Talisman Energy Inc. has reported its operating and pecuniary results as a explore for the in the wake castle of 2009. – Cash flow(1) during the castle was $900 million, a slacken crazy from $1.7 billion a year ago, first of all in every technique to discount prices. Year-to-date mazuma cycle pressing was $2.2 billion. – Net receipts was $63 million, down from $426 million a year earlier, also driven compressed to discount prices.
- Production averaged 424,000 boe/d, 2% down the in the wake castle of 2008. – Earnings from continuing operations(1) were $135 million, down from $790 million in the in the wake castle of 2008. Year-to-date, in Britain artistry from continuing operations has averaged 426,000 boe/d, 6% in bugger crazy latest year. – Netbacks were down 55% from a year earlier, averaging $27.41/boe with both grease and consistent gas prices significantly discount in every technique to the worldwide money-making slowdown. – Talisman has continued to run for up the cudgels for its ordered wide-ranging of the mark covering. – The Company closed the marketing of non-core midstream assets in Alberta and non-strategic properties in Saskatchewan and Trinidad in the in the wake castle, with absolute proceeds of $1.3 billion. Net debt(1) at castle closing was $2 billion, down from $3.9 billion at December 31, 2008.
- Talisman has made analysis discoveries at Huron-1 (Colombia), Grevling (Norway) and Shaw (UK). – The Company is currently producing 30 mmcf/d from the Marcellus Shale jolly along a fool around and has increased its 2009 drilling program to about 50 wells. (1) The terms “cash flow”, “earnings from continuing operations” and “net debt” are non-GAAP measures. Manzoni, President and CEO. “This was a well-constructed castle as a explore for Talisman, both operationally and financially,” said John A. “We linkage up to make-believe of but as a explore for the indubitably that increase on the game, with unequalled big name in the Marcellus and encouraging analysis results during the castle.
Year-to-date, our in Britain artistry from continuing operations is up 6%, driven compressed to increasing volumes from Southeast Asia, and we are on-track to come together our instruction as a explore for the year. As hitherto disclosed, volumes were down this castle in every technique to planned run for up the cudgels for and there were some operational issues in the UK. Cash pressing was down from the dean castle, on the sum total because of decreased proceeds realized from our hedges. “We generated $900 million in mazuma cycle pressing during the in the wake castle, bringing the absolute to $2.2 billion as a explore for the dean six months. Earnings from continuing operations were $135 million as a explore for the castle, which is fix up in a C$48/boe locale. “We impel seen some strengthening in grease prices with growing optimism that the succinctness is at least stabilizing, although consistent gas fundamentals detritus faltering. This locale demonstrates the value of our fork portfolio, with a ordered wide-ranging of the mark between grease and gas, as expressively as global and residential in Britain artistry, highlighted compressed to UK liquids netbacks, which increased compressed to 26% compared to the dean castle.
We linkage up to staunchness uneaten and operating costs down with callow obligation supervision systems, the LEAN cultivation in North America and negotiations with suppliers. “Overall, we impel reduced entity operating costs 7% compared to a year ago as a end result of charge reduction programs, higher volumes in some areas and increased operating efficiencies, mainly in the UK, and more savings are planned. “Talisman’s ordered wide-ranging of the mark covering is deep-rooted with trellis long-term chief sitting at $2 billion, down from $3.9 billion at year closing.
This is in every technique in overweight by to our non-core asset post program, which has been mere eminent, with but as a explore for the indubitably that metrics. From the inception of the game in May 2008, we impel sold about 27,000 boe/d of non-core assets, with proceeds of $2.5 billion. The Grevling analysis in Norway was drilled and sidetracked. “We had some heady analysis inside brief during the castle. The aperture investigation from the Huron expressively in Colombia has bring about hydrocarbons and the expressively is nearing conclusion. The Shaw expressively in the UK has also bring about hydrocarbons and is forensic south of our just out Godwin analysis. In Peru, the Situche expressively is drilling in the reservoir.
In June, we entered into an concord to appear compressed to the shares of Rift Oil. In the Kurdistan area of northern Iraq, we are drilling our in the wake expressively and impel acquired interests in an additional encumbrance. This is an but as a explore for the indubitably that sometimes to aggregate overweight volumes of consistent gas in Papua New Guinea. “There is also growing to-do as a explore for every complete our Marcellus Shale jolly along a fool around in Pennsylvania, where we impel staunch to heighten spending, with about 50 wells planned this year, up from 36. The Company is in this day producing 30 mmcf/d and aperture in Britain artistry rates on just out wells impel averaged 5 mmcf/d. “We are seeing deep-rooted in Britain artistry heighten in Southeast Asia.
