Patrick de La Chevardière - Chief Financial Officer.

Oswald Clint - Sanford Bernstein Lydia Rainforth - Barclays Capital Martijn Rats - Morgan Stanley Theepan Jothilingam - Nomura International Nitin Sharma - JPMorgan Biraj Borkhataria - RBC Capital Markets Irene Himona - Société Générale Richard Griffith - Canaccord Genuity Bertrand Hodee - Raymond James Anish Kapadia - Tudor, Pickering, Holt & Co.

Thomas Adolff - Credit Suisse Lucas Herrmann - Deutsche Bank Rob West - Redburn Partners Jon Rigby - UBS Christopher Kuplent - Bank of America Merrill Lynch Aneek Haq - Exane BNP Paribas.

Good day and welcome to the TOTAL First Quarter Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Patrick de La Chevardière, CFO. Please go ahead, sir..

The current restructuring plan has improved the Refining & Chemical segment by high-grading the assets and lowering the breakeven. This year, we announced a new roadmap that expands the restructuring program by specific - current restructuring plan has improved the Refining & Chemical - hello, Patrick de La Chevardière here.

Hello, Patrick de La Chevardière here. Hello, Patrick de La Chevardière here. Hello, Patrick de La Chevardière here. Today is World Safety Day and this is the reminder that safety is our number one priority every day at TOTAL. Our safety performance improved last year, but our goal is continuous improvement.

That is why all of our teams will spend some time today for focusing on safety, emphasizing the importance of our 12 golden safety rules. We want everyone to go home safely.

Turning now to our financial results, we reported $2.6 billion of adjusted net income or $1.13 per share for the first quarter 2015, compared to the previous quarter this is a decrease of only 7%. Related to the 30% drop in Brent, this clearly demonstrates that TOTAL is very resilient in a weaker environment.

The first quarter environment was marked by much lower oil prices, but there were some mitigating effects, mainly the Downstream environment was very positive with strong European refining margins and better conditions for marketing.

Also we were helped by the first positive result of our cost-reduction program, higher production, as well as the stronger dollar. In the Upstream, we had significant production growth in first quarter 2015, 7% more than fourth quarter 2014 and 10% more than first quarter 2014.

The most important contribution to the higher production was the new ADCO contract which took effect on January 1. This adds 160,000 barrels per day of oil that we plan to grow and profit from over the next 40 years. Excluding ADCO, volumes were stable compared to 4Q 2014 and up 4% year-on-year.

The three start-ups in the first quarter West Franklin Phase 2, Ofon 2, and Eldfisk II made a positive contribution. And the PSC price impact had a positive effect as well, but these were largely offset by the natural decline and the loss of volume in Libya due to the security situation there.

The year-on-year growth was mainly driven by CLOV, which is actually producing above its plateau and performing very well. As you are all aware the world is facing increasing geopolitical tensions, especially in the Middle East and North Africa.

Our onshore production in Libya which represents about 40,000 barrels per day is shutting due to security condition there, but our offshore production which has a capacity of about 20,000 barrels per day has not been affected.

The situation in Yemen did not affect the first quarter, but all of our production including Yemen LNG has been shut in since the start of the second quarter. And this represents about 80,000 barrel per day net to the company.

It is impossible to project the outcome of these types of events but as I said at the beginning our first priority is the safety of our people. Taking all of these into account, adjusted net operating income for Upstream segment was $1.4 billion in the first quarter of 2015, compared to $1.6 billion in the fourth quarter of 2014.

This represents the decrease of 15% which is significantly lower than the 30% drop in grant. The price impact was mitigated by the positive effects on our cost reduction program, production growth, the lag effect on gas prices and smaller differentials between Brent and our realized liquid prices.

We do not usually comment on the quarter OpEx numbers, but they can vary depending on a number of factors but the trend is clear and our first quarter OpEx is running well below the 2014 average. Most of these cost reduction is linked to our self-help program which targets saving of $800 million for the year in the Upstream.

And assuming that oil prices remain at this level we would expect to see more cost deflation as we move through the year. In countries where we have costs in local currency the stronger dollar has a positive effect on our results.

Given the tough environment including the disruption and shut-ins, we are pleased with the resilient performance of the Upstream. We are on track delivery a very competitive production growth this year and in the year ahead. Despite being in a growth mode, we are effectively reducing cost and lowering CapEx.

