Talisman Energy Inc. (TSX: TLM) (NYSE: TLM) reported its operating
and financial results for 2009:
- Cash flow(1) was $4 billion, down 36% from 2008, primarily due
to lower commodity prices. Cash flow in the fourth quarter was $921
million, down 41% from a year earlier, but up 10% compared to the
previous quarter;
- Net income was $437 million, down from $3.5 billion in 2008.
The company recorded a loss of $111 million for the quarter;
- Earnings from continuing operations(1) were $640 million
versus $2.3 billion a year ago. The total for the fourth quarter
was $76 million;
- Talisman completed non-core asset sales with proceeds of
approximately $2.7 billion;
- Capital spending was $4.3 billion, down from $5.2 billion in
2008;
- Net debt(1) at year end was $2.1 billion, down from $3.9
billion a year earlier;
- Production from continuing operations increased 2% over 2008
to 413,000 boe/d. Total production averaged 425,000 boe/d, down 2%
due to asset sales;
- The company replaced 162% of 2009 production with proved
reserves, excluding divestitures, and 112% through drilling and
non-price revisions;
- Reserve replacement costs were $24.30/boe (excluding price
revisions), and $19.72/boe excluding land and price revisions;
- The company spent $1.4 billion on shale plays in North
America, adding substantial acreage and progressing development of
the Pennsylvania Marcellus and Montney shale programs;
- The company set a new production record in Southeast Asia,
volumes increased 18% with completion of the Northern Fields
development and increased contract takes at Corridor;
- In January 2010, Talisman acquired an interest in the Jambi
Merang PSC in Indonesia;
- In the North Sea, first production from the Rev Field was
achieved early in 2009 and the company progressed field
developments at Yme, Auk North, Auk South and Burghley;
- Talisman completed a number of transactions to acquire a large
exploration position in Papua New Guinea (PNG); and
- The company made exploration discoveries in the North Sea,
Colombia and the Kurdistan region of northern Iraq and successfully
appraised the Situche discovery in Peru.
(1) The terms "cash flow", "earnings from continuing operations"
and "net debt" are non-GAAP measures. Please see the advisories and
reconciliations elsewhere in this press release.
"We continued to make significant progress on strategic
implementation through 2009, despite the volatile commodity price
environment," said John A. Manzoni, President and CEO. "Over the
past 18 months, we have been restructuring and repositioning
Talisman, focusing the portfolio, upgrading both the quality of
assets and the growth potential of the company. 2010 will be an
important transition year as we cycle increasing amounts of capital
into developing our shale plays in North America.
"A major objective of the strategy is to improve returns through
lower reserve replacement costs. We've started to see evidence of
this in 2009, largely as a result of successful shale drilling
programs. Our proved reserve replacement cost in 2009 was
$24.30/boe, 43% lower than 2008 and 25% lower than our three year
rolling average. Excluding land expenditures in 2009, this number
is below $20/boe.
"We replaced 112% of production in 2009 through drilling and
non-price revisions, with 173 mmboe of proved reserve additions,
excluding the impact of asset sales. Including the impact of price
and other revisions, the number was 251 mmboe or 162%. In North
America, we replaced 210% of production with proved reserve
additions through drilling.
"With lower oil and natural gas prices brought on by the
economic downturn, we saw netbacks fall by over 40% in 2009, and
these lower commodity prices had a substantial impact on our
financial results.
"Cash flow for the year was approximately $4 billion, versus
$6.2 billion a year earlier, reflecting lower commodity prices,
although we were helped by cash proceeds from derivative contracts,
and lower taxes and royalties. Cash flow in the fourth quarter was
$921 million, down from 2008, but up 10% from the third quarter
with higher production volumes and commodity prices.
"Reflecting this trend, earnings from continuing operations came
in at $640 million versus $2.3 billion, and net income was $437
million, also down sharply, from $3.5 billion a year earlier. We
recognized $1.7 billion of gains on our held for trading financial
instruments in 2008, compared to a loss of approximately $400
million in 2009. However we generated approximately $1 billion in
cash proceeds from these instruments during 2009.
"Production from continuing operations increased 2% to 413,000
boe/d, and our actual production rate for the year was 425,000
boe/d. However, we sold 30,000 boe/d of non-core assets over the
course of the year, which lowered total volumes in 2009 by about
15,000 boe/d.
"These sales generated $2.7 billion in proceeds, with metrics of
approximately $80,000 per boe per day. The divestment program
helped focus our portfolio and strengthen the balance sheet. As a
result, we are in strong financial shape with year end net debt at
$2.1 billion, compared to $3.9 billion at December 31, 2008.
"Capital spending came in at $4.3 billion, with approximately
one-third ($1.4 billion) directed at North American shale programs.
Talisman added substantial amounts of acreage in the Pennsylvania
Marcellus and Montney shale plays, where we now have approximately
4,800 net drilling locations in our Tier 1 acreage.
"We participated in 66 net shale pilot and development wells,
moving the Pennsylvania Marcellus, and two areas within the Montney
shale, to commercial development. We expect to exit 2010 with
Pennsylvania producing between 250-300 mmcf/d as we ramp up to 10
rigs, and recent well results are coming in better than planned.
Pilot work also continues in Quebec.
"We have taken significant steps towards reshaping and
strengthening our international exploration portfolio. We have
built a strategic land position in PNG through a series of
acquisitions, and now have interests in over eight million net
acres, as part of a strategy to aggregate significant gas reserves.
We also acquired additional exploration acreage within our core
operating areas in the North Sea and Southeast Asia, as well as in
South America and the Kurdistan region of northern Iraq.
"In the North Sea, we made exploration discoveries at Grevling,
Shaw and Godwin, and development options are being evaluated. We
also made gas condensate discoveries in Colombia and the Kurdistan
region of northern Iraq and drilled a successful appraisal well in
Peru.
"In Southeast Asia, the company continues to pursue its
successful growth strategy, setting a new production record with
completion of the Northern Fields development in Malaysia/Vietnam
and increased gas sales at Corridor in Indonesia. Talisman
continues to progress development plans for the HSD/HST fields in
Vietnam. Talisman and its working interest partners approved
sanction of the Kitan discovery in December 2009 and are awaiting
approval from the Timor Leste/Australia Authority. We've also
recently acquired an interest in the Jambi Merang PSC in Indonesia,
near the Corridor gas field.
"In the North Sea, the majority of our development capital
program was directed toward progressing the Yme, Burghley, Auk
North and Auk South field developments, which will come onstream in
the 2010 to 2012 time frame. We commissioned the Rev Field in
Norway, with a significant ramp up in production over the course of
the year. The company also drilled a number of successful
development wells, including three in the Varg field.
"In summary, the transition of our portfolio is on track. We
ended the year with a more focused portfolio and a strong balance
sheet. We are on a path to transition into higher return,
longer-term production growth from shale, and we will continue to
step up our investments into shale programs over the next few
years. Our investment plan this year reflects that transition, and
we will maintain flexibility to ensure we can execute against
it."
Financial Results
The financial information contained in this release is
unaudited. The company will file its audited Financial Statements
for the year ended December 31, 2009, along with the related
Management's Discussion and Analysis, Annual Information Form and
Annual Report on Form 40-F by March 8, 2010.
The company announced its capital spending plans for 2010 on
January 11, 2010. For additional information related to this press
release, please visit Talisman's website at
www.talisman-energy.com.
Three months ended Year ended
December 31 2009 2008 2009 2008
----------------------------------------
Cash flow ($ million) 921 1,565 3,961 6,163
----------------------------------------
Cash flow per share (2) 0.91 1.54 3.90 6.06
----------------------------------------
----------------------------------------
Net income (loss) ($ million) (111) 1,202 437 3,519
----------------------------------------
Net income (loss) per share (0.11) 1.18 0.43 3.46
----------------------------------------
----------------------------------------
Earnings from continuing
operations ($ million) 76 502 640 2,330
----------------------------------------
Earnings from continuing
operations per share (2) 0.07 0.49 0.63 2.29
----------------------------------------
Average shares outstanding (million) 1,015 1,015 1,015 1,017
----------------------------------------
(2) The terms "cash flow per share" and "earnings from continuing
operations per share" are non-GAAP measures. Please see the advisories
and reconciliations elsewhere in this press release.
