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Canexit: will ExxonMobil follow if TotalEnergies unlocks value through an oil sands spin-off?

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09 November 2022

Canexit: will ExxonMobil follow if TotalEnergies unlocks value through an oil sands spin-off?

Report summary

TotalEnergies unveiling of plans to spin off its Canadian oil sands business was one of the surprise packages at its 2022 Investor Day. Other players will take note if the listing in Canada is successful. The timing for the move makes sense. The value of TotalEnergies’ oil sands business has soared over the last two quarters to above pre-pandemic levels. The strategic logic is also compelling. The oil sands is the most carbon-intensive province in TotalEnergies’ portfolio and quickly becomes marginal below US$50/bbl. A spin off is by no means a done deal. It will face choppy market conditions and a direct sale to one of the main Canadian Independents is a real possibility. But success could spur ExxonMobil to adopt a similar exit solution given that it has potentially even more to gain.

Table of contents

  • A creative solution to exit the oil sands
  • TotalEnergies’ oil sands portfolio at a glance
  • Why is the oil sands no longer strategic for TotalEnergies?
  • Cashing in at a peak in the valuation cycle

Tables and charts

This report includes 9 images and tables including:

  • TotalEnergies' upstream portfolio: Scope 1 and 2 emissions intensity versus operating cash margin (2022 to 2031)
  • Evolution of the NPV, 10 of TotalEnergies' oil sands business*
  • The evolution of the implied Brent price in the Canadian Independents' enterprise value**
  • Implied Brent price in companies' enterprise value (CBT Q3 2022)
  • SpinCo's operating cash flow at low, base and high prices
  • ExxonMobil's upstream portfolio: Scope 1 and 2 emissions intensity versus operating cash margin (2022 to 2031)
  • Imperial Oil's enterprise value versus Wood Mackenzie's base case valuation
  • CoRSI sustainability ratings: ExxonMobil and TotalEnergies with and without oil sands

What's included

This report contains:

  • Document

    Canexit: will ExxonMobil follow if TotalEnergies unlocks value through an oil sands spin-off?

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