We are improving the underlying profitability of the Upstream and making this segment stronger. In contrast to the Upstream the Downstream environment was one of the best we have seen in years, in fact, downstream generated half of our results for the quarter.

Compared to the strong 4Q results, the Refining & Chemical, and Marketing & Services segments each posted double-digit increases in adjusted net operating income raising the Downstream contribution to more than $1.4 billion in the first quarter.

For the Refining & Chemical segment, European refining margins were very strong, but we are also seeing the cumulative benefit of our restructuring program. The Marketing & Services segment is continuing to grow and has increased its profitable contribution to the group.

As a reminder, starting in 2014, we are to apply IFRIC 21 rule, which requires us to recognize most of the property taxes for the year in the first quarter. This charge mainly affects the Downstream and it was around $100 million first Q 2015 and therefore has a negative impact on the quarter-to-quarter comparison.

The first Q Downstream results were strong when needed them most and this clearly demonstrates the value of the integrated model. However, the challenging situation facing the European refining and petrochemical industries has not changed. And our long-term view is that margins will not remain at these high levels.

The current restructuring plan has improved the Refining & Chemicals segment by high-grading the assets and lowering the breakeven. This year we announced a new roadmap that expands the restructuring program by specifically addressing three refineries, Donges and La Mede in France, as well as Lindsey in the UK.

In addition, Refining & Chemicals is executing its cost reduction program with a target of $600 million of saving by 2017. With these plans we will achieve our 2017 objective to reduce the European capacity by 20% and we will reduce breakeven of each of our European refineries to less than $20 per ton.

The Refining & Chemical contribution will fluctuate with market conditions and margins. But we are better able to capture value, because these restructuring efforts have made us stronger and more responsive to the environment.

Looking at the corporate side, the adjusted cash flow from operations was $4.6 billion, a decrease of 19% from the previous quarter, reflecting essentially the resilience of the Upstream relative to the steep drop in Brent. Organic CapEx was $6.1 billion, a decrease of 13% compared to the previous quarter and in line with our budget.

Acquisitions were $2.5 billion, mainly comprised of the bonus for ADCO and more than offset by $2.7 billion of asset sales. Asset sales included the closing of the previously announced sale of Bostik for $1.8 billion, as well as the sale of two non-operated blocks in Nigeria for $800 million around.

We are off to a good start and we are progressing on negotiation to reach our target for 2015. Gearing fell to 28% and is back in our target range, thanks in part to the proceeds from assets and the hybrid bond financing that was secured in February.

I should point out that gearing is also affected by $1.1 billion of impairments, mainly related to deteriorating security situation this quarter. We have fully impaired our onshore field in Libya, which is most of the charge, as well as our producing blocks in Yemen.

As you know, we are very focused on managing cost and cash particularly given the current oil price environment. We are not betting on a quick rebound but we believe that fundamentals will eventually boost prices higher although we cannot say when.

Using certain initiatives like the scrip dividend and hybrid financing we estimate that we can manage our gearing around 30% this year. By 2017, we will more than cover the dividend with free cash flow.

For the near term our strategy to perform right on delivering the new start-ups, eight of them this year including the three that are already producing, at the same time we are reducing our CapEx and OpEx to lower our breakeven in all segments and increase our free cash flow.

The first quarter results show that TOTAL is resilient in a tough environment, and we are positioning the company to be a stronger player by 2017 regardless of oil prices. Now, let’s move to Q&A and as usual, I ask you to try to limit yourself to one question at a time..

Thank you, sir. [Operator Instructions] We will pause for just a moment to allow everyone to signal. And we will now take our first question from Oswald Clint from Ellien’s [ph] Bernstein. Please go ahead, your line is open..

Yes, thank you very much. Patrick, a question maybe on the ultimate CapEx for 2015, it was lower this year. It did talk about some brown - sorry, greenfield delays, but also some less work-overs being drilled at the brownfields, and may have expected that to have some impact on decline rates.

But clearly it moved to 3% decline rates in the first quarter. So there doesn’t seem to be anything noticeably or at least visible coming up.

Could you just talk about the impact of work-overs not being drilled, and if it’s not having or is having, any impact on your base decline rates? And a quick second one, just on the impairments in Libya and Yemen, could you just say if you’re expect - is this a multi-year slowdown in production there? Or are you assuming some recovery in the volumes from both of those companies further down the line? Thank you..