Lower commodity prices had a significant impact on Talisman's
2009 financial results. WTI oil prices averaged approximately
US$62/bbl in 2009, down 38% from the 2008 average of US100/bbl.
North American natural gas prices also decreased from 2008 with
NYMEX and AECO natural gas prices down 55% and 51%,
respectively.
Cash flow for 2009 was $4 billion versus $6.2 billion a year
earlier. Relative to 2008, lower oil and gas prices contributed to
most of the decrease, offset partially by lower cash taxes ($655
million), royalties ($846 million) and higher realized gains on
held-for-trading financial instruments ($547 million). Cash flow
increased 10% to $921 million compared to the third quarter, with
higher production volumes and netbacks.
Earnings from continuing operations, which exclude
non-operational items, were $640 million, compared to $2.3 billion
a year earlier, again reflecting lower commodity prices.
Net income was $437 million versus $3.5 billion in 2008 impacted
by the loss on held for trading financial instruments of $412
million in 2009, compared to a gain of $1.7 billion in 2008,
primarily as prices increased through the year and Talisman's
hedges rolled forward. The company recorded a loss of $111 million
in the fourth quarter, compared to net income of $1.2 billion in
2008, again largely reflecting changes in amounts recognized on
held for trading financial instruments.
The company's DD&A expense decreased in the fourth quarter
of 2009 and for the full year as a whole, due principally to the
requirement in 2008 to use year-end prices to calculate reserves,
which resulted in one property in the UK and one property in Norway
having no proved reserves. As a consequence, the net book value of
these properties of approximately $410 million in the UK and
approximately $90 million in Norway was charged to DD&A in the
fourth quarter of 2008.
Capital expenditures totalled $4.3 billion, including
discontinued operations and non-cash capital lease costs. Talisman
spent $4.1 billion on exploration and development in continuing
operations during 2009, a decrease from $4.8 billion in 2008. North
America accounted for 44% of spending, North Sea development 26%,
Southeast Asia development 11% and international exploration
18%.
The company strengthened its balance sheet, reducing net debt to
$2.1 billion, down from $3.9 billion in 2008, principally due to
the sale of non-core assets.
Production
Three months ended Year ended
December 31 2009 2008 2009 2008
----------------------------------------
Total oil and liquids (bbls/d) 203,000 227,000 211,000 224,000
----------------------------------------
Total natural gas (mmcf/d) 1,320 1,228 1,283 1,247
----------------------------------------
Continuing operations (boe/d) 418,000 407,000 413,000 403,000
----------------------------------------
Discontinued operations (boe/d) 5,000 25,000 12,000 29,000
----------------------------------------
Total production (boe/d) 423,000 432,000 425,000 432,000
----------------------------------------
Production from continuing operations averaged 413,000 boe/d, 2%
above 2008; total production for the year was down 2% to 425,000
boe/d, as a result of asset sales. Production from continuing
operations increased 6% compared to the prior quarter with
increasing shale gas production and the completion of maintenance
turnarounds.
North American natural gas production declined with less
conventional drilling activity and natural declines, partially
offset by increasing production in the Pennsylvania Marcellus and
Montney shale, as well as successful development in the Outer
Foothills.
Production from continuing operations in the UK averaged 89,000
boe/d for the year, 7% lower than 2008 as a result of maintenance
and repair work, and natural declines. In Scandinavia, production
increased from the prior year with first production from the Rev
field and development drilling at Varg and Brage. Talisman set a
new production record in Southeast Asia with completion of the
Northern Fields development and increased contract takes at
Corridor.
Netbacks
Three months ended Year ended
----------------------------------------
December 31 2009 2008 2009 2008
----------------------------------------
($/boe)
----------------------------------------
Sales 55.51 48.45 49.40 76.03
----------------------------------------
Hedging loss - - - (0.17)
----------------------------------------
Royalties 9.13 8.05 7.34 13.62
----------------------------------------
Transportation 1.64 1.14 1.43 1.34
----------------------------------------
Operating expenses 12.84 13.29 12.91 13.57
----------------------------------------
Netback 31.90 25.97 27.72 47.33
----------------------------------------
----------------------------------------
Oil and liquids netback ($/bbl) 44.68 25.40 37.49 59.01
----------------------------------------
Natural gas netback ($/mcf) 3.35 4.46 3.02 5.78
----------------------------------------
In 2009, the company's average netback was $27.72/boe, 41% lower
than 2008, due principally to lower commodity prices in 2009,
partially offset by decreases in royalties. Fourth quarter netbacks
were up 23% from the same quarter in 2008, averaging $31.90/boe,
and 17% above the third quarter of 2009.
Royalty expense was $1.2 billion in 2009, a 42% decrease from
2008, reflecting lower commodity prices. The company's average
royalty rate was 15%, a decrease of 3% compared to 2008.
Total operating costs for the company were $2 billion during
2009, relatively consistent with 2008. On a per unit basis, costs
decreased 5% to $12.91/boe from the previous year, due mainly to a
4% decrease in the UK and a 17% decrease in Scandinavia.
Proved Gross Reserves
Proved Gross Reserves
Average 2009 Pricing
mmboe
December 31, 2008 1,434.3
Discoveries, extensions and additions 172.6
Revisions and transfers 1.2
Price revisions 77.1
Net acquisitions and dispositions (119.5)
Production (155.0)
December 31, 2009 1,410.7
The company added 251 mmboe of proved gross reserves in 2009
(before asset sales), replacing the equivalent of 162% of annual
production. Of the total increase, 77 mmboe (31%) was due to higher
prices (average 2009 prices versus year end 2008 prices, using the
new SEC rules). Excluding the impact of price changes, the company
replaced 112% of production. Total reserves fell by 2% due to
non-core asset sales.
At year end 2009, Talisman had 865 mmboe of probable reserves,
an increase of 13% from 2008.
In North America, the company replaced 210% of production (129
mmboe) with proved gross reserves through drilling, with 90 mmboe
coming from the Marcellus shale. Proved undeveloped reserves
(PUDs), account for approximately 26% of total proved reserves in
North America.
Internationally, the company replaced 144% of production,
including price revisions. No proved reserves were booked for PNG
at year end. International reserve additions can be highly variable
because they depend on development approval before discoveries can
be moved to the proved reserves category.
At year end 2009, the company had approximately 400 mmboe of
PUDs, which accounted for 28% of total proved reserves. Of these
PUDs, 38% were in North America and 62% were international.
Proved reserve replacement costs averaged $24.30/boe in 2009,
compared to $42.87/boe in 2008 and a three year rolling average of
$32.38/boe (excluding price impacts).
North America
Production from continuing operations averaged approximately
158,000 boe/d in 2009, a 4% decrease over 2008, due to natural
declines and reduced conventional drilling. Natural gas production
from continuing operations averaged 788 mmcf/d.
Talisman spent $1.4 billion on shale gas programs in North
America, including land, development, infrastructure and drilling.
In November 2009, the company announced it had spent $570 million
to acquire 170,000 net acres of high quality land in the
Pennsylvania Marcellus and Montney shale plays, which now have a
potential 4,800 net drilling locations. Talisman now has interests
in approximately two million net shale acres.
In the Pennsylvania Marcellus area, the company drilled 53 gross
(45.5 net) wells, 38 operated and 15 non-operated. At year end, 27
wells were on production, exiting the year at 65 mmcf/d (December
average). Six drilling rigs are currently operating, with plans to
increase this up to 10 rigs by year end (drilling up to 170 net
wells) with a planned exit rate of between 250-300 mmcf/d.