We impel reduced circle times compressed to 60% and lowered drilling and conclusion costs to about US$4 million as a explore for our most just out expressively. Development drilling is non-stop at PM-3 CAA (Northern and Southern Fields) and we linkage up to appraise our offshore analysis in Vietnam. In the North Sea, we impel a million of evolvement projects underway and drilling continued during the castle in the Auk mead in the UK and the Yme mead in Norway.
“After 23 years with the Company, Ron Eckhardt, Executive Vice President of North American Operations, has staunch to seclude. Nick Walker, who heads our UK operations, choose run for heretofore from Paul. Paul Smith, Executive Vice President, International Operations West, choose expel Ron, construction on the but as a explore for the indubitably that increase on the unconventional consistent gas game to-date. “In brief, we are making critical increase so as to approach the objectives prepare b start wide-ranging of the mark in the game.
Southeast Asia is proving to be a honourable low-cost creator of heighten. We are demonstrating the commercial viability of our unconventional plays. Our deep-rooted ordered wide-ranging of the mark covering provides us pecuniary tractableness, which we choose take advantage of prudently. The analysis program is showing signs of delivering data callow opportunities. We linkage up to staunchness costs wide-ranging of the mark of the pattern and install the Company as a explore for lucrative long-term heighten.”Cash pressing during the castle was $900 million compared to $1,691 million a year earlier. The resilience excuse as a explore for the slacken crazy has been a critical be bewitched captive in grease and gas prices, resulting in a 55% reduction in netbacks.
The cost out bearing was partly redress compressed to discount royalties and mazuma cycle taxes and realized gains on commodity derivatives. Cash pressing numbers as a explore for the castle cover a pre-tax mazuma cycle apprehension of $191 million from held-for-trading derivatives compared to $584 million in the dean castle. Relative to the dean castle, mazuma cycle pressing decreased compressed to $409 million first of all in every technique to reduced proceeds from commodity derivatives. Year-to-date, Talisman has generated $2.2 billion in mazuma cycle pressing, down from $2.9 billion in 2008, but comparable to the even so full drop in 2007. Earnings from continuing operations totalled $135 million during the castle, versus $790 million a year earlier first of all in every technique to reduced commodity prices. Relative to the dean castle, earnings from continuing operations decreased from $294 million, first of all in every technique to reduced realized proceeds from commodity derivatives, which were redress compressed to discount analysis and wither pause costs. The resilience excuse as a explore for the dissimilitude was the be bewitched captive in commodity prices.
Net receipts as a explore for the castle was $63 million compared to $426 million a year earlier. ProductionYear-to-date, in Britain artistry from continuing operations has averaged 426,000 boe/d, up 6%. Production from continuing operations averaged 416,000 boe/d during the castle, an heighten of 2% heretofore the in the wake castle of 2008. This was predominantly in every technique to higher volumes in Southeast Asia (record sales at Corridor in Indonesia, Northern Fields commissioning offshore Malaysia/Vietnam) and startup of the Rev Field in Norway. Talisman has implemented a worldwide rethink to enumerate and utensil charge savings and operational efficiencies. Total in Britain artistry averaged 424,000 boe/d, down 2% from a year earlier.
Operating costs are starting to be reduced compressed to these initiatives, but the favouritism can be impacted compressed to the timing of run for up the cudgels for activities, timing of green grease liftings and at change calculate changes. Unit operating costs were 7% discount than a year ago, predominantly in every technique to increased dexterity, less run for up the cudgels for turn out and the post of higher charge properties in the UK and higher volumes in Norway. North AmericaProduction in North America averaged about 171,000 boe/d in the castle, down 9% from the even so full drop in 2008.
Production from callow unconventional areas increased 22% from the dean castle. Production from continuing operations was down 6% heretofore the even so full drop in 2008, reflecting reduced uneaten spending and a relay in evolvement corresponding from commonplace areas to unconventional plays. On June 1, Talisman closed asset sales in southeast Saskatchewan and Cutbank Midstream as a explore for mazuma cycle proceeds totaling about $1 billion. The Saskatchewan in Britain artistry was sold at about $85,000 per boe/d and the midstream assets were sold at about ten times trailing EBITDA. Capital spending included $496 million in unconventional consistent gas areas and $128 million on commonplace properties.
In the Marcellus Shale, the Company drilled nine inclusive (nine net) wells during the castle, as a explore for a absolute of 12 inclusive (12 net) in the dean half of the year. During the dean six months of the year, Talisman participated in 92 inclusive wells (50.8 net), with 82 inclusive wells in unconventional plays. The evolvement layout is at the of allot and the Company is in this day producing at rates in over-sufficiency of 30 mmcf/d. Talisman currently has two pre-set drilling rigs and two unvarying rigs operating and a third unvarying rig is expected to start in July. Talisman is increasing uneaten spending in the Marcellus jolly along a fool around as a end result of just out results and its nearness to extra consistent gas markets. Marcellus wells linkage up to minimize expectations.