Thank you, Oswald. Prior to answering your question, I have to apologize for the technical issue at the beginning. It seems more difficult to record a speech than to build an FPSO. We are now ready for the Q&A and I am live for London, I can ensure that.

So your first question was about CapEx and any effect on the decline rate that you cannot see actually on the first quarter production. As part of our plan to mitigate the impact of the decrease in oil price, we have planned to reduce CapEx to $23 billion, $24 billion in 2015.

First quarter 2015, we spent $6.1 billion in organic CapEx and this was in line and this is in line with our budget for the quarter. Looking forward, our spending will come down as we start up like Laggan-Tormore and Surmont 2 and close the financing of Yamal.

It is in my view normal that you cannot see now effect of the lower CapEx in terms of maintenance on the decline rate. It’s premature to see any effect in my view at the moment. Second question about impairment in Libya, in first quarter 2015 we recorded $1.1 billion of impairment, but that’s in Upstream that was mainly in Libya and in Yemen.

Due to the deterioration of the security situation, we have decided to entirely write-down our onshore fields in those two countries. We are taking a prudent approach here and hope to restart production in both two countries as soon as security condition will permit it, nevertheless we write-down any asset onshore excluding Yemen LNG.

This charge to equity add the effect of decreasing our earned 2015 - first quarter of 2015 our gearing by 0.4 points..

That’s great, Patrick. Thank you very much..

And we will now take the next question from Lydia Rainforth from Barclays. Please go ahead, your line is open..

Thanks. And Patrick, I will try to speak slowly for you..

Thank you, Lydia. It’s always a pleasure..

All right, in terms of the OpEx number and the cost-reduction program, if I look at the Upstream OpEx number, that overall was down by about $1 billion year-on-year from 1Q 2015 to 1Q - or 1Q 2014 to 1Q 2015.

I’m just wondering, since given the target for the whole year is $800 million for the Upstream, how much of that was actually the royalty being down versus actual underlying OpEx? Should we be looking at that number as being about $200 million per annum as actually underlying cost savings per quarter?.

Okay. Lydia, this is a difficult question actually. In first quarter 2015, we are beginning to see the first benefit of our cost and savings program. Our OpEx decreased significantly in line with our plans and also benefited from the evolution of exchange rates. Let me maybe give you some color and some example of what was done in TOTAL in term of cost.

Globally, we are reducing our headcounts down to 15,500 people in Upstream. Another example in the UK with effect from January we have implemented a 10% cost reduction on contracted staff. In Indonesia, we have optimized operation and released storage tank. In Qatar, we have reduced the work-over frequency.

In Nigeria, our supply vessel no longer use their engine to maintain their position at night and so on. All in all, we do maintain as of today our target of $800 million saving for the Upstream and despite some good figures in the first quarter I think it’s premature to anticipate a change in our target at that time..

Okay. That’s really helpful. Thank you very much, Patrick..

Thank you, Lydia..

We will now take the next question from Martijn Rats from Morgan Stanley. Please go ahead. Your line is open..

Hi. Good afternoon. I wanted to ask you two things. First of all, the tax rate in the Upstream seems a little high, which I would strongly suspect is due to the consolidation of the ADCO contract.

And if you were to sort of strip that out, could you perhaps comment on what is happening to the tax rate underlying overall, of course, looking for evidence that underlying tax rates also moved down with the oil price.

I was wondering if that’s actually happening or not? And secondly, I was hoping you could give us an update on the amount and the financing, and where we stand on that?.

Okay. Thank you, Martijn. About the tax rate a few figures I can give you. The Upstream effective tax rate in first quarter 2015 increased from 57% last quarter 2014 to 61%. This is mainly due to the consolidation of the new ADCO concession.

And I remind you that the former concession was consolidated for the equity method, where now the new concession which is under a joint venture and not a registered company is consolidated as a global consolidation.

Without ADCO, the Upstream effective tax rate actually decreased down to 53%, mainly thanks to a lower tax rate in certain countries like Congo, Angola, Gabon, mainly due to a lower oil price environment and some production mix effect.

The group’s tax rate for first quarter 2015 was at 46% in comparison to 40%., and this is also due to the consolidation of ADCO. An update on Yamal. The project itself is progressing well, as well as also the financing of the project.

My view is that under the current situation we could expect the financing to be put in place prior year-end, I mean in put in place, draw down. Chinese banks have now signed on Head of Agreement with Yamal related to $13.5 billion equivalent financing.

