business of the company.

Okay. Thanks very much, guys.

Our next question comes from Michele Della Vigna from Goldman Sachs.

Thank you for taking my question. Patrick, I wanted to ask two questions if possible. The first one is relating to the deals that you have very thoroughly run through. It feels like they mainly come from two areas, either financially distressed companies or national oil companies where we see a much more collaborative environment in the last couple of years. I was wondering if you think there is more to come in the area, in particular in terms of collaboration with national oil companies, if that could become, in the future, a bigger area of reserve replacement for you. The second, still staying with acquisitions, when you compare the financial metrics of a deal like, for instance, Maersk on one side which is clearly immediately accretive to cash flow and still with assets with long longevity, and on the other side, a deal like Direct Energie which is certainly strategically very important, it adds longevity and high quality assets but which is probably dilutive for quite a long time on valuation. How do you think about doing one deal or the other one and how do you compare the key financial metrics in order to choose where to employ your incremental capital? Thank you. Patrick Pouyanné - Total SA: Okay, first the first one. You have a perfect analysis of what we've done. Yes, it's true. The business model of major company like Total because we have a stronger balance sheet, we've got somewhere take benefit of that in order to have access to some assets from companies which were in not so good situation, so either it was some national companies like Petrobras, I would say, or some smaller companies like is the deal with Tullow in Uganda, with Cobalt in the U.S. And basically, there's also deals like Maersk, which was another idea, or Energie (41:23), which were companies which were willing to exit a certain oil and gas, certain business and on which it was easier to negotiate a deal because in fact, we're not – it's not on two earning gas companies negotiating with the same to explain you, but both were winners. In this two deals, we were targeting two different strategies so we have to demonstrate that it was okay and fine for oil and gas business and that we are all moving out of the business. So out of those two, to strike good deals. But so for the Q, can we continue on it? I think one of the DNA of Total and in particular in the Middle East and North Africa region is that we have a very strong relationship with many national companies in Abu Dhabi, Qatar, we have development in Algeria as well. And so we are working on some over the deal of this type in these countries. Of course, I can – I mean, all the concessions of Abu Dhabi are now allocated for 40 years. And also in three years, we have done the job so maybe our success there will be less even if there are some new opportunities coming. They are opening some exploration rounds there in Abu Dhabi. So I think what we have observed because of the volatility of the oil price, many of these national companies have changed also, are more open to the strategy. And so I think there are still some opportunities and one of the, I would say, core strength of Total is the ability of the team to the company to deal with these national companies and we have raised a lot of resource so and low-cost resource. The second question, it's a good question. It's fundamentally up to you. On one side, build on a short-term additional cash flows by going to accretive deals like Maersk Oil, which will generate more cash flows at the lowest to increase our return to shareholders, but also to increase our capital investment or to finance our capital investment program with good deals, but at the same time, in the energy field, we need to prepare the future. And in the future there is that you all know but I think outside of the oil and gas sectors, there are investors who are asking questions where does the segment move? We are all convinced that we'll need a lot of oil and gas in 2040, but it's not so shared by everybody and I think – and by the way, the global multiple of the sector is not so high. By injecting in our corporate profile some activities where you have and it's clear for everybody higher growth potential, I think the message is, yes, this will deliver more cash flow later but we can do it. We can fuel that with more long-term strategy because at the same time, first, we are good and excellent on the short-term results, and I think Patrick again this quarter show you that our results are very solid and consistent, and secondly, because we have done some short-term deal to fuel that cash flow so this is global mechanics and strategic mechanics of the company.

Thank you.

Our next question comes from Oswald Clint from Bernstein.