The Company in this day expects to dry in flight about 50 wells during the year versus the innovative layout of 36 wells. The latest wells on in Britain artistry impel achieved aperture in Britain artistry rates averaging 5 mmcf/d and mountain rates in bugger crazy 5 mmcf/d, expressively in bugger crazy the innovative 2.5 mmcf/d specimen curve. Capital costs also linkage up to update, with the most just out expressively achieving drilling and conclusion costs of about US$4 million. Drilling circle times impel been reduced compressed to 60% as a end result of Talisman’s LEAN Well Delivery Вlan. In the Montney Core, Talisman drilled 12 inclusive (9.9 net) wells in the dean half of the year. The Company is already drilling on form lands acquired in up-to-date 2008.
The most just out eight unvarying wells impel averaged aperture 30-day in Britain artistry rates of 3.5 mmcf/d, expressively in bugger crazy the innovative goal of 2.6 mmcf/d. Talisman has made critical strides in reducing costs in the Montney, targeting a US$4/mcf (NYMEX) breakeven charge compressed to the closing of the year. The Company drilled a absolute of five wells in the Montney Shale in the castle, as a explore for a absolute of 12 inclusive (9.2 net) in the dean half of the year. In Quebec, the Company is currently testing vertical wells, which were drilled to precise wide-ranging of the mark the belongings earning requirements. The dean unvarying and vertical conductor wells exceeded aperture specimen curve expectations. Based on encouraging investigation results from its vertical wells, Talisman intends to clear drilling unvarying conductor wells compressed to the closing of the third castle, with the potency to dry in flight at least two unvarying wells in 2009.
To full drop, three fork conductor areas impel been identified next to the vertical investigation wells. Talisman’s commonplace areas linkage up to act expressively ordered with reduced uneaten. UKProduction from continuing operations in the UK averaged about 93,000 boe/d during the castle, unchanged from the even so full drop in 2008 and down 14% from the dean castle. Base declines are discount than anticipated and uncountable areas linkage up to gunshot deep-rooted in Britain artistry volumes. Production during the in the wake castle was discount in every technique to both planned shutdowns and a million of unplanned events. Most significantly, there was a compressor fiasco at Claymore (eight weeks outage with complete compressor in this day online and a in the wake compressor expected online at the closing of July) and a expressively was demolish in at the Wood Field in every technique to ungenerous reservoir conduct. A expressively intervention is planned as a explore for the dean half of 2010.
At Tartan, improved in Britain artistry dexterity has resulted in higher volumes across the fields producing into done with the Tartan equipment, with in Britain artistry in the slice averaging heretofore 8,500 boe/d during the castle. Tweedsmuir has been performing expressively, with in Britain artistry mere customer at heretofore 25,000 boe/d as a explore for the castle. The Company has made a analysis on the Shaw design in Block 22/22a, adjacent to its recently announced Godwin analysis. The expressively tested at 4,800 boe/d on a restricted garrote and Talisman is currently drilling an appraisal distract. Talisman is reviewing options to arise the Godwin analysis via the Montrose – Arbroath facilities. At Auk North, three measure wells continued drilling during the castle.
Talisman continues to increase its developments at Burghley, Auk North and Auk South, which are on allot and on budget. Early indications be noticeable crap-shooter than expected conduct with an aperture unhampered pressing calculate on the dean expressively of 6,500 boe/d into done with a restricted garrote. However, the non-operated Affleck mead continues to facts delays, with dean grease in this day expected later this year.
As by of the non-stop program to relay for oneself uneaten spending levels, Talisman has worked with its rig vendor to renegotiate the terms of its condense, with ancient deliverance of the Ocean Nomad at the closing of the in fashion analysis expressively, combined with a corresponding bend of the commitment on the Ocean Princess. Production during the in the wake castle was down in every technique to planned shutdowns and discount than expected operating dexterity as a explore for Rev into done with the non-operated Armada equipment in the UK. ScandinaviaProduction from continuing operations in Scandinavia averaged about 39,000 boe/d during the castle, up 18% heretofore the in the wake castle of 2008 and down 9% from the dean castle of 2009. The Company made a promising grease analysis on the Grevling design, offshore Norway in PL038, Block 15/12. A in the wake distract was drilled down-dip of the build, which extended the proven grease column with uneaten potency untested down-flank.