We are hardly discussing and negotiating with European and Asian export credit agencies involved since the beginning, and all of them have confirmed in writing their interest for the project. And we are in advanced discussion with the Russian National Wealth Fund to complement this financing.

So I’m reasonably optimistic at the moment in the completion of this financing..

Great. Thank you very much..

Thank you, Martijn..

And we will now take the next question from Theepan Jothilingam, Nomura International. Please go ahead. Your line is open..

Yes, hi, afternoon, Patrick, and just two quick ones, I guess. Firstly, can you just update on the operational status on Laggan and the Q3 startup? Is there much budgeted for 2015? And the second question just on financials.

Can you give us a recap on how you see DD&A for 2015, please?.

Thank you, Theepan. Always is a question with you. An update of Laggan, recently maybe you heard about it, Petrofac’s statement confirms the Q4 2015 startup. We are working closely with Petrofac, and are applying the contract. Upstream, all works are completed, sub-sea equipment, umbilical and pipeline are installed.

The new gas export line linking the Shetland Island to the rest of the British gas network is completed and full of gas. On Edradour and Glenlivet, authorities have approved the field development plans. So that’s on Laggan. Your first question was about DD&A, the second question about DD&A.

In first quarter 2015, we are beginning to see the first benefit of our cost and saving program. Our OpEx decreased significantly, as I said before in line with our plans and also benefitted from the evolution of exchange rates. Our DD&A was lower, mainly thanks to the past impairment and to exchange rates.

DD&A in 2015 will benefit from impairment, but this will be partially offset by the startup of new projects. Basically DD&A should plateau from 2016..

Great. And sorry, Patrick.

Do you have much budgeted in for Laggan for 2015?.

Can you repeat your question?.

Sorry.

Do you have much volume built into the 8% target from Laggan?.

We have some volume. Let me ask the people to find out. I think we had about 10,000 barrels per day from Laggan this year..

Okay. Thank you. That’s helpful..

And we will now take the next question from Nitin Sharma from JPMorgan. Please go ahead. Your line is open..

Good afternoon, Patrick. Hope all is well. Going back to impairments, you mentioned you’ve impaired all of the onshore assets in Yemen except Yemen LNG. Why is Yemen LNG treated differently? I guess, the security situation is no different for this plant. And second one, maybe you could explain the positive contribution from the corporate line.

More importantly, is there something ongoing in terms of U.S. dollar, euro exchange rate implication in this line that we should expect? Thank you..

Thank you, Nitin. Basically your question is why we haven’t impaired the Yemen LNG. As a result of the security issues near Balhaf, where Yemen LNG is, Yemen LNG put the plant into a preservation mode, and all production and operation at seas mid-April.

With this mode, Yemen LNG could restart production easily and intend to do so as soon as the circumstance is safely permitted. Therefore and there was no reason to impair Yemen LNG. On top of that, Yemen LNG is protected currently under the authority of the army. Second question about the holding result.

First quarter this year the adjusted net operating income reported by our holding was positive of about $25 million, mainly thanks to a one-off gain related to exchange rates. What we did is that in the past that is my personal contribution to the net income of the company. In the past we took long-term position on the U.S.

dollar in line with our exchange rate policy. And these positions provide a $180 million gain in the first quarter 2015. At that stage, we have completed our program for this particular long-term position, but we have other positions in our books..

Thank you, Patrick..

We will now take the next question from Biraj Borkhataria from RBC. Please go ahead. Your line is open..

Hi. Thanks for taking my question. Just one quickly on the Downstream. The French refining roadmap you announced is obviously a positive step for you guys. Could you comment or give any color on the potential profitability impact or ROSI [ph] impact of the changes from the two refineries identified? Thanks..

Okay. The restructuring not only include French refineries, but also include the Lindsey refinery in the UK. Le Mede - so for France, Le Mede restructuring will improve its results by about €150 million per year, which represents an improvement of close of 1% of the Refining & Chemical [indiscernible].

In Donges, our project meets our investment criteria and will ensure the site profitability for the years to come with a break-even below $20 per ton. So the objective of having any refinery below $20 per ton break-even will be achieved by this program.

You should remember also that it is going to enable us to reach our target to reduce our capacity in Europe by 23%..

That’s very helpful. Thanks..

We will now take our next question from Irene Himona from SG. Please go ahead. Your line is open..