Thank you very much. I'd like to ask firstly about the production, the upstream volumes kind of hitting that 15-year high. You're looking to grow at 6% this year. I see this morning you're indicating potentially chance to do higher than that. I wonder if you'd venture what that higher number might be. But fundamentally, you talk about it being in the startups coming in better plus integration. So my question is really is this a Maersk phenomena or is it really successful ahead of schedule startups off your very large list of projects? I think you have about 14 or so over 2017, 2018 and if so, maybe half of those have started up already. Does that mean the next half of those through this year into next year should come in ahead of schedule as well? That's my first question. Secondly, just on this topic of kind of some of the deals you've done, I'm specifically interested in Libya and those barrels, the 50,000 barrels coming out of Libya. Perhaps, just remind us of the profitability of those barrels. I do remember them being quite highly taxed in past times, perhaps that's changed. Thank you. Patrick Pouyanné - Total SA: First question, I think on the profile, growth profile, we announced more than the 6% this morning because the 5% performance of first quarter is ahead of what we were thinking. So yes, more than 6%, I read some comments that we are too conservative. As you said, we have many startup coming in front of us, Ichthys, Kaombo, Egina, Tempa Rossa in the coming months. Sometimes, it can derive by one month or two. It could be read by one month or two. January is more one month late rather than one month (46:45). But all that being compensated, that's also true, but the Waha deal was not planned in forecast in February. So it came quicker and we managed to close deal. So globally speaking, I would say that you can take more than 6% as a – but it's already quite a good performance, and I would say that it will be the fourth year in a row that we'll be at 5% plus, 2015, 2016, 2017, 2018, and we have more to come. So I remind you that our guideline to you is 5% as an average until 2022 and all what we have announced there and done and we have all accumulated the resources to be done even if we have also, as I answered to Jon previously, we'll sell some the production because we are not driven by volume. We are driven by value there. But of course, if we want to grow the cash flow, it's also good to have a growth in production. So this is for the production growth. I think the guideline of more than 6% as a good guideline and we'll see what can be delivered and quarter after quarter. Patrick, you want to answer on Libya? Patrick de la Chevardière - Total SA: Yes, barrel in Libya are very profitable actually. And profitability is at $60 per barrel between 15% and 20%. Patrick Pouyanné - Total SA: Basically, I can say that with the cost of access to this barrel was quite attractive because of political situation, maybe it creates some move, by the way, there in Libya probably when they discovered the value of the deal, part of the difficulty. But I would say that when the concession – the terms of the concession did not change. I think that it was there a question of probably Total can accept to take this type of Libyan risk in our portfolio more than Marathon was willing to give them. So this is why we've done the deal, in fact, and it's also part of the geopolitical move, but we can do because of the very large portfolio we can take this type of risk on board and get the rewards that we win. That's part of it.

Super. Thank you. Thank you.

Our next question comes from Theepan Jothilingam from Exane BNP.

Yeah, hi, good afternoon, gentlemen. A couple of questions, please. Firstly, on the synergies that you've mentioned about Maersk Oil and Direct Energie, could you just talk about the timelines on how quickly the synergies can be realized for both transactions? The second question, Patrick, just comes back to GRP strategy and I think you mentioned trying to grow sort of installed capacity on the gas-fired power plants of around 10 gigawatts. So I was just hoping to understand, so the timelines and, again, will that be really done inorganically? And then finally, you mentioned, Ichthys and Kaombo. They are highly cash generative, so I just want to understand where we are in terms of commissioning or delivery of first oil. Thank you. First oil and first LNG. Patrick Pouyanné - Total SA: For the synergies of Maersk Oil, I'm taking the papers. Sorry, I don't know what by heart. I know what the cost synergy should be fully on board by three years to capture them. I'm just taking – I'm trying to find. Yes, it is there. I think this year obviously is not so – you can say that you will have 60%, 70% to further rate by 2019 in our cash flows and 100% by 2020. This year, you have a small share, but not major share. I don't have the figure. This is the first one. On Direct Energie, we need to close the deal, but it will be immediate, in fact, because the decision to keep only one brand will be done before the closing part of the synergy. The fact that we will decide to have only one IT platform will take a little more to implement, one year, but I think this type of synergy, the first €5 million I mentioned to you would be done by the end of 2019, very quickly at the latest. Then the second question about growing 10 gigawatts of quickly, it's a five-year objective. Sometimes you go quicker, but let me be clear, one of the source of the 10 gigawatts, part of it is embedded, in fact, in Direct Energie to 2.5 gigawatts because we have essentially 51:26) to be built. We have a pipeline of wind and solar projects in France. Part of it is the number 2.2 gigawatts is coming from the deal with Total Eren, which is already also engaged last year. We acquired 23% of the company. So you have there 6 gigawatts plus 1.7 gigawatts and then on the top of it, it will come from opportunities we could see there and again, I mean, in particular, the focus for me would be more on the gas-fired power plant, if we can have access, but we have time to do it. The global ID is that if you have 6 million customers, 6 million, 7 million customers, you will require more or less 30 gigawatts. We will not cover all of it because we don't want to be a utility, so two third will come – we will not add some base for our capacity, let's be clear. And so we'll buy to further it and produce the other third, which is a good level of integration if we want to develop profitability in this business. So this is consistent with what we just told you. So don't expect us to rush on buying many capacities so quickly. Patrick de la Chevardière - Total SA: The last question was about Ichthys. Yes, we are following impacts guidance given a few weeks ago and with our own view on site, offshore gas and condensate should start Q2 so in the coming weeks, I would say or months, there is two months left in Q2. And we're expecting first LNG by July something like this. Patrick Pouyanné - Total SA: Let be clear. There is a slight delay but the impacts already explained it on some issues to be fixed on one of the offshore components. And so it's being done. It's a giant project. There are some safety issues to be solved but there's nothing major. It's being done. It's being repaired on the last platform I think and so production will come quickly. By the way, it's better to start this project at $75 per barrel than at $50. We'll make more revenues even for the first condensate. So sometimes you are a little late but you generate more money with it.