Talisman continued to progress its Montney shale gas play in
2009. The company drilled 16 gross (15 net) wells, 15 of which were
operated and one non-operated. Thirteen wells have been completed
to date, of which nine were onstream at year-end, including five
horizontal wells that were successfully completed, tested and tied
in during the fourth quarter. Total production at year end was 14
mmcf/d (December average), with an expected 2010 exit rate between
40-60 mmcf/d.
Talisman is continuing its pilot program in Quebec where the
company holds rights to 756,000 net acres. The company completed
the earning phase of its drilling program in Quebec during 2009.
The company drilled two horizontal wells in Quebec in 2009 and is
currently drilling a third horizontal well. Talisman expects to
drill a fourth horizontal well this year, testing all four wells in
2010.
Production from Talisman's conventional areas was 976 mmcfe/d.
In total, 64 gross (39 net) wells were drilled in 2009, with
excellent results in the Outer Foothills.
Talisman continued to focus its operations, completing sales of
non-core midstream assets in Alberta and non-strategic properties
in southeast Saskatchewan and southern Alberta. Talisman is
evaluating additional sales of conventional assets, depending on
market conditions. During 2009, Talisman restructured its North
American operations into Conventional and Shale Gas businesses.
UK
Production from continuing operations in the UK averaged 89,000
boe/d, a 7% decrease from 2008. Reductions from a number of fields,
due to planned and unplanned shutdowns and declines, offset the
reinstatement of Galley and Petronella in 2009, as well as the
startup of the Affleck field in August.
The company spent $531 million on development in the UK, with
just under half directed at the Auk North and Auk South projects.
Additional spending during the year included progressing the
Burghley development, completing the Scapa Production Riser Upgrade
project and drilling seven development wells.
In the Central North Sea, the Auk North development is underway
and two wells were drilled during the year. Auk North is expected
to come onstream in 2011. The Auk South redevelopment is also
progressing with detailed engineering completed during 2009. First
production is expected in 2012.
During the year, the Tweedsmuir Phase 3 water injection
development project was completed. The company also progressed the
Burghley development, installing the riser and drilling a
development well. The subsea and topside facilities will be
completed in 2010, with first oil scheduled towards the end of the
year.
In January 2009, the company sold its assets in the Netherlands,
with proceeds of approximately $600 million.
Scandinavia
Production from continuing operations in Scandinavia averaged
44,000 boe/d for 2009, a 26% increase over 2008, mainly due to
increased volumes from Varg and the Rev Field, which came onstream
in January. The company spent $528 million on development in
Scandinavia during 2009, with approximately 75% directed at the Yme
development. A total of eight development wells were drilled in
Scandinavia during the year, with an additional four wells drilling
at year end.
Development of the Yme Field in the Norwegian Continental Shelf
continued throughout year. The company completed the first phase of
drilling in the fourth quarter, including three horizontal
producers and two water injector wells. First oil from Yme is
expected in the second half of 2010. Talisman completed the sale of
a 10% interest in the Yme field during 2009.
In the Varg Field, three successful wells were completed in
2009, increasing average net production from 7,500 boe/d in the
third quarter to 18,000 boe/d in December.
At Brage, a new oil producer and a new water injector well were
completed in 2009, with net oil production averaging 10,800 boe/d
at year end. A new development well has been completed more than
two months ahead of plan and it is expected to be on production in
February 2010.
Production performance improved significantly at the Rev Field,
which came onstream early in 2009, increasing from 6,500 boe/d in
the third quarter to 23,000 boe/d (net) in fourth quarter.
Southeast Asia
Production from continuing operations in Southeast Asia averaged
108,000 boe/d, an increase of 18% over 2008. The main production
increases came from a full year of gas production from the Northern
Fields in PM-3 CAA, first oil from the Northern Fields and
additional gas sales in Indonesia. There were also increased
volumes from the incremental oil recovery program in the Southern
Fields, a full year of production from Song Doc, a new infill well
in Australia and first production from Tangguh.
In Malaysia, overall production was 31,600 boe/d, up 1% from
2008, but production from the PM-3 CAA increased 14%. Talisman
spent $326 million, approximately half of total spending in
Southeast Asia to complete the Northern Fields development,
including 17 total development wells and one exploration well.
Indonesian production was approximately 66,500 boe/d, 19% higher
than 2008, with record production from Corridor due to higher
contract takes. In January 2010, Talisman acquired a 25% interest
in the onshore Jambi Merang Block where development is underway.
Talisman drilled three exploration and 23 development wells in
2009.
Production in Vietnam in 2009 averaged 4,800 bbls/d from Block
46/02. The Government of Vietnam approved reserves assessments for
the Hai Su Trang (HST) and Hai Su Den (HSD) fields within Block
15-2/01 and a declaration of commerciality occurred early in the
year. The company chose to write off a number of
exploration/appraisal wells during 2009, all outside of the
development area. These wells encountered hydrocarbons but were not
commercial. Talisman has taken this into account and is reviewing
the timing of sanction for development of the HST field and an
early production scheme for the HSD discovery.
Production in Australia was 5,160 boe/d, 66% higher than 2008.
Talisman and its working interest partners approved sanction of the
Kitan discovery in December and are waiting approval from the Timor
Leste/Australia Authority.
Other
In Talisman's other areas, production from continuing operations
during the year averaged 14,000 boe/d, a decrease of 7% from 2008,
due to OPEC restrictions. Talisman sold its interests in Trinidad
and Tobago and announced the intention to sell assets in
Tunisia.
International Exploration
International exploration spending during the year was $756
million, with a number of significant discoveries, in addition to
building a highly prospective acreage position in PNG.
Over the course of the year, the company entered into a number
of agreements to acquire interests in 10 onshore exploration blocks
in the western province of PNG. Four onshore exploration wells are
planned this year as the company pursues its gas aggregation
strategy. The company now holds interests in 12 blocks covering in
excess of eight million net acres subject to regulatory
approval.
In Vietnam, Talisman drilled three appraisal wells adjacent to
the HSD discovery and farmed-in to two deep water exploration
blocks in the Nam Con Son Basin. Blocks 133 and 134 cover
approximately 3.3 million acres.
Talisman was awarded the Andaman III block, offshore Indonesia.
The block, which is approximately 2.1 million acres in size, is an
under-explored, deep water block. Talisman was also awarded two
offshore Sabah blocks in Malaysia covering in excess of 3.2 million
acres in water depths less than 300 feet.
In the UK, Talisman made discoveries at Godwin and Shaw in the
Central North Sea. Pre-engineering work is underway as the company
looks to develop these discoveries, along with the Cayley discovery
made in late 2007, via the Talisman operated Montrose/Arbroath
facilities.
In Norway, Talisman made a discovery at Grevling and an
appraisal well is planned for 2010. The company also increased its
acreage holdings in the Barents Sea, through the 20th Licence Round
and an acreage swap.
The Situche discovery on Block 64 in Peru was successfully
appraised in 2009 and drilling was ongoing at year end. In April
2009, Talisman was awarded a 55% working interest in Block 158 in
Peru.
Talisman made a significant gas condensate discovery in the
Niscota Block in the Colombian Andes Foothills. The Huron-1 well
encountered several reservoirs and tested one zone at 3,400 boe/d.
In January 2009, Talisman was awarded a 100% working interest in
Block 9.
In the Kurdistan region of northern Iraq, the Kurdamir-1 well in
Block 44 discovered significant amounts of gas condensate in an
upper zone. The well was drilling towards a deeper target at year
end. In June 2009, Talisman acquired an interest and operatorship
in Block K9.
Talisman Energy Inc. is a global, diversified, upstream oil and
gas company, headquartered in Canada. Talisman's three main
operating areas are North America, the North Sea and Southeast
Asia. The Company also has a portfolio of international exploration
opportunities. Talisman is committed to conducting business safely,
in a socially and environmentally responsible manner, and is
included in the Dow Jones Sustainability (North America) Index.
