Talisman reports 2Q net loss of $237M

Canada’s Talisman Energy Inc. has announced its operating and unaudited financial results for the second quarter of 2014.

During the quarter the company recorded a net loss of $237 million. The primary driver for the loss, Talisman said, was a $171 million movement relating to cash settlements ($46 million) and non-cash mark-to-market loss ($125 million) on commodity derivatives. In addition, the company lowered the credit adjusted discount rate applied to its asset retirement obligation liabilities across the portfolio by 100 basis points, resulting in an after-tax impairment of $50 million in the UK and $12 million in Norway.

Total production averaged 375,000 boe/d in the quarter, up 4% year-over-year. This includes production of 11,000 boe/d in the quarter from the company’s Monkman, Ojay and Southeast Sumatra assets that have either been sold or held for sale. Production from ongoing operations averaged 364,000 boe/d, up 12% year-over-year and 3% compared to the previous quarter.

Total production from Talisman’s core Americas and Asia-Pacific businesses was 341,000 boe/d, up 3% over the same period last year. Production from ongoing operations from these core regions was 330,000 boe/d, up 12% year-over-year.

Total liquids production averaged 145,000 bbls/d, up 15% year-over-year and up 2% from the previous quarter, reflecting the company’s continued focus on growing higher value liquids. In North America, total liquids production was up 36% year-over-year, to 45,000 bbls/d. In Southeast Asia, total liquids production was up 5% year-over-year, to 45,000 boe/d.
“During the past two years we have focused our efforts and capital on a strong portfolio of long life assets in our Americas and Asia-Pacific core regions,” said Hal Kvisle, President and CEO. “We have invested to grow production and cash flow from our best assets, while working to reduce operating and overhead costs.

“Our year-over-year performance demonstrates solid progress and underlines the strength of our core regions. Total production and liquids volumes from ongoing operations within these areas have grown 12% and 23% respectively. Through disciplined capital investment and a focus on operational excellence, we have grown corporate cash flow by 8% year-over-year, driven by strong performance in our core regions. We remain on track to meet our operating and financial targets for 2014.”