Noted. Thank you, Patrick.

Our next question comes from Lydia Rainforth from Barclays Bank.

Thank you and good afternoon. Just one question. Are you seeing any impact in terms of the cost base or any upward pressure there at the moment? And in particular, if you could just talk about the recent Google Cloud and JV in terms of the artificial intelligence item, what you're looking to achieve there? Thank you. Patrick Pouyanné - Total SA: I like your question on artificial intelligence with Google. The idea there is clearly to try to engage not only to make proof of concept but to engage really some development, so it's about geoscience. A team of 15 people of engineers of Total will move from Peru (54:57) to California, within the Google offices and will develop some programs during two, three years. We have a program to see or we could apply artificial intelligence to enhance the efficiency of our geoscience processes. I don't want to disclose everything there because there are some areas of, I would say, core competencies. But it's a commitment and I think it just started. We shifted from few discussions and concept to putting in place a team and we have some good expectations and I'm quite pleased because of the mobile side, they also put a team of more or less equivalent, I think 20, 30 people which will come together with our teams together and which should bring the artificial intelligence competency. That's important. Second point cost base impact deflation, today, I would say we don't see any inflation, I would say. Deflation normal but it's stabilized more or less. The costs have deflated by – it depends on the segment, 30% to 50% sometimes and we continue to benefit from this low-cost base today. I would say in conventional oil and gas, we still have quite not too many projects. And in the rig market is still quiet, in fact. And so when you make tenders, we have good news today compared to our cost base. We are not as you know very involved in the unconventional in the U.S. even if we are in the Barnett Shale producing 600 million (56:15) per day there. I would say there in the Barnett Shale, we have seen some inflation in particular in some frac jobs and there is a lot of activity in the U.S., more activity in the world. So maybe it's one advantage of our portfolio, but we didn't see today any – we are still, I would say, it's a low cost base for the CapEx and OpEx. And this is – by the way, you probably notice but our OpEx this quarter at $5.4 per barrel so still maintaining them. But you also remember that we continue to implement the cost saving program for the company despite $70 per barrel. It's a little more complex to convince our colleagues but we take care. We take care.

Perfect. Thank you very much.

Our next question comes from Christyan Malek from JPMorgan.