Talisman is listed on the Toronto and New York Stock Exchanges
under the symbol TLM. Please visit our website at
www.talisman-energy.com.
Forward-Looking Information
This news release contains information that constitutes
"forward-looking information" or "forward-looking statements"
(collectively "forward-looking information") within the meaning of
applicable securities legislation. This forward-looking information
includes, among others, statements regarding:
- expected production growth and returns arising from shale;
- maintenance of flexibility in relation to the investment
plan;
- expected Pennsylvania production volumes and drilling;
- expected onstream dates of North Sea developments;
- expected medium term growth, and longer-term production growth
from shale;
- anticipated filing dates of financial statements, management
discussion & analysis, the annual information form, and the
annual report;
- the expected 2010 exit rate for the Montney shale gas
play;
- planned drilling in Quebec;
- planned sales of conventional assets;
- expected first oil from, and completion of facilities at, the
Burghley development;
- expected first oil from the Yme Field;
- expected production timeframe of a new development well at
Brage;
- the intention to sell assets in Tunisia;
- planned onshore exploration wells in PNG;
- planned development at Godwin, Shaw, and the Cayley discovery;
and
- the planned Grevling appraisal well.
The following material assumptions were used in drawing the
conclusions or making the forecasts and projections contained in
the forward-looking information contained in this news release.
Talisman has set its 2010 capital expenditure plans assuming: (1)
Talisman's production in 2010 will be broadly the same as 2009 at
around 425,000 boe/d excluding any sales in North America during
the year; (2) a US$60/bbl WTI oil price, and (3) a US$3.50/mmbtu
NYMEX natural gas price. Information regarding business plans
generally assumes that the extraction of crude oil, natural gas and
natural gas liquids remains economic.
Undue reliance should not be placed on forward-looking
information. Forward-looking information is based on current
expectations, estimates and projections that involve a number of
risks, which could cause actual results to vary and in some
instances to differ materially from those anticipated by Talisman
and described in the forward-looking information contained in this
news release. The material risk factors include, but are not
limited to:
- the risks of the oil and gas industry, such as operational
risks in exploring for, developing and producing crude oil and
natural gas, market demand and unpredictable facilities
outages;
- risks and uncertainties involving geology of oil and gas
deposits;
- uncertainty related to securing sufficient egress and markets
to meet shale gas production;
- the uncertainty of reserves and resources estimates, reserves
life and underlying reservoir risk;
- the uncertainty of estimates and projections relating to
production, costs and expenses;
- the impact of the economy on the ability of the counterparties
to the Company's commodity price derivative contracts to meet their
obligations under the contracts;
- potential delays or changes in plans with respect to
exploration or development projects or capital expenditures;
- fluctuations in oil and gas prices, foreign currency exchange
rates and interest rates;
- the outcome and effects of any future acquisitions and
dispositions;
- health, safety and environmental risks;
- uncertainties as to the availability and cost of financing and
changes in capital markets;
- risks in conducting foreign operations (for example, political
and fiscal instability or the possibility of civil unrest or
military action);
- changes in general economic and business conditions;
- the possibility that government policies or laws may change or
governmental approvals may be delayed or withheld; and
- results of the Company's risk mitigation strategies, including
insurance and any hedging activities.
The foregoing list of risk factors is not exhaustive. Additional
information on these and other factors, which could affect the
Company's operations or financial results are included in the
Company's most recent Annual Information Form. In addition,
information is available in the Company's other reports on file
with Canadian securities regulatory authorities and the United
States Securities and Exchange Commission (SEC). Forward-looking
information is based on the estimates and opinions of the Company's
management at the time the information is presented. The Company
assumes no obligation to update forward-looking information should
circumstances or management's estimates or opinions change, except
as required by law.
Reserves Information
Talisman's disclosure of reserves data and other oil and gas
information is made in reliance on an exemption granted to Talisman
by Canadian securities regulatory authorities, which permits
Talisman to provide certain disclosure in accordance with US
disclosure requirements. The primary differences between the US
disclosure requirements and the Canadian disclosure standards under
National Instrument 51-101 ("NI 51-101") are that (i) SEC rules
require disclosure only of proved reserves, whereas NI 51-101
requires disclosure of proved and probable reserves (ii) SEC rules
require reserves to be cash flow positive on an undiscounted basis,
whereas NI 51-101 requires reserves to show a hurdle rate of
return; and (iii) SEC rules require that reserves and the
associated future net revenue be estimated using historic average
annual prices, whereas NI 51-101 requires disclosure of reserves
and the associated future net revenue using forecast prices. The
information provided by Talisman in this news release may differ
from the corresponding information prepared in accordance with NI
51-101 standards. Talisman's proved and probable reserves, using
SEC annual average pricing methodology, have been estimated using
the standards contained in Regulation S-X of the SEC, which
requires that proved and probable reserves be estimated using
existing economic and operating conditions. US practice is to
disclose net reserves after the deduction of estimated royalty
burdens. Talisman makes additional voluntary disclosure of gross
reserves.
The exemption granted to Talisman also permits it to disclose
internally evaluated reserves data. Any reserves data contained in
this news release reflects Talisman's estimates of its reserves. No
independent qualified reserves evaluator or auditor was involved in
the preparation of the reserves data disclosed in this news
release.
Reserves Replacement Ratio
The reserves replacement ratios (before net acquisitions and
dispositions) were calculated by dividing the sum of changes
(revisions of estimates and discoveries) to estimated gross proved
oil and gas reserves during 2009 by the Company's 2009 gross
production. The Company's management uses reserves replacement
ratios as an indicator of the Company's ability to replenish annual
production volumes and grow its reserves. It should be noted that a
reserves replacement ratio is a statistical indicator that has
limitations. As an annual measure, the ratio is limited because it
typically varies widely, based on the extent and timing of new
discoveries, project sanctioning and property acquisitions. Its
predictive and comparative value is also limited for the same
reasons. In addition, since the ratio does not include cost, value
or timing of future production of new reserves, it cannot be used
as a measure of value creation.
Reserve Replacement Costs
In this news release, Talisman discloses reserve replacement
costs. Reserve replacement costs are used by the Company to
determine the cost of reserves additions in a period. Talisman's
reported reserves replacement costs may not be comparable to
similarly titled measures used by other companies. Reserves
replacement costs may not reflect full cycle reserves replacement
costs. Reserves replacement costs' predictive and comparative value
is limited for the aforementioned reasons. Reserves replacement
costs are calculated by dividing exploration and development
capital spending (including discontinued operations, but excluding
midstream) by proved reserve additions (excluding price revisions).
The reserves replacement cost in 2008 was $42.87/boe and in 2007
was $33.69/boe. The average reserves replacement cost for 2009,
2008, and 2007 was $32.38/boe.
Netbacks
Talisman also discloses its Company netbacks in this news
release. Netbacks per boe are calculated by deducting from sales
price associated royalties, operating and transportation costs.
Gross Production
Throughout this news release, Talisman makes reference to
production volumes. Such production volumes are stated on a gross
basis, which means they are stated prior to the deduction of
royalties and similar payments. In the US, net production volumes
are reported after the deduction of these amounts. US readers may
refer to the table headed "Continuity of Proved Net Reserves" in
Talisman's most recent Annual Information Form for a statement of
Talisman's net production volumes by reporting segment that are
comparable to those made by US companies subject to SEC reporting
and disclosure requirements.
Boe Conversion
Throughout this news release, barrels of oil equivalent (boe) is
calculated at a conversion rate of six thousand cubic feet (mcf) of
natural gas for one barrel of oil and is based on an energy
equivalence conversion method. Boes may be misleading, particularly
if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is
based on an energy equivalence conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Canadian Dollars and GAAP
Dollar amounts are presented in Canadian dollars, except where
otherwise indicated. Unless otherwise indicated, the financial
information is set out in accordance with Canadian GAAP which may
differ from U.S. GAAP.