Thank you. Good afternoon, Patrick. And I had a question on the Downstream. Is there anything you can say at all on how trading profit in Q1, I know it’s not disclosed, but perhaps in relation to either a normal quarter or last quarter. And then secondly, in Q1 the net cash flow was a negative $1.4 billion.

At the current oil price, what can we - or what do you anticipate for net cash flow for the full-year please? Thank you..

So it’s always difficult to answer about trading. But as any of our competitors, honestly trading, we’re making good profit in the first quarter of this year.

Our trading activities have generated strong results, and we benefitted from product market volatility and crude oil contango structure, because we do have storage capacity for the trading activities and we took advantages of contango. The sharp drop in Brent price has benefitted all of our Downstream sector, including trading.

Going forward, it is always difficult for me to make any bets. But these results demonstrate once again the added value of the integrated model. Second question about cash flow, implicit in your question is, can we use first quarter result as a proxy for the full-year.

Our results this quarter were strong in the context of low oil prices and demonstrate the resilience of the integrated model. Annualizing those quarterly results in my view would not be correct, in particular due to the lag effect, the full impact of flow oil prices on gas should appear second quarter.

There are also obviously other moving parts like Upstream maintenance, which tends to be higher second quarter in comparison to first quarter.

The impact of the deterioration of the security situation in Yemen that has no impact in the first quarter, and honestly refining margin has been exceptionally high this quarter, even as of today, it remains very high. As announced in February, we plan to generate at $70 per barrel, a free cash flow of around $3.5 billion.

CapEx of course, and you remember that the CapEx, of course, will also reduce in the range of $23 billion, $24 billion this year..

Okay. Thank you very much, Patrick..

And we will now take our next question from Richard Griffith from Canaccord. Please go ahead. Your line is open..

Thank you. Good afternoon, Patrick. My apologies for the follow question, because I missed at the start of the call.

But just on the cycle of catching costs at a level that reflects the current oil price, I was just wondering where you’re seeing the industry, because if I look at your proposed project sanctions in the next year or so, I don’t necessarily see much in terms of commentary around FIDs.

So I was wondering where we are in terms of the cost base playing catch-up with the oil price?.

Two, basically do we see cost deflation in the industry at the moment?.

Yes..

We are seeing some changes in the market, for example, deep water rigs, seismic vessel down around 50% to 40%, significant reduction in rights for well services. Clearly, oil-related products also coming down in cost. Significant reductions are yet to be seen in sub-sea cost, building platform, FPSO’s, et cetera.

My view is that the backlog of those drilldown is strong enough, so that they can wait for what they think will be a higher oil price. And on our side, we are waiting for them to reduce their quotation. I’d like to remind you also that we have no major FID this year.

Another information is that the target we gave in term of CapEx and OpEx for 2015 does not include any deflation in our cost-reduction target..

Okay. All right. Thank you..

And we will now take our next question from Bertrand Hodee from Raymond James. Please go ahead. Your line is open..

Hi, Patrick. Two quick questions, if I may. Let’s start with the dividend. TOTAL is to declare its dividend in euro due to the very strong dollar appreciation, now your dividend stream expressed in dollar terms have shrunk significantly.

Would you consider changing the way you declare the dividends, in dollar versus euro? As now your dividend yield compared to the likes of Shell or BP is now considerably lower. So that was the first question. And the second question, you’ve hinted for heavy maintenance in Q2.

Should we think, I would say, normal maintenance FX, tradition FX Q2 over Q1, or this year it should be you think a stronger effect for maintenance?.

So the first question about dividends, our payout ratio for this quarter is 53%, which is quite reasonable if you face a low oil price environment, as we are facing at the moment. We by law cannot express our dividend in another currency than euro, so it will be in euro.

The yield offered by TOTAL seems in my view quite good, even if you can always find another competitor having a better yield at one particular moment. About the maintenance, yes, the level of maintenance will be normal. The level of planned maintenance in the first quarter was in line with the previous quarter and the previous year.

Looking forward, we expect second quarter 2015 production to be impacted by seasonal maintenance, affecting mainly Nigeria OML58, the UK in the Elgin area, and Norway Ekofisk, Elkfisk, and to some extent Indonesia on Tullow. Second quarter 2015 maintenance level should be lower than second quarter 2014, that was exceptionally high last year..