Hi. Good afternoon gentlemen. Thank you for taking my questions. Just two if I may. First about the acquisitions, when do you think enough is enough and how should we think about an upper end of CapEx or resource for new oil? You mentioned $16 billion plus over the next few years. Should we think about downtrends potentially moving higher every time or is it really a $17 billion cap to 2020? Secondly, you've done a fantastic job high grading fuels, increasing productivity both organically and inorganically. Could you comment on some of the things you're doing at the operational level that surprise to be upside of production? And on the broader, level Patrick, do you think the industry has more to do to lower project breakevens further outside of the U.S. through technology, Big Data and AI? I can see that you're leading the way on that. So would love to hear your thoughts. Patrick Pouyanné - Total SA: Thank you, Christyan, for your question. So I reiterate my strong commitment as $15 billion, $17 billion for 2018-2020 for the three years that we announced February. Each carry a commitment so you can take it as a guideline. There is no wrong message in anything I told you. My comment on $16 billion plus were just for 2018. I could have rate you 2018, $15 million, $17 million but you make some math and again, we have been active, more active than anticipated, but it's no regret at all, it's because we had opportunities, so we seize them. So keeping the $15 billion, $17 billion for 2019, 2020 are really the right guidelines for what we want to invest. And we have the capacity, again, to make organic investments and inorganic investments which we think will fit with our strategy. Having said that, if the price remain at $70, $75, I suspect the countercyclical strategy will have to make a pause somewhere. So the answer is in my strategy. The strategy is to acquire countercyclically or to sell on the other side, so this why I can confirm it to you. The second question is on production side, what organic improvement can be done. I'm not sure to – I think we have done a lot already in order to – but what you've probably noticed is that when you look to the decline rate overall, base production, when you – and I think it's commented every quarter, quarter after quarter in our press release, the average decline rate of the total portfolio when you eliminate the project startup is more or less in the range of 2% to 3%, 2.5% I think this quarter again, which is quite low. And why is it so low? It's because I think we – one of the things which has been done during the last period of three years, and which is implemented today in our teams, is that we refocus everybody, because each dollar was very important to lower the breakeven, on some KPIs like availability, utilization rates, including not only in downstream, but in upstream. And so the upstream division is working on it, has shared some good practices. And so this momentum of trying to permanently increase this volatility factor is really embedded today in the company. So it's part of it. The second thing I would tell you is that – you probably notice that when we lowered our organic CapEx, we have a bunch of (01:01:03) which are achievable, what I call my short-term CapEx. And obviously, at $70, $75 per barrel, which are not huge amount of CapEx, but we can activate part of these resources and short-term spendings which will help to manage as well the decline of our production base. So I think there are there sources (01:01:24). Can we do better? I think I'm – you know probably that I'm strongly believe we can always do better. I take the LNG business, the LNG business, people were spending $1,000, $1,000 per ton. We launched, and myself was quite vocal, we can do it at $500 per ton. Maybe we'll not reach $500 per ton, but all the project I'm looking today, like for example the PNG projects, we are speaking today around $700, $750 per ton. So we can – in our industry, I am convinced that if we focus, we can use our capacity of innovation to make, to direct the technologies, not to make more volumes (01:02:03), but to lower the cost and to be more efficient. And I think this is the direction we gave to all our teams, development teams. So we can do there better. I am convinced there is still room to be more efficient in our industry and Total, and in particular again, in the LNG business. And we are working today on Arctic 2 (01:02:25) and the objective there again will be to be under $1,000 per ton, which means a decrease of more than 30% of cost of LNG tons, which is more efficient.

And is it fair to say that for the decline rates of 2% to 3%, would it be an exaggeration to say that's sustainable over the medium-term? If you keep surprising yourself on technology and efficiencies and so on, that effectively you can run to stand still (01:02:52) at around 2% to 3%. Is that a fair statement? Patrick Pouyanné - Total SA: Yes. You can – it's a fair statement. I think you understand very well our industry and our portfolio, the Total portfolio.

Brilliant. Thank you very much.