Non-GAAP Financial Measures
Included in this news release are references to financial
measures used in the oil and gas industry such as cash flow,
earnings from continuing operations and net debt. These terms are
not defined by GAAP in either Canada or the U.S. Consequently,
these are referred to as non-GAAP measures. Talisman's reported
results of cash flow, earnings from continuing operations and net
debt may not be comparable to similarly titled measures reported by
other companies. Cash flow represents net income before exploration
costs, DD&A, future taxes and other non-cash expenses. Cash
flow is used by the Company to assess operating results between
years and between peer companies using different accounting
policies. Cash flow should not be considered an alternative to, or
more meaningful than, cash provided by operating, investing and
financing activities or net income as determined in accordance with
Canadian GAAP as an indicator of the Company's performance or
liquidity. Cash flow per share is cash flow divided by the average
number of common shares outstanding during the period. A
reconciliation of cash provided by operating activities to cash
flow follows.
Cash Flow
December 31, 2009
C$ million, except per share amounts
Three Months
ended Year ended
December 31 2009 2008 2009 2008
----------------------------------------------------------------------------
Cash provided by operating activities 624 1,569 3,599 6,154
Changes in non-cash working capital 297 (4) 362 9
----------------------------------------------------------------------------
Cash flow 921 1,565 3,961 6,163
Cash provided by discontinued
operations (1) 9 (71) (85) (465)
----------------------------------------------------------------------------
Cash flow from continuing operations 930 1,494 3,876 5,698
----------------------------------------------------------------------------
Cash flow per share 0.91 1.54 3.90 6.06
----------------------------------------------------------------------------
Cash flow from continuing operations per
share 0.92 1.47 3.82 5.59
----------------------------------------------------------------------------
1 Comparatives restated for operations classified as discontinued during
2009.
Earnings from continuing operations are calculated by adjusting
the Company's net income per the financial statements, for certain
items of a non-operational nature, on an after tax basis. The
Company uses this information to evaluate performance of core
operational activities on a comparable basis between periods.
Earnings from continuing operations per share are earnings from
continuing operations divided by the average number of common
shares outstanding during the period. A reconciliation of net
income to earnings from continuing operations follows.
Earnings from Continuing Operations
December 31, 2009
C$ million, except per share amounts
Three Months
ended Year ended
December 31, 2009 2008(6) 2009 2008(6)
----------------------------------------------------------------------------
Net income (loss) from continuing
operations (190) 1,162 (708) 3,122
Unrealized (gain) loss on financial
instruments (1) (tax adjusted) 173 (805) 1,056 (877)
Additional DD&A expense (2) (tax
adjusted) - 225 - 225
Stock-based compensation expense
(recovery)(3) (tax adjusted) 20 (26) 198 (56)
Restructuring charges (tax adjusted) 14 - 14 -
Future tax rate changes 21 - 21 -
Future tax charge (recovery) of
unrealized foreign exchange
(losses) on net foreign denominated
debt (4) 38 (54) 59 (84)
----------------------------------------------------------------------------
Earnings from continuing operations (5) 76 502 640 2,330
----------------------------------------------------------------------------
Per share(5) 0.07 0.49 0.63 2.29
----------------------------------------------------------------------------
1 Unrealized losses on financial instruments relate to the change in the
period of the mark-to-market value of the company's held-for-trading
financial instruments.
2 Additional DD&A expense relates to properties in the UK and Norway that
had no proved reserves at 2008 year-end prices. The net book value of
these properties was charged to DD&A expense in the fourth quarter of
2008.
3 Stock-based compensation expense relates to the mark-to-market value of
the company's outstanding stock options and cash units at December 31.
The company's stock-based compensation expense is based on the
difference between the company's share price and its stock options or
cash units exercise price.
4 Tax adjustment reflects future taxes relating to unrealized foreign
exchange gains and losses associated with the impact of fluctuations in
the Canadian dollar on net foreign denominated debt.
5 This is a non-GAAP measure. Refer to the section in this news release
entitled Non-GAAP Measures for further explanation and details.
6 Comparatives restated for operations classified as discontinued in
2009.
Net debt is calculated by adjusting the Company's long-term debt
per the financial statements for bank indebtedness and cash and
cash equivalents. The Company uses this information to assess its
true debt position and eliminate the impact of timing
differences.
Net Debt
December 31, 2009
$ million
Year ended
December 31, 2009 2008
----------------------------------------------------------------------------
Long-term debt (including current portion) 3,780 3,961
Bank indebtedness 36 81
Cash and cash equivalents (1,690) (91)
----------------------------------------------------------------------------
Net debt 2,126 3,951
----------------------------------------------------------------------------
Talisman Energy Inc.
Highlights
(unaudited)
Three months Year
ended ended
December 31 December 31
2009 2008 2009 2008
----------------------------------------------------------------------------
Financial
(C$ million unless otherwise
stated)
Cash flow (1) 921 1,565 3,961 6,163
Net income (loss) (111) 1,202 437 3,519
Capital expenditures 1,436 1,558 4,080 4,872
Per common share (C$)
Cash flow (1) 0.91 1.54 3.90 6.06
Net income (loss) (0.11) 1.18 0.43 3.46
----------------------------------------------------------------------------
Production
(daily average)
Oil and liquids (mbbls/d)
North America 29 41 34 40
UK 79 96 86 94
Scandinavia 38 34 34 33
Southeast Asia 43 35 41 36
Other 14 21 16 21
----------------------------------------------------------------------------
Total oil and liquids 203 227 211 224
----------------------------------------------------------------------------
Natural gas (mmcf/d)
North America 787 828 803 856
UK 13 41 19 38
Scandinavia 100 19 58 19
Southeast Asia 420 340 403 334
----------------------------------------------------------------------------
Total natural gas 1,320 1,228 1,283 1,247
----------------------------------------------------------------------------
Total mboe/d (2) 423 432 425 432
----------------------------------------------------------------------------
Prices (3)
Oil and liquids (C$/bbl)
North America 64.24 51.78 54.96 85.52
UK 78.78 58.10 68.36 98.35
Scandinavia 77.61 59.08 69.73 99.23
Southeast Asia 84.26 36.64 71.17 97.63
Other 100.59 53.50 74.03 102.51
----------------------------------------------------------------------------
Total oil and liquids 79.18 53.36 67.36 96.43
----------------------------------------------------------------------------
Natural gas (C$/mcf)
North America 4.86 7.23 4.70 8.66
UK 4.41 10.62 4.73 9.78
Scandinavia 4.99 8.44 5.86 7.16
Southeast Asia 7.19 6.53 6.40 9.94
----------------------------------------------------------------------------
Total natural gas 5.61 7.17 5.29 9.01
----------------------------------------------------------------------------
Total (C$/boe) (2) 55.51 48.45 49.40 76.03
----------------------------------------------------------------------------
(1) Cash flow and cash flow per share are non-GAAP measures.
(2) Barrels of oil equivalent (boe) is calculated at a conversion rate of
six thousand cubic feet (mcf) of natural gas for one barrel of oil.
(3) Prices are before hedging.
Includes the results from continuing and discontinued operations.
Talisman Energy Inc.