Okay. Thank you. And one final question if I may. Concerning your Libya write-down, I understand the logic of writing down Mabruk knowing that Mabruk, if I understood well has suffered considerable damages.

But have you also written down your stake in Mishara [ph]?.

I don’t know what you call Mishara, but we write-down both of our assets onshore Libya, which in my language are named Mabrouk and Murzuq..

Okay. Okay. Thank you..

We will now take our next question from Anish Kapadia from TPH. Please go ahead. Your line is open..

Good afternoon, Patrick. I have a question on the exploration side. The exploration expense kind of remained quite high this quarter at $600 million. So I was just wondering if you can outline some of the main things that were in there. I was just wondering if there was any rig cancellations and dry holes in Angola.

And then kind of looking forward for the rest of the year, what kind of run rate do you expect to see? It doesn’t seem like we’ve seen the reduction in kind of your exploration spend come through as yet. Thank you..

Yes. I remind you that there is no direct relation between the exploration charge in our P&L and the work done on the field to explore new blocks. The exploration charge in our P&L corresponds to the well expense, to seismic and G&G expenses.

So there is no direct link between the exploration expenses in the P&L and the cash spend on exploration during any given quarter. First quarter of this year of the exploration spend was about half a billion dollars, in line with our budget of $1.9 billion. And in accordance with our 40% cost-cutting plan..

Okay. Thank you. I had one second question if I may, just on the downstream, when I look to your actual net operating income in Q1, it was down versus Q4, in terms of the cash flow, it was down versus Q4. But the net operating income was up about 15%.

I was just wondering, what was the difference in between cash flow and net operating income? Was there some kind of non-cash positive that you saw through the P&L this quarter?.

Sorry. I can’t answer your question immediately. I think this is mainly due to the time lag of the payment of taxes which impacted negatively our first quarter cash flow..

Okay. Thank you..

We will now take the next question from Thomas Adolff from Credit Suisse. Please go ahead, your line is open..

Hi, Patrick. Two questions from me as well, please, hopefully easy ones. Firstly on downstream, clearly demand has surprised the market on the upside, clearly a difference between apparent and real demand. And yet you still seem quite bearish on the refining outlook.

So I guess my question here is given your bearish or pessimistic view versus the forward curve, have you hedged out your forward margin, and if so what proportion? The second question is linked to CapEx, but also to disposals. And correct me if I’m wrong here. Your CapEx profile to me seems a little less flexible than your peers.

And you said it yourself. There’s not much FID in the next couple of years. So i.e., the share of PSID [ph] CapEx was pretty low. So in some ways you can argue, yes, there’s going to be cost deflation. But maybe you will benefit less than your peers, which makes disposal proceeds the more important.

And yes, you have closed some disposals so far this year out of the 4 billion that you’ve agreed last year, and haven’t closed. And you also talked about are we going to do another 5 billion out of the 10 billion planned in 2015.

And I wanted to know what progress you’re making on that latter part, on the 5 billion, and whether you’re still comfortable with that target. Thank you..

Okay. The first question about our ability to add some downstream refining margin, unfortunately the forward curve does not provide capability to actually put in place hedging at a sufficient level for us. On top of that, most of the time, if you simulate a hedging put in place in refining margin, you actually lose money.

So I am quite reluctant to implement huge hedging in refining. Anyway, in the current market conditions, there is very little window to put in place any hedging at the moment.

About what you call lower flexibility for us, I like to remind you that we were the first one, before the oil price dropped, to implement cost-cutting for both CapEx and OpEx, a cost-cutting program. We have reduced our CapEx budget in 2015 by more than 10% on 2014.

And I think we have demonstrated this quarter with our result our ability to be reactive and flexible. We have significantly more flexibility obviously in 2016, and obviously more again in 2017. And if price remains at this current level our capacity to reduce CapEx in 2016 will be as much as to reduce it down to $20 billion for 2016.

About the asset sale, we have closed already $2.7 billion of asset sales this quarter. We have had a good start this year, and we are progressing on negotiation to reach our target for 2015. I can tell you that the team are working with partners that have expressed their interest on a certain number of assets.

I can give you a few examples like the Fruca [ph] network and the 20% stake in Laggan-Tormore if we remain in the UK for this example..

[Foreign Language].

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We will now take our next question from Lucas Herrmann from Deutsche Bank. Please go ahead, your line is open..