Our next question comes from Irene Himona from Société Générale. Irene Himona - Société Générale SA (UK): Thank you. Good afternoon, gentlemen. I had firstly two sort of numerical questions on the quarter and then one on Direct Energie. So firstly, your intangibles on the balance sheet, obviously with all the acquisitions you've done, the intangibles have gone up $10 billion, or 70% versus year end. At year end, the goodwill was about 10% of that. Can you say whether the sort of goodwill element is similar or if it has increased? Secondly, corporate and other, since about 2015, 2016, I think you have had a tax credit in that division every quarter and it used to relate to, I think, French downstream taxes. I wonder if you can remind us what is in there in that tax credit and whether we should expect it to continue going forwards? And my third question on Direct Energie, Patrick, you mentioned that with the 6 million or 7 million customers you've got currently and ongoing growth, you will eventually increase the market share towards 15%, and your comment was that 15% is interesting. I wonder if 15% is interesting from a P&L perspective. In other words, is that the level at which you start making profit basically, or whether it relates to something on the power generation side and your ability to perhaps be, I don't know, more flexible there? Thank you. Patrick de la Chevardière - Total SA: Irene, just answering your question about goodwill, this is very simple. Maersk acquisition added $2.5 billion of goodwill. Then you have a question on French tax credit in our balance sheet. We haven't booked all of our tax credit in our balance sheet. So it's just an assumption of the use of our previous in-time losses made when the refining was having and facing trouble seven years ago. And those are the tax credit we have in France. Irene Himona - Société Générale SA (UK): Thank you. Patrick Pouyanné - Total SA: P2 was able to answer, I would not have been able on both questions. So we are well complementary together. I'm not sure I'm perfect – no, my 15% market share is more, I would say, it's more the experience we have in retail in-market and marketing on national businesses like we had in M&S. We divested, for example, our business in the UK in Marketing & Services because it was at 6%, 7%. And again, the question is when do you reach a size where you can really have a virtuous circle because you amortize your fixed cost, your marketing, your advertising costs, your marketing cost on a large base enough of customers, and so that at a (01:06:18) certain point, your breakeven is going down again and you can make offers to customers which are even better. You can resend (01:06:25) part of it. The profitability of the business, it's a business – I told you the objectives, €300 million in five years, so we will be profitable before, let's be clear. If the results of Direct Energie are positive (01:06:44), it's not making losses anymore, where we reach a size with 6%, 7% of market share where you already make some profit and some positive cash flows even if I invest part of that in some production capacities which are absorbing some CapEx. So it's not – my comment was not leading to a threshold of profitability. It's more, I think for Total, if we enter into a market, it has to be sizable compared – if I want that to be sustainable on the medium and long term. When we enter into a market, we are not going there just to have, I would say, $15 million of reserves. We need to have something valuable. So targeting €300 million of cash flow from operations (01:07:28), I think is the ambition that we have in order to enter it and to make a sustainable business within a group which is a very large group. So this is the ambition. Irene Himona - Société Générale SA (UK): Sure. Thank you very much.

Our next question comes from Blake Fernandez from Scotia Howard Weil.

Thanks. Good afternoon. I realize we're late in the hour, so just two points of clarity here if I could on production. For one, going back to Libya, if I'm not mistaken, I think with the acquisition you should be around 80,000 barrels a day, which is about 3% of your total production. Obviously, the country has been fairly erratic with regard to volumes. Is that part of your 6% plus guidance for the year? And then the second question is really on the overall kind of longer-term production target. You've expressed potentially increased appetite to sell upstream assets. I'm just wondering, would that potentially put at risk that longer-term number or were you already contemplating some level of divestitures when you kind of put that number out there in the first place? Thank you. Patrick Pouyanné - Total SA: First question, yes, it's taken into account the 6% plus and we know it's erratic but that's why by the way some people think we are conservative, maybe we are not so well, but it's taken into account and it's from 6% to 6% plus because part of it is coming from Brazil clearly, so we have to recognize it and to put into a figure. Having said that, we're right – maybe it's erratic, but I see more upside than downside. It's a country today we produce less than 1 million barrel of oil per day with the potential of 2 million barrel per day. So when you think to this concession of Waha, the potential of increase of production is huge, can double the production there. So yes, it's erratic today, but it's erratic in the low tide, I would say. There is a more an upside potential whether I would say downside there. Then the second question, clearly, I already answered that several times. When we told you 5%, average 2017, 2022, it was taking into account the fact that we want to divest some upstream assets we never added. We did not put a figure in terms of billion dollars, but it's part of what we said net acquisitions and so – and we have some margins and you cannot tell us that we are sometimes too conservative on our production figure and that sometimes we are too optimistic. We are dealing with you and what we like to do, P1, P2 and P1, I would say together, we like to deliver what we say. And so you can't take that as a commitment and I have – so it's a matter of translating in fact all the resource we have accumulated into some projects. So now the next challenge to sanction the projects and to execute the project. And then if we do that, we deliver the 5% but we have in our portfolio the resource which are necessary to do that. And we have also enough to sell what we want to sell.