Consolidated Balance Sheets
(unaudited)
December 31 (C$ million) 2009 2008
----------------------------------------------------------------------------
(restated)
Assets
Current
Cash and cash equivalents 1,690 91
Accounts receivable 1,293 2,419
Inventories 144 181
Prepaid expenses 9 17
Assets of discontinued operations 18 220
----------------------------------------------------------------------------
3,154 2,928
----------------------------------------------------------------------------
Other assets 290 235
Goodwill 1,238 1,248
Property, plant and equipment 18,914 18,540
Assets of discontinued operations 22 1,324
----------------------------------------------------------------------------
20,464 21,347
----------------------------------------------------------------------------
Total assets 23,618 24,275
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Current
Bank indebtedness 36 81
Accounts payable and accrued liabilities 2,130 1,875
Income and other taxes payable 357 468
Current portion of long-term debt 10 -
Future income taxes 68 300
Liabilities of discontinued operations - 94
----------------------------------------------------------------------------
2,601 2,818
----------------------------------------------------------------------------
Deferred credits 59 51
Asset retirement obligations 2,183 1,939
Other long-term obligations 168 173
Long-term debt 3,770 3,961
Future income taxes 3,720 4,007
Liabilities of discontinued operations 6 176
----------------------------------------------------------------------------
9,906 10,307
----------------------------------------------------------------------------
Shareholders' equity
Common shares, no par value
Authorized: unlimited
Issued and outstanding:
2009 - 1,015 million (2008 - 1,015 million) 2,374 2,372
Contributed surplus 153 84
Retained earnings 9,174 8,966
Accumulated other comprehensive loss (590) (272)
----------------------------------------------------------------------------
11,111 11,150
----------------------------------------------------------------------------
Total liabilities and shareholders' equity 23,618 24,275
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Prior period balances have been restated to reflect the financial position
of discontinued operations.
Talisman Energy Inc.
Consolidated Statements of Income and Loss
(unaudited)
Three months Year
ended ended
December 31 December 31
(C$ million) 2009 2008 2009 2008
----------------------------------------------------------------------------
(restated) (restated)
Revenue
Gross sales 2,180 2,120 7,528 11,275
Hedging loss - - - (28)
----------------------------------------------------------------------------
Gross sales, net of hedging 2,180 2,120 7,528 11,247
Less royalties 381 372 1,155 2,001
----------------------------------------------------------------------------
Net sales 1,799 1,748 6,373 9,246
Other 26 25 115 112
----------------------------------------------------------------------------
Total revenue 1,825 1,773 6,488 9,358
----------------------------------------------------------------------------
Expenses
Operating 498 524 1,997 1,967
Transportation 64 44 222 207
General and administrative 88 97 334 294
Depreciation, depletion and
amortization 677 1,186 2,674 2,890
Dry hole 204 220 584 492
Exploration 100 158 301 429
Interest on long-term debt 49 43 192 168
Stock-based compensation (recovery) 42 (36) 290 (73)
(Gain) loss on held-for-trading
financial instruments 142 (1,695) 412 (1,664)
Other, net 23 (49) 48 (179)
----------------------------------------------------------------------------
Total expenses 1,887 492 7,054 4,531
----------------------------------------------------------------------------
Income (loss) from continuing
operations before taxes (62) 1,281 (566) 4,827
----------------------------------------------------------------------------
Taxes
Current income tax 253 249 720 1,375
Future income tax (recovery) (174) (146) (686) 154
Petroleum revenue tax 49 16 108 176
----------------------------------------------------------------------------
128 119 142 1,705
----------------------------------------------------------------------------
Net income (loss) from continuing
operations (190) 1,162 (708) 3,122
----------------------------------------------------------------------------
Net income from discontinued operations 79 40 1,145 397
----------------------------------------------------------------------------
Net income (loss) (111) 1,202 437 3,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Per common share (C$):
Net income (loss) from continuing
operations (0.19) 1.14 (0.70) 3.07
Diluted net income (loss) from
continuing operations (0.19) 1.13 (0.70) 3.02
Net income from discontinued
operations 0.07 0.04 1.12 0.39
Diluted net income from discontinued
operations 0.07 0.04 1.12 0.38
Net income (loss) (0.11) 1.18 0.43 3.46
Diluted net income (loss) (0.11) 1.17 0.43 3.40
----------------------------------------------------------------------------
Average number of common shares
outstanding (millions) 1,015 1,015 1,015 1,017
Diluted number of common shares
outstanding (millions) 1,015 1,025 1,015 1,034
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Prior period balances have been restated to reflect the results of
discontinued operations.
Talisman Energy Inc.
Consolidated Statements of Cash Flows
(unaudited)
Three months ended Year ended
December 31 December 31
(C$ million) 2009 2008 2009 2008
----------------------------------------------------------------------------
(restated) (restated)
Operating
Net income (loss) from continuing
operations (190) 1,162 (708) 3,122
Items not involving cash 1,020 174 4,283 2,147
Exploration 100 158 301 429
----------------------------------------------------------------------------
930 1,494 3,876 5,698
Changes in non-cash working capital (297) 4 (362) (9)
----------------------------------------------------------------------------
Cash provided by continuing
operations 633 1,498 3,514 5,689
Cash provided by (used in)
discontinued operations (9) 71 85 465
----------------------------------------------------------------------------
Cash provided by operating activities 624 1,569 3,599 6,154
----------------------------------------------------------------------------
Investing
Capital expenditures
Exploration, development and other (1,436) (1,558) (4,080) (4,872)
Property acquisitions (32) 3 (310) (436)
Proceeds of resource property
dispositions 96 8 200 47
Changes in non-cash working capital 139 231 (18) 244
Discontinued operations, net of
capital expenditures 492 (78) 2,341 43
----------------------------------------------------------------------------
Cash used in investing activities (741) (1,394) (1,867) (4,974)
----------------------------------------------------------------------------
Financing
Long-term debt repaid - (739) (970) (3,869)
Long-term debt issued 12 551 1,261 2,425
Common shares purchased 1 - 1 1
Acquisition of common shares for
performance share plan - - - (68)
Common share dividends (114) (102) (229) (204)
Deferred credits and other (24) (4) (10) 8
Changes in non-cash working capital 3 (10) 4 (14)
----------------------------------------------------------------------------
Cash provided by (used in) financing
activities (122) (304) 57 (1,721)
----------------------------------------------------------------------------
Effect of translation on foreign
currency cash and cash equivalents (41) 8 (133) 32
----------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents (280) (121) 1,656 (509)
Cash and cash equivalents net of bank
indebtedness, beginning of period 1,948 133 12 521
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents net of bank
indebtedness, end of period 1,668 12 1,668 12
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents 1,690 91 1,690 91
Cash and cash equivalents reclassified
to discontinued operations 14 2 14 2
Bank indebtedness (36) (81) (36) (81)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents net of bank
indebtedness, end of period 1,668 12 1,668 12
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Prior period balances have been restated to reflect the cash flows of
discontinued operations.
Supplemental financial information
The following supplemental financial information has been
prepared to assist readers of the unaudited consolidated financial
information as at and for the three month period and year ended
December 31, 2009. This financial information does not constitute
interim financial statements as defined by Generally Accepted
Accounting Principles in that certain statements and disclosures
normally required to be included in interim financial statements
and the notes thereto have not been provided. This unaudited
consolidated financial information should be read in conjunction
with the audited annual Consolidated Financial Statements as at and
for the year ended December 31, 2008 and the most recently
completed unaudited interim Consolidated Financial Statements as at
and for the three and nine month periods ended September 30,
2009.
