Tags: Talisman | Energy | setbacks | TLM

Talisman Energy Works Around Setbacks

By    |   Wednesday, 07 Dec 2011 04:37 PM

Oil and gas exploration company Talisman Energy (TLM) looks good on paper, with a diverse portfolio of exploration and production assets. Investors in the company have seen the share price tumble, however, on production setbacks, which fueled the share value fall.

Talisman Energy has production operations primarily in the North Sea, North American shale gas fields and natural gas production in Southeast Asia, primarily in Indonesia and Malaysia. Exploration operations continue in these areas, plus in Colombia, Australia, Eastern Europe and other Asian countries. Management's business model has been to use the high cash flow generated by the North Sea production rigs to fund exploration activities in other regions.

For the first nine months of 2011, the company reported cash from operations of $2.3 billion, down from $2.65 billion a year earlier. For the three quarters, non-GAAP earnings from operations were 48 cents per share, up from 42 cents.

Energy production for the nine months was 177,000 barrels of oil and gas liquids per day, down from 188,000. Gas production was 421,000 barrels of oil equivalent, up from 416,000.

Hits and misses

On the hits side for Talisman Energy are the company's East Asia gas production operations, which have shown increasing production and are reaping higher regional prices for gas at over $9 per 1,000 cubic feet (MCF).

A major miss for the company has been reduced production from the North Sea operations due to planned and unplanned rig shutdowns. A second miss was putting the majority of exploration money into North America shale gas operations, where gas prices have stagnated in the $3.50 per MCF range, well below company expectations.

Third quarter results posted a turnaround in cash flow growth, but the quarter continued a string of earnings estimate misses. Company management indicated during the quarterly earnings call that changes in the allocation of exploration assets are being considered.

Recently, JP Morgan analyst Katherine Lucas Minyard upgraded Talisman Energy to overweight, citing the potential to significantly increase production.

The company next reports on Feb. 15.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Companies
Oil and gas exploration company Talisman Energy (TLM) looks good on paper, with a diverse portfolio of exploration and production assets. Investors in the company have seen the share price tumble, however, on production setbacks, which fueled the share value fall. Talisman...
Talisman,Energy,setbacks,TLM
336
2011-37-07
Wednesday, 07 Dec 2011 04:37 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved