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Date and page printing time: November 21th 2009 04:58 GMT

Trade's Tools | The FOREX market news

DJMN: 2nd UPDATE: Talisman Energy Posts Loss;Moves Ahead With Growth Plans
(Updates with more details and adds background)
By Edward Welsch and Carolyn King Of DOW JONES NEWSWIRES
OTTAWA (Dow Jones)--Talisman Energy Inc. (TLM) moved forward with its strategy to grow its unconventional oil and gas resources in North America and to expand in Asia during the third quarter, while its earnings suffered from lower commodity prices.
The Calgary-based oil and gas exploration and production company's net profit fell to C$30 million, or 3 Canadian cents a share, hurt by lower commodity prices and year-earlier hedging gains.
The latest results compare with the Thomson Reuters mean earnings estimate of 10 Canadian cents a share.
A year earlier, Talisman had net income of C$1.425 billion or C$1.38 a share; earnings from continuing operations were C$654 million or 64 Canadian cents.
Third-quarter cash flow fell to C$838 million or 83 Canadian cents a share from C$1.68 billion or C$1.65 a share a year earlier, mainly due to lower prices.
Revenue was C$1.54 billion versus C$2.66 billion.
Talisman bought C$570 million in new land in the Marcellus shale gas area in Pennsylvania and the Montney shale gas area in Alberta, and invested C$220 million on exploration in Papua New Guinea, where it's planning on building a liquid natural gas operation, company executives said during a conference call Tuesday. It also acquired new exploration prospects in Indonesia and Malaysia.
Partly as a result of those investments, Talisman raised its forecast for capital spending for the year to C$4.5 billion, up from its original plan of C$3.6 billion.
Talisman will have six producing natural gas rigs in the Marcellus shale by the end of the year, Talisman Chief Executive John Manzoni said, up from three currently, and could have up to 10 rigs operating there next year, depending upon its capital expenditure budget. It also expects to start commercial operations in the Montney area early next year, with plans for three rigs to be in operation there next year.
Manzoni said the break-even point for its Tier 1 unconventional gas resources in the Marcellus was near US$4 per thousand cubic feet, and that the company expects natural gas prices to rise to between US$5 Mcf and US$6 Mcf in the "medium term." Current natural gas spot prices are near $4.30 per MBtu (1 Mcf = 1.028 MBtu).
The company also said that it planned to reorganize its North American operations into separate conventional and unconventional assets, and to seek to dispose of more of its conventional assets next year in order to free up capital to focus on its unconventional investments.
CEO Manzoni said Talisman's capital expenditures next year "will be determined by the pace of those dispositions."
During the fourth quarter, Talisman said it expects to sell conventional assets in Western Canada for about C$300 million and in Tunisia for C$20 million.
Talisman's output averaged 401,000 barrels of oil equivalent a day during the third quarter, which was down from 443,000 barrels a year earlier. Output declined in part due to maintenance shutdowns in the U.K. during the quarter. West Texas Intermediate oil prices averaged US$68.30 a barrel in the latest quarter, well below the year-earlier US$118-a-barrel level.
Talisman said it expects production is expected to increase in the fourth quarter, but it lowered its overall production estimate for 2009 to 423,000-426,000 barrels of oil equivalent a day from its previous view of 430,000 barrels a day as a result of its continuing non-core asset sales.
Talisman shares traded down 1.3% at C$18.10 in recent trading in Toronto.
-By Edward Welsch, Dow Jones Newswires; 613-237-0669; edward.welsch@dowjones.com

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(END) Dow Jones Newswires
November 03, 2009 15:41 ET (20:41 GMT)

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