Commodity derivatives
Commodity price derivative contracts
The Company had the following commodity price derivative
contracts outstanding at December 31, 2009:
C$ million
----------------------------------------------------------------------------
Fixed price swaps Term mcf/d C$/mcf Fair value
ICE index Jan-Mar 2010 20,638 7.28 3
ICE index Apr-Sep 2010 20,638 5.98 -
ICE index Oct-Dec 2010 17,824 7.03 (2)
ICE index Jan-Mar 2011 17,824 7.03 (4)
ICE index Apr-Jun 2011 16,886 6.41 (3)
---------------
(6)
---------------
Floor/ceiling
Two-way collars Term bbls/d US$/bbl Fair value
----------------------------------------------------------------------------
Dated Brent oil index Jan-Dec 2010 28,000 52.57/80.14 (84)
Dated Brent oil index Jan-Dec 2010 25,000 71.72/90.00 (1)
WTI Jan-Dec 2010 22,000 50.20/60.87 (187)
---------------
(272)
---------------
Floor/ceiling
Two-way collars Term mcf/d C$/mcf Fair value
----------------------------------------------------------------------------
AECO index Jan-Jun 2010 94,820 5.82/7.17 8
AECO index Jan-Dec 2010 47,410 5.78/7.39 6
---------------
14
---------------
Floor/ceiling
Two-way collars Term mcf/d US$/mcf Fair value
----------------------------------------------------------------------------
NYMEX index Jul-Dec 2010 95,000 5.90/7.03 (1)
---------------
Physical commodity contracts
The Company had the following physical commodity contracts
outstanding at December 31, 2009:
Fixed price swaps Term mcf/d C$/mcf
----------------------------------------------------------------------------
AECO natural gas swaps Jan-Dec 2010 14,223 6.33
AECO natural gas collars Jan-Dec 2010 175,417 6.33/7.55
AECO natural gas swaps Jan 2010-Dec 2011 3,671 3.10
----------------------------------------------------------------------------
Supplemental cash flow information
Items not involving cash are as follows:
Three months ended Year ended
December 31 December 31
(C$ million) 2009 2008 2009 2008
----------------------------------------------------------------------------
Depreciation, depletion &
amortization 677 1,186 2,674 2,890
Dry hole 204 220 584 492
Net gain on asset disposals (22) (43) (37) (109)
Stock-based compensation expense
(recovery) 16 (40) 213 (284)
Future taxes and deferred PRT
(recovery) (157) (151) (645) 247
Unrealized (gains) losses on held
for trading financial instruments 238 (1,072) 1,390 (1,222)
Financial instruments contract
premium (5) (8) 11 46
Other 69 82 93 87
----------------------------------------------------------------------------
1,020 174 4,283 2,147
----------------------------------------------------------------------------
Segmented information
North America(1) UK
---------------------------------------------------------
(C$ million) 2009 2008 2007 2009 2008 2007
----------------------------------------------------------------------------
Revenue
----------------------------------------------------------------------------
Gross sales 1,911 3,636 2,574 2,188 3,458 2,606
Hedging gain (loss) - - 110 - (28) (6)
Royalties 246 631 462 5 13 4
----------------------------------------------------------------------------
Net sales 1,665 3,005 2,222 2,183 3,417 2,596
Other 93 84 76 19 25 18
----------------------------------------------------------------------------
Total revenue 1,758 3,089 2,298 2,202 3,442 2,614
----------------------------------------------------------------------------
Segmented expenses
----------------------------------------------------------------------------
Operating 539 534 446 878 942 872
Transportation 59 68 65 46 49 51
DD&A 1,062 1,052 967 781 1,144 605
Dry hole 179 269 359 30 93 104
Exploration 84 165 148 18 54 40
Other (19) (86) (48) 72 23 25
----------------------------------------------------------------------------
Total segmented
expenses 1,904 2,002 1,937 1,825 2,305 1,697
----------------------------------------------------------------------------
Segmented income
(loss) before
taxes (146) 1,087 361 377 1,137 917
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative
Interest on
long-term
debt
Stock-based
compensation
Currency
translation
(Gain) loss on
held-for-trading
financial
instruments
----------------------------------------------------------------------------
Total non-segmented
expenses
----------------------------------------------------------------------------
Income (loss) from
continuing
operations before
taxes
----------------------------------------------------------------------------
Capital expenditure
Exploration 1,312 1,427 849 149 188 246
Development 492 847 764 531 545 959
Midstream 26 41 80 - - -
----------------------------------------------------------------------------
Exploration and
development 1,830 2,315 1,693 680 733 1,205
----------------------------------------------------------------------------
Property
acquisitions
Proceeds on
dispositions
Other non-segmented
----------------------------------------------------------------------------
Net capital
expenditures(4)
----------------------------------------------------------------------------
Property, plant and
equipment 8,638 8,259 7,023 4,549 4,738 5,683
Goodwill 211 211 213 289 306 335
Other 634 833 984 386 253 301
Discontinued
operations - 996 1,012 - 165 161
----------------------------------------------------------------------------
Segmented assets 9,483 10,299 9,232 5,224 5,462 6,480
Non segmented
assets
----------------------------------------------------------------------------
Total assets
----------------------------------------------------------------------------
Scandinavia
---------------------------
(C$ million) 2009 2008 2007
----------------------------------------------------------------------------
Revenue
----------------------------------------------------------------------------
Gross sales 986 1,192 827
Hedging gain (loss) - - -
Royalties - - -
----------------------------------------------------------------------------
Net sales 986 1,192 827
Other 3 3 22
----------------------------------------------------------------------------
Total revenue 989 1,195 849
----------------------------------------------------------------------------
Segmented expenses
----------------------------------------------------------------------------
Operating 285 276 279
Transportation 54 35 34
DD&A 406 416 264
Dry hole 69 90 83
Exploration 22 50 34
Other (5) 15 (9)
----------------------------------------------------------------------------
Total segmented
expenses 831 882 685
----------------------------------------------------------------------------
Segmented income
(loss) before taxes 158 313 164
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative
Interest on
long-term debt
Stock-based
compensation
Currency
translation
(Gain) loss on
held-for-trading
financial
instruments
----------------------------------------------------------------------------
Total non-segmented
expenses
----------------------------------------------------------------------------
Income (loss) from
continuing
operations before
taxes
----------------------------------------------------------------------------
Capital expenditure
Exploration 157 165 148
Development 528 660 436
Midstream - - -
----------------------------------------------------------------------------
Exploration and
development 685 825 584
----------------------------------------------------------------------------
Property
acquisitions
Proceeds on
dispositions
Other non-segmented
----------------------------------------------------------------------------
Net capital
expenditures(4)
----------------------------------------------------------------------------
Property, plant and
equipment 2,040 1,745 1,536
Goodwill 628 602 639
Other 226 154 172
Discontinued
operations - 93 301
----------------------------------------------------------------------------
Segmented assets 2,894 2,594 2,648
Non segmented
assets
----------------------------------------------------------------------------
Total assets
----------------------------------------------------------------------------
1. North America 2009 2008 2007
----------------------------------------------------------------------------
Canada 1,637 2,862 2,088
US 121 227 210
----------------------------------------------------------------------------
Total revenue 1,758 3,089 2,298
----------------------------------------------------------------------------
Canada 7,476 7,458 6,633
US 1,162 801 390
----------------------------------------------------------------------------
Property, plant and equipment 8,638 8,259 7,023
----------------------------------------------------------------------------
4 Excluding corporate acquisitions
Southeast Asia(2) Other(3)
---------------------------- ---------------------------
(C$ million) 2009 2008 2007 2009 2008 2007
----------------------------------------------------------------------------
Revenue
----------------------------------------------------------------------------
Gross sales 1,995 2,479 2,096 448 510 398
Hedging gain (loss) - - - - - -
Royalties 675 1,066 843 229 291 178
----------------------------------------------------------------------------
Net sales 1,320 1,413 1,253 219 219 220
Other - - 2 - - -
----------------------------------------------------------------------------
Total revenue 1,320 1,413 1,255 219 219 220
----------------------------------------------------------------------------