Thanks very much. Good afternoon, Patrick. A couple of easy ones for you. LNG, you indicated that the lag effect hasn’t really, or has supported profits through the quarter.

Can you give us any indication of what the likely change would be for Q2 relative to Q1? And secondly, have you factored any of your working capital this quarter?.

So I start with your question about working capital. Working capital we actually didn’t work a lot on it. We only worked on the trading working capital. That’s why all-in-all for other group level, you could see an increase in the working capital. About the LNG prices going forward, basically our LNG business is an oil price linked business.

So there has been a negative impact from the drop in Brent. However, in the first quarter this year we benefitted from positive lag effect, which is usually depending on the contract, between three and six months on prices. First quarter LNG revenues were strong, and also thanks an increased number of redirection on our trading activities.

We redirect 17 cargos first quarter 2015 versus 2014 last quarter, and 12 in first quarter 2014 mainly on Qatargas II. Looking forward, the positive lag effect should wind down midyear and LNG price be lower. But honestly we try to figure out exactly what could be the bottom line effect. And I have no figure to give you at the moment..

Okay.

And Patrick, just remind me, Yemen is producing what? Around 70,000 barrels a day net to you at the present time, or well it would have been?.

If the production was on in Yemen, the contribution would be 65,000 barrels per day, as it was first quarter this year..

Okay. That’s very kind. Thank you. Speak soon..

It was my pleasure, Lucas..

We will now take the next question from Rob West for Redburn. Please go ahead, your line is open..

Hi, Patrick. Thanks for taking my question..

Speak slowly, please..

I wanted to ask about the production sharing contracts which snapped back quite sharply over the quarter, and added 3% to your volumes. I thought that was really interesting, and maybe some upside on the production numbers coming through.

I wonder if you can give us some more details on which production-sharing contract those are, or where in the world, or how mature are those assets. I was bit surprised.

My understanding was that some of the very, very long-standing production-sharing contracts are so far in the money that it would take a bit longer for them to start taking down to a higher entitlement for you. So any more detail around that would be really interesting. Thanks..

Basically we have production-sharing contracts in Nigeria, Angola and Indonesia. Most of the volume effect were related to Angola and Indonesia. And we continue - as a reminder, we continue to invest in older assets like Girassol which give us access to cost-oil [ph]..

Right, right. And then you recovered that cost oil and that investment very quickly..

Yes..

Okay, very good. Thank you. Can I ask one more on the perpetual bonds which you’ve counted for as equity in the quarter….

Now this is not me we will count for. This is IFRS..

Right, right. I do not mean to accuse you of being an accounting standard. Just in terms of the way you think about gearing and what you’re happy with.

Do you ever switch in the way you think about them and think - as you target net debt to equity as a gearing method, are you happy to just strip that out entirely and completely think of it as equity? Or in the back of your mind, do you still partly think about it as debt?.

For me this is a perpetual bond. I have the option to - in my end, I have the option to reimburse them, if I would remember, in seven and 10 years’ time. As gearing was at 28% end of March. This takes into account also the acquisitions made on ADCO, I remind you. We maintain target around 30% for our gearing, and a strong balance sheet.

Honestly, it is very easy for us to have access to the market. The interest are low, and a hybrid giving you equity at 2% a year, it’s a gift..

Yes. Yes, absolutely. Okay. Great. Thank you very much..

Thank you..

And we will now take the next question from Jon Rigby from UBS. Please go ahead, your line is open..

Thank you. Hi, Patrick. Two questions, could I just go back to Yemen? I actually have two questions on that, and then a follow-up question on something else. On Yemen, how logically can you maintain the carrying value of the Yemen plant if you feel that the sourced gas is jeopardized to such an extent that you write it off.

I don’t really understand how the supporting value for that plant can be continued.

And then just on Yemen and possibly the short-term effects of the shut-in, in the context of your portfolio and your trading, will that have a disproportionate impact on your LNG earnings, just simply because it reduces the availability of spare cargo? I think you talked about the redirection activity in the quarter.

And then can I just ask you a question on the dividend? Are you just referenced just now about how even long-term debt is gifted to you at 2% a year.

Do you feel uncomfortable with the scrip dividend where you’re encouraging effectively the market to lend you money at 5% or so, which is the yield on your dividend? So this ongoing issue of new equity and the dilution effect that you’re creating on what is probably the most expensive capital that’s available to you in the market. Thanks..