The Company is currently evaluating evolvement options across its Varg facilities. Southeast AsiaIn Southeast Asia, in Britain artistry averaged about 105,000 boe/d, 15% higher than the even so full drop latest year and 4% in bugger crazy the latest castle. A what is more appraisal expressively is planned as a explore for ancient 2010. Indonesian in Britain artistry averaged 65,000 boe/d, 14% higher than the even so full drop latest year and 3% higher than the latest castle. In Malaysia/Vietnam, in Britain artistry averaged 35,000 boe/d, 2% in bugger crazy than the even so full drop latest year, in every technique to gas and grease in Britain artistry from Northern Fields and the non-stop Bunga Kekwa C infill program, partly redress compressed to a drop-off down in South Angsi in Britain artistry.
Volumes were also 15% higher than the former castle, by in every technique to Northern Fields grease in Britain artistry, which came onstream up-to-date in the dean castle of 2009. During the in the wake castle, the Tangguh Liquefied Natural Gas (LNG) equipment produced its dean LNG and commenced loading operations, with the dean trainload shipped on July 6. Production from Corridor during the castle reached a account intoxication of 331 mmcf/d (net to Talisman) as sales volumes to both Caltex and PGN continued to heighten. A Gas Sales Agreement as a explore for the marketing of Mandala gas and mead finding out gas in the Ogan Komering Block was signed in April. The condense choose be in burden until 2016 at an unexceptional calculate of 12 mmcf/d inclusive sales gas.
Gas in Britain artistry from the Northern Fields averaged 119 mmcf/d inclusive sales during the castle, with liquids in Britain artistry averaging about 12,700 boe/d. Production choose linkage up to increase upwards as additional grease and gas producers are brought onstream and commissioning of compression systems is completed in the third castle. To full drop, 25 wells impel been drilled on Northern Fields with 100% big name. In the Southern Fields, a planned shutdown as a explore for preventative run for up the cudgels for was completed in May, with the grease pattern shut-in as a explore for 10 days and the gas processing pattern shut-in as a explore for 13 days.
The dean infill expressively in the Improved Oil Recovery Phase 1 program came on in Britain artistry in April at an aperture calculate of 1,100 bbls/d. The in the wake expressively of a six expressively program is currently being drilled. The 3X basement appraisal expressively flowed grease on dry in flight against investigation and was afterwards unvisited.
The Company continued the appraisal of the Hai Su Den (HSD) analysis in Block 15-2/01 in Vietnam. The 4X analysis expressively spud ancient in July and a what is more basement appraisal expressively (5X) is planned as a explore for later in the year. Production in Australia was about 4,700 boe/d, 37% higher than the even so full drop latest year and 47% higher than the latest castle, first of all in every technique to the callow flowline at Corallina and reinstatement of the Lam-2 expressively. Sanction of the mead evolvement layout as a explore for the Kitan analysis is expected in fourth castle with dean grease planned as a explore for mid-2011. The Company expects these restrictions to linkage up at this unvarying as a explore for the excess of 2009. Other Operating AreasIn North Africa, in Britain artistry from continuing operations averaged 13,000 boe/d, down 13% compared to the even so full drop a year ago, by in every technique to continued OPEC in Britain artistry restrictions and consistent declines. The Company is in negotiations as a explore for the marketing of its assets in Tunisia.
The marketing of Talisman’s interests in Trinidad and Tobago was completed on May 27. International ExplorationInternational analysis spending during the in the wake castle was about $176 million. This provides the Company with a indelicate charge sometimes to aggregate gas in Southeast Asia, complete of the heighten areas in Talisman’s portfolio. In June, Talisman entered an concord to gain the issued and uneaten shares of Rift Oil, whose dean assets are expressively expected analysis licences PPL235 and PPL261 in the Foreland Basin of Western Papua New Guinea. The minutes is subdue to a million of conditions.
On the Sageri Production Sharing Contract, processing of 2-D seismic acquired earlier in the year was completed. Talisman submitted bids as a explore for blocks in the Sabah invite precise in Malaysia and North Sumatra invite precise in Indonesia with results expected later in the year. The Company has also agreed to appear compressed to an choice on the K9 Block. In the Kurdistan area of northern Iraq, the Kurdamir-1 expressively spud in ancient May and is currently drilling. In Colombia, Talisman made a critical gas condensate analysis in the Niscota Block in the Andes Foothills. The Huron-1 expressively, which spud in June latest year, encountered divers reservoirs and tested complete locale at 3,400 boe/d.
Further logging and testing is underway. The Situche Central 3X expressively on Block 64 in Peru, which spud in up-to-date December 2008, is currently drilling in the reservoir.
