Talisman Energy posts quarterly profit drop but hits post-Sudan-sale targets
By JAMES STEVENSON
CALGARY, Nov. 04, 2003 (The Canadian Press) — Talisman Energy’s third-quarter profits were down 16 per cent from a year ago but the international oil and gas producer said full-year production will surpass last year’s output even after the sale of its controversial Sudan property.
Calgary-based Talisman reported Tuesday that profit for the period ended Sept. 30 was $126 million or 94 cents per share compared with $151 million or $1.08 per share a year earlier. But the company also presented record cash flow for the first nine months of the year at $2.1 billion and promised continued growth through aggressive exploration.
“We have a lot on the go and a lot of it’s going our way and going well,” Talisman president Jim Buckee told analysts.
“Production is on the increase; there are discoveries and there are exciting wells drilling.”
Along with replacing Sudanese production on a per-share basis, Talisman said strong energy prices, a rising Canadian dollar and some of the proceeds of the Sudan asset sale all helped its financial strength.
The company has lowered long-term debt by $700 million since the start of the year to $2.3 billion, bought back 3.3 million shares and increased its semi-annual dividend to 40 cents per share.
Talisman stock closed up 24 cents at $65.04 after Tuesday’s quarterly report.
“I think that’s the message here, that everything’s going according to plan,” said energy analyst Steve Calderwood with Raymond James Ltd. in Calgary.
“Talisman has better exploration upside than they’ve had in quite a while.”
Talisman, with holdings in Canada and the United States as well as the North Sea, Southeast Asia and Algeria, started production in September at a $1-billion development in offshore Malaysia and Vietnam, with 12,000 barrels of oil per day net to Talisman. Buckee said new wells should more than triple production to 40,000 barrels of oil equivalent by next year.
In Indonesia, sales have increased six per cent in the last three months to 36,000 barrels of oil equivalent and the company is in “active negotiations” to sell massive quantities of gas to West Java.
Production from new properties in the Norwegian sector of the North Sea also started in the third quarter.
And potentially significant exploration is being done in Trinidad and Colombia.
Many in the energy sector were keenly watching Talisman this year after it sold its stake in Sudan’s Greater Nile Oil Project to a subsidiary of India’s national oil company for after-tax proceeds of $296 million.
While Sudan proved politically fraught, with critics accusing the company of fuelling civil war in the African country, the sale left a large gap in production.
But internal developments combined with small acquisitions in mid-stream pipelines and gas properties in New York state helped the company regain its position as one of Canada’s largest exploration and production companies.
Talisman now is being watched for growth in the next year.
Buckee told analysts he is less interested in acquisitions than in “new-country development” and exploration.
Talisman is looking at six to eight potential new growth areas, Buckee said, but insisted that any new development must produce at least 30,000 barrels per day within three years.