Jon, I think on Yemen, you have some misunderstanding. We did not impair the field, which is the source of gas of Yemen LNG..

Okay..

We impaired other field than this one. We are not the owner of this field..

Right. I see..

Second on LNG earnings, Yemen LNG in 2015 should have provided 75 cargos over the year. And we in the current situation have impaired the mark-to-market of our book related to those cargos going forward in 2015. You’ve very friendly question about dividend..

It wasn’t supposed to be so confrontational. I apologize..

No, no, no, that’s okay. I know you like it. We make clear that by 2017 we wanted to have a strong balance sheet and in a position to cover in cash a dividend in cash, and this is our target. And I hope we will have sufficient cash flow, if we want to share buyback those shares issued previously.

But my first target, and I think our first target is to protect our balance sheet as much as we can going for this low oil price environment..

Right. And just in the roadshows that you’ve done post 4Q, and I guess the signals you’ve got from the market, what’s your sense about what the take-up of the scrip is going to be? Because clearly you have the discount attaching to it. So I presume you are incentivizing people to take it.

Have you got a sense of what you think the take-up will be?.

Assuming a share price is stable, because of course if the share price collapses during the period, you can elect the option of this change. But assuming a stable share price, we expect something like 60% election for the scrip dividend..

Okay. Good. Thank you, Patrick..

And we’ll now take our next question from Christopher Kuplent from Merrill Lynch. Please go ahead, your line is open..

Thank you. Good afternoon, Patrick. I, if I may, just have one follow-up to the scrip and then one slightly different question.

As far as the scrip is concerned, have you actually confirmed that the 10% discount available to shareholders, if they elect scrip today for not just DPS for 4Q, but remains for the full year? Or how does this evolve? What discounts are you going to be able to propose to shareholders? And secondly, just wanted to dig down into the ADCO acquisition in Q1.

Were there many other notable acquisitions? Or would I be very wrong looking at your cash flow statement, seeing almost $8 billion of CapEx in terms of cash outflows and your comment about $6.1 billion organic CapEx, that this difference of almost $2 billion must largely be ADCO? Or are there any other significant transactions I’m missing? Thank you..

For your last question, you are right, it’s about $2 billion. For the scrip dividend, we legally speaking in France, the maximum discount you can offer is 10%. And legally speaking in France, this is under the power of the Board to decide at each quarter, which level of discount we can offer.

We already decided a 10% discount for the last quarter of 2015 - 2014, sorry. And 10% discount for the first quarter 2015. And we will see quarter-by-quarter, and we will monitor quarter-by-quarter the situation to offer maybe different discount, in the maximum level being 10%..

Okay. That’s interesting.

Does your 60% expectation refer to the full year, assuming a 10% discount throughout the quarters or are you making your own assumptions, which I’m sure you’re going to keep secret?.

No, no. There is nothing secret in that respect. The 60% I was mentioning was related to a 10% discount..

Great. Okay, thank you..

And we will now take our last question from Aneek Haq from BNP Paribas. Please go ahead, your line is open..

Thank you very much.

Patrick, just very quickly on - I’m just trying to understand in terms of credit agencies and maybe an update on your conversations post some of the changes you’ve made in terms of the scrip and the hybrid as well, and any risk of potential downgrades or how you see the rating playing out in a low oil price environment?.

It’s difficult for me to answer, as I didn’t start my discussion and my presentation to the rating agencies, which should take place in the forthcoming six weeks or something like this. But I haven’t discussed with them at the moment. I know that they account for the hybrid for 50% of equity, 50% as debt.

And for the scrip, they will take it as it is, reducing the cash burden as it is designed for..

Okay, great. Thank you very much..

Thank you. As we have no further questions, I will now turn it back over Patrick de La Chevardière for his concluding remarks..

Thank you very much all of you for attending this conference. I know that you had another conference just prior to us. In this new environment for all of us, we are pleased to begin this year with a strong set of results, honestly. That demonstrate our resilience and the integrated model.

Total is making good progress in terms of starting up new fields, increasing production, restructuring the Downstream, implementing its cost reduction. And despite a much lower Brent price, our balance sheet is strong and our cash flow breakeven is improving.

Honestly we are confident that we are implementing the right strategy at the moment to make TOTAL better, stronger, regardless of the environment. Our first quarter results confirm this. So thank you again, safe travels, and hope to see you soon. Bye..

Thank you. That will conclude today’s conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect..