Talisman Energy reported its operating and financial results for the third quarter of 2012. Hal Kvisle, President and Chief Executive Officer remarked: “Our third quarter results reflect the strengths and challenges of our portfolio. Underlying production increased 6% as a result of strong performance in Southeast Asia, Colombia and the Eagle Ford, and we expect to achieve our full-year production target.”
“However, the financial benefit of these production gains is being offset by low natural gas prices in North America and lower production in the North Sea. “We are working toward a disciplined capital plan for 2013 in the range of $3 billion, smaller and more focused than we’ve seen in recent years. Our objective is to fund our most promising and profitable investment opportunities, focusing on near-term cash generation while keeping our balance sheet in good shape.”
In its 2012 Third Quarter Overview it is stated that “Year-to-date cash flow(1) is $2.3 billion, down 10% from last year, as low North American natural gas prices and lower North Sea production were partially offset by higher production in Southeast Asia.” “The net loss of $731 million in the quarter is largely the result of $443 million in after-tax impairment charges, reflecting the impact of the company’s planned exit from Peru, ongoing uncertainty with the Yme development in Norway, the prohibitions on shale operations in Quebec, and declining reservoir performance at Rev in Norway.”
“In Malaysia, Talisman is on track to assume operatorship of the new Kinabalu PSC in late December 2012. In Vietnam the HST/HSD development remains on schedule and on budget, with first oil projected for the second half of 2013.
The company continues to make progress toward closing the $1.5 billion UK joint venture agreement with Sinopec by year-end.”
Talisman it said “has decided to exit Peru in order to focus on near-term opportunities in its three core regions. The company declared a quarterly dividend of US$0.0675 per common share.”
With the appointment of Hal Kvisle as CEO in September, Talisman is focusing on total shareholder returns and near-term profitability, in particular, generating reliable cash flow per share growth.
To achieve this, Talisman has set four key priorities: “We will live within our means. We will set capital spending budgets that can be funded by operating cash flows. We will pay down debt, strengthen our balance sheet and build financial capacity to act opportunistically when attractive acquisition or development opportunities come our way. We will focus our capital program on projects that come onstream more quickly and deliver sustainable cash flow over the longer term. We will reduce up front capital on high-risk exploration in multiple regions around the world. We will continue to explore, but in regions we know well and in a lower risk part of the exploration spectrum. We intend to build and strengthen our three core regions – the Americas, Southeast Asia and the North Sea – and we will shed non-core assets and focus on our best properties in all three regions. We will improve operational performance and reduce all aspects of our cost structure. We will do things better, faster and at lower cost, maintaining our focus on safe and responsible operating practices” the release noted.
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