Talisman Energy has reported its operating and financial results for the second quarter of 2013.
2013 Second Quarter Overview
“We continue to make steady progress against our four priorities, and the underlying performance of our core business in the Americas and Asia-Pacific is strong,” said Hal Kvisle, President and CEO. “These regions represent the company’s future; we remain focused on operating efficiencies, cost management and capital investment performance.
“In North America, we have improved operational execution across the portfolio with strong results in Western Canada, the Marcellus and the Eagle Ford plays. Our Marcellus team has sustained production with very little capital investment over the past year, and we are now ready to resume drilling and development activity in response to stronger forward market gas prices. In the Eagle Ford, we continue to drill and complete wells more efficiently, allowing us to reduce our rig count while growing our production volumes at lower capital costs. In Canada, we have advanced our technical understanding of the Montney and Duvernay shale plays, achieving better production rates, higher ultimate recoveries and lower full cycle costs. In our core Edson region, we are successfully developing the Wild River rich gas play, initiating activity in the Wilrich and improving our liquid recoveries through commitments to a deep cut extraction plant in the area.
“Asia-Pacific continuesits strong performance against a backdrop of relatively high natural gas prices. During the quarter, we successfully brought our HST/HSD oil fields offshore Vietnam on stream, adding 12,000 bbls/d of high value light oil production. We continue to pursue oil and gas field development opportunities in Vietnam, Malaysia and Indonesia that are close to our existing operations.
“Year to date, our daily production is approximately 365,000 boe/d and we have generated over $1 billion in cash flow. At the mid-point of the year, we have reviewed our guidance numbers. We expect to increase production in the second half of the year in the Americas and Asia-Pacific, and we expect to meet or exceed our production guidance in those core regions. We continue to experience production issues from our mature North Sea assets, and we are reducing our full-year North Sea production forecast by about 9,000 boe/d. We are working with our joint venture partners to resolve these issues and sustain our North Sea production, but it will take time and require ongoing capital investment.
“Accordingly, we are revising our 2013 production guidance to the lower end of the 375-395,000 boe/d range. We now expect cash flow to be between $2.1-2.3 billion for the year.
“Capital spending2 is expected to come within the $3 billion target set out in March (+/- 5%). We have been more efficient in our capital spending in North America, and this has allowed us to fund incremental capital investment opportunities in both the Americas and Asia-Pacific
“We are making good progress on the organizational front, improving the way we work and reducing our cost structure throughout the company.
“We are actively pursuing non-core asset sales in the Americas and in the North Sea. During the quarter, we opened a data room for our Norway business, we are marketing our equity stake in the Ocensa pipeline in Colombia, we opened a data room for our North Duvernay lands, and we continue discussions with prospective LNG developers with respect to our large Montney positions.
“We have taken steps to renew and strengthen our Board of Directors through the appointment of Brian Levitt, Tom Ebbern and Henry Sykes. Our new directors bring extensive energy, capital markets and leadership experience to our Board, and we look forward to their contributions.
“We are committed to sustaining production from core assets, improving the profitability of every barrel we produce, and focusing our capital program on opportunities that fit with our capabilities and existing operations. We have made significant progress over the past nine months, and we look forward to strong results in the second half of 2013.”