Thank you very much. Thanks.

Our next question comes from Thomas Adolff from Credit Suisse. Thomas Adolff - Credit Suisse Securities (Europe) Ltd.: Thank you. I've got three questions as well. Firstly, on Venezuela. I'm assuming you still have some expats in the country and if so, what are the plans there following some worrying news at one of your competitors earlier this week and if you take them out, what does it mean to your operations? Secondly, on refining, I know the focus in Downstream is on pet chem. But I wondered whether you would consider adding more light crude processing capacity at Port Arthur in the U.S.? And finally, just a question on concentration versus diversity of your portfolio. Obviously, if you're too concentrated, you are exposed like Repsol in Argentina. You're too diversified, you create complex organizational structures. And I'm aware when it comes to country risk, definitions can vary from cash flow to value to capital employed. But if stick to cash flow and take your top 10 countries, how much do these represent in terms of percentage of last year's cash flow? And generally speaking, as we consider the portfolio composition, what is the sweet spot or have we hit the sweet spot in terms of risk and value creation for Total? Thank you. Patrick Pouyanné - Total SA: Venezuela, the news are not so good. Let's be clear. First priority for me is, of course, to take care of our people. So we have a lot of our expatriates probably are out and we are limiting the number of people. We also take care, by the way, of our Venezuelan employees very carefully because it's part of the value of the company and there is a limit to what can be done. One of the difficulty and I will tell you, production, our production value is declining because there is a lack of machines, there is a lack of tools, there is a lack of everything. So the main concern on our side is to take care of the operator. We have an upgraded operation, which is a very big machine and there will be a limit to be able to operate the operator and we will take no HSE risk and I think together with our colleagues of Statoil, we are very careful about it and if we have to explain that, we'll take the decision on it. So, yes, it's part of probably what could be a downside but let be clear, in terms of cash flow, we don't make that much money today (01:13:10) from Venezuela. So it will not damage CFFO of Total. It will damage maybe the volume but not the CFFO because it's not a very, very strong operation today. The second one, refining and capacity, we are not – I mean, there is a small opportunity. You probably have some insight so I will not lie to you. There is an opportunity where you have a, what we say, the splitter, there is a condensate splitter in Port Arthur which was built to fit a cracker. Obviously, we've done it. There could be a way to refine more light crude. We are studying that with BASF. Of course, BASF is not a refining company so we Are trying to see if we could optimize one tool. Beyond that – which I think is a 50,000 barrels per day capacity, so it's not very big. Beyond that, there is no plan to add capacity in refining in the U.S. We are not a big U.S. refiners and we let that to the big guys, we are a small guy there. And then, when it comes to risk, this is a very complex question and I'm sorry but I think you can keep it for September or you call Mike, and he will love to answer you because I don't have all the figure in front of me and you need a special lesson there, my dear. Thomas Adolff - Credit Suisse Securities (Europe) Ltd.: Thank very much, Patrick.

Our next question comes from Biraj Borkhataria from Royal Bank of Canada.

Hi. Thanks for taking my question. Just one question left. There's obviously quite a lot going on in the portfolio inorganically but a few months ago, you laid out a fairly long list of projects in the upstream that you could sanction. So I was wondering if you could just give us an update on some of the upcoming FIDs that we should expect and whether given all the deals you have done, you might slow some of these down in order to digest some of the new assets. Thanks. Patrick Pouyanné - Total SA: I think if we take the list, if I try to go through, Zinia 2 in Angola should come in within weeks. We have finalized with the Angolan government in December in the past fiscal terms. We wait for the decree but it's coming. Tenders have been done over there so coming. Uganda is obviously a very big project. It was good news and since we met in February, because now all the partners are aligned. There was a small dispute between CNOOC and the two partners to split the operatorship. It has been done in a smooth way. Total will operate all the north part of (01:15:44) CNOOC in the south. It's crossing one license. All that is online now and so now we are online, we close the deal and we are all intent, I spend some time in Beijing three weeks ago to try to reach – to give a target now with the FID end of this year, beginning of next year and it's moving forward. So I'm optimistic and I hope the market will give us the right price we're expecting. But it's – on the pipeline it seems to be on the good way. So Uganda, Ikike and Nigeria teams are working hard and FID is expected by Q3. Fenix in Argentina, technical job is done, should be able to sanction then we have discussion like always in Argentina about the gas price and gas incentives. Libra 2, we have sanctioned Libra 1. I think we've made a review with Petrobras recently and things are moving on. The local content issue is being solved structurally, not only for Libra 1, in the – with a 40% threshold, which is acceptable, which will allow us to make a profitable project. And so the Brazilian authorities have been efficient there. And Johan Sverdrup too, I know we are very new there but I think Statoil has probably good news for us, so we are working out. I think we are aligned. And 2018 also FID. So this is a clear review. So let's be clear. Taking benefit, being countercycle (01:17:17) is from this low cycle for me are two-fold. One was capacity to replenish resource of Total for the future growth, but the other side is taking benefit of the low cost of CapEx, low CapEx base there to sanction projects. And we continue to be active, not the same teams in Total who are buying, acquiring as one who are developing. We have different objective for different teams.

Thank you, Patrick. It's very thorough.

Our next question comes from Christopher Kuplent from Bank of America.

Thank you. Can I just be very brief? One last question, Patrick, you gave us a 2018 number for $16 billion plus, but actually what I'd like to know is where do think 2018 will end up on your organic front where you've given us $13 billion to $15 billion range? I'm guessing not at the upper end. Patrick Pouyanné - Total SA: I think at the lower end.

Okay. That's great. That's already... Patrick Pouyanné - Total SA: (01:18:22) if it's this year. But again, takes all that as an average and again for – you be clear, at the end of the day, for the company in terms of financial framework, so your question is, how much do we spend in CapEx? We can make a split – so it's maybe, but maybe I'm wrong by giving you such a precise figure, keep the average, keep the range, I'd like to prefer it because again, just before you, before I answered that we are looking the team with short-term CapEx we could activate, so this could have an influence and we are reviewing that this year between teams to see if we could activate so it's not – we manage the company. I prefer to give some range, but prefer figures but it will maybe give a clue to all of you for your model and positive clue I hope so.

We're always keen clues. So thank you. Patrick Pouyanné - Total SA: Thank you, Chris.

Our next question comes from Jean-Luc Romain with CM-CIC Securities.

Good afternoon. Thank you for taking my question. My question relates to Direct Energie. Should I infer from your prepared comments that the shareholders at Direct Energie contacted about their interest to sell? Second question is the cost of acquisition – what is the cost of regulation per client at Total Spring so far? Patrick Pouyanné - Total SA: For the first question, I cannot give you all the secrets of the deal but probably because you are French, thanks to your accent, you probably know that the shareholder – the main shareholder of Direct Energie and myself we have been – we are quite close together, we have been in our histories, so we have permanent interactions, in fact, both of us. So I will not tell you who call who, but again, when the price of the share were declining, there was some incentive for him to call me. But I was also looking to that, both of us. Your second question was about the cost of access for Total Spring, I don't have the answer, sorry for that. But I suggest that one of my colleague will call you after the call because I don't have – I don't want to – I know I have one (01:20:42) already but I don't want to give you a wrong indication and we will call you after the call.

Thank you very much.

There are no further questions in the queue. I'd like to turn the conference back to our speakers for additional or closing remarks. Patrick Pouyanné - Total SA: Thank you. I would like to all of you thank you for this call. We were a little earlier than anticipated because I think you have another call with one of my colleagues just right now. So thank you for all your questions you asked us. I think it will not become a tradition that the CEO will participant in the quarterly call. It has been – we done it today because we were active which is a message for the people who think we will – we continue to be so active as the case. And so, but I think again the company's moving in the right direction and what we observed is the share price begins to reflect in a better way all the efforts, which have been done by all the teams of Total for the coming years. And so I hope it will continue and you can count on one side of our financial discipline, on the other side of the ambition of the management to continue to develop the company. Thank you.