Segmented expenses
----------------------------------------------------------------------------
Operating 255 195 169 40 20 26
Transportation 55 48 47 8 7 7
DD&A 382 254 248 43 24 23
Dry hole 253 13 48 53 27 1
Exploration 75 84 22 102 76 70
Other 9 29 6 7 5 9
----------------------------------------------------------------------------
Total segmented
expenses 1,029 623 540 253 159 136
----------------------------------------------------------------------------
Segmented income
(loss) before taxes 291 790 715 (34) 60 84
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative
Interest on
long-term debt
Stock-based
compensation
Currency
translation
(Gain) loss on
held-for-trading
financial
instruments
----------------------------------------------------------------------------
Total non-segmented
expenses
----------------------------------------------------------------------------
Income (loss) from
continuing
operations before
taxes
----------------------------------------------------------------------------
Capital expenditure
Exploration 233 318 172 217 149 144
Development 444 459 340 46 8 24
Midstream - - - - - -
----------------------------------------------------------------------------
Exploration and
development 677 777 512 263 157 168
----------------------------------------------------------------------------
Property
acquisitions
Proceeds on
dispositions
Other non-segmented
----------------------------------------------------------------------------
Net capital
expenditures(4)
----------------------------------------------------------------------------
Property, plant and
equipment 2,864 2,984 2,030 823 814 227
Goodwill 110 129 104 - - -
Other 427 304 293 156 128 39
Discontinued
operations - - - 40 290 284
----------------------------------------------------------------------------
Segmented assets 3,401 3,417 2,427 1,019 1,232 550
Non segmented
assets - - - - - -
----------------------------------------------------------------------------
Total assets
----------------------------------------------------------------------------
Total
(C$ million) 2009 2008 2007
----------------------------------------------------------------------------
Revenue
----------------------------------------------------------------------------
Gross sales 7,528 11,275 8,501
Hedging gain (loss) - (28) 104
Royalties 1,155 2,001 1,487
----------------------------------------------------------------------------
Net sales 6,373 9,246 7,118
Other 115 112 118
----------------------------------------------------------------------------
Total revenue 6,488 9,358 7,236
----------------------------------------------------------------------------
Segmented expenses
----------------------------------------------------------------------------
Operating 1,997 1,967 1,792
Transportation 222 207 204
DD&A 2,674 2,890 2,107
Dry hole 584 492 595
Exploration 301 429 314
Other 64 (14) (17)
----------------------------------------------------------------------------
Total segmented
expenses 5,842 5,971 4,995
----------------------------------------------------------------------------
Segmented income
(loss) before taxes 646 3,387 2,241
----------------------------------------------------------------------------
Non-segmented
expenses
General and
administrative 334 294 223
Interest on
long-term debt 192 168 207
Stock-based
compensation 290 (73) (15)
Currency
translation (16) (165) 53
(Gain) loss on
held-for-trading
financial
instruments 412 (1,664) 25
----------------------------------------------------------------------------
Total non-segmented
expenses 1,212 (1,440) 493
----------------------------------------------------------------------------
Income (loss) from
continuing
operations before
taxes (566) 4,827 1,748
----------------------------------------------------------------------------
Capital expenditure
Exploration 2,068 2,247 1,559
Development 2,041 2,519 2,523
Midstream 26 41 80
----------------------------------------------------------------------------
Exploration and
development 4,135 4,807 4,162
----------------------------------------------------------------------------
Property
acquisitions 438 452 317
Proceeds on
dispositions (321) (100) (45)
Other non-segmented 47 64 41
----------------------------------------------------------------------------
Net capital
expenditures(4) 4,299 5,223 4,475
----------------------------------------------------------------------------
Property, plant and
equipment 18,914 18,540 16,499
Goodwill 1,238 1,248 1,291
Other 1,829 1,672 1,789
Discontinued
operations 40 1,544 1,758
----------------------------------------------------------------------------
Segmented assets 22,021 23,004 21,337
Non segmented
assets 1,597 1,271 83
----------------------------------------------------------------------------
Total assets 23,618 24,275 21,420
----------------------------------------------------------------------------
2. Southeast Asia 2009 2008 2007
----------------------------------------------------------------------------
Indonesia 693 863 591
Malaysia 400 424 445
Vietnam 101 33 56
Australia 126 93 163
----------------------------------------------------------------------------
Total revenue 1,320 1,413 1,255
----------------------------------------------------------------------------
Indonesia 906 990 820
Malaysia 1,171 1,291 899
Vietnam 241 456 147
Papua New Guinea 337 - -
Australia 209 247 164
----------------------------------------------------------------------------
Property, plant and equipment 2,864 2,984 2,030
----------------------------------------------------------------------------
3. Other
----------------------------------------------------------------------------
Algeria 219 219 220
----------------------------------------------------------------------------
Total revenue 219 219 220
----------------------------------------------------------------------------
Algeria 193 221 193
Other 630 593 34
----------------------------------------------------------------------------
Property, plant and equipment 823 814 227
----------------------------------------------------------------------------
4 Excluding corporate acquisitions
Continuity of Gross Proved Reserves
United
Canada(1) States UK Scandinavia
----------------------------------------------------------------------------
Oil and liquids (mmbbls)
Total proved
Proved reserves at December 31,
2006 166.6 - 380.8 61.9
Discoveries, additions and
extensions 7.2 - 6.4 11.2
Purchase of reserves - - - -
Sale of reserves (13.4) - (4.6) -
Net revisions and transfers 8.2 - 41.8 5.4
2007 Production (15.8) - (37.2) (11.2)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 152.8 - 387.2 67.3
Discoveries, additions and
extensions 13.7 - 15.0 8.3
Purchase of reserves 0.3 - - -
Sale of reserves (0.3) - (17.5) (1.7)
Net revisions and transfers 2.6 - (133.7) (5.3)
2008 Production (14.8) - (34.3) (12.0)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 154.3 - 216.7 56.6
Discoveries, additions and
extensions 4.8 - 5.2 1.1
Purchase of reserves 0.2 - - -
Sale of reserves (45.7) - (0.2) (4.0)
Net revisions and transfers - - 77.0 14.5
2009 Production (12.6) - (31.2) (12.3)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 101.0 - 267.5 55.9
----------------------------------------------------------------------------
Proved developed
December 31, 2006 156.4 - 255.7 25.7
December 31, 2007 146.2 - 344.5 25.6
December 31, 2008 143.4 - 173.3 24.8
December 31, 2009 92.6 - 197.1 26.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural gas (bcf)
Total proved
Proved reserves at December 31,
2006 2,661.3 143.8 182.8 76.3
Discoveries, additions and
extensions 336.5 20.3 4.3 9.8
Purchase of reserves 4.6 - - -
Sale of reserves (154.5) - (56.8) -
Net revisions and transfers 6.2 (6.4) (4.8) (2.1)
2007 Production (288.4) (31.2) (25.3) (5.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 2,565.7 126.5 100.2 78.9
Discoveries, additions and
extensions 308.2 33.9 12.4 12.1
Purchase of reserves 15.3 2.8 - -
Sale of reserves (65.3) - - -
Net revisions and transfers (30.3) 1.4 (3.2) 17.8
2008 Production (286.6) (26.7) (13.8) (6.9)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 2,507.0 137.9 95.6 101.9
Discoveries, additions and
extensions 201.2 544.5 - (0.5)
Purchase of reserves 15.9 - - -
Sale of reserves (137.6) (1.5) (67.0) -
Net revisions and transfers (75.3) 0.1 2.9 12.7
2009 Production (262.7) (30.3) (7.0) (21.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 2,248.5 650.7 24.5 93.0
----------------------------------------------------------------------------
Proved developed
December 31, 2006 2,162.5 132.5 126.4 8.6
December 31, 2007 2,125.6 111.4 86.7 7.0
December 31, 2008 2,066.8 117.9 65.5 99.0
December 31, 2009 1,840.9 197.9 22.4 91.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
Southeast
Indonesia Asia Other Total
----------------------------------------------------------------------------
Oil and liquids (mmbbls)
Total proved
Proved reserves at December 31,
2006 36.0 62.3 58.9 766.5
Discoveries, additions and
extensions 2.2 0.5 1.8 29.3
Purchase of reserves 1.1 - - 1.1
Sale of reserves - - - (18.0)
Net revisions and transfers 0.5 2.7 (0.4) 58.2
2007 Production (4.1) (12.0) (7.5) (87.8)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 35.7 53.5 52.8 749.3
Discoveries, additions and
extensions 0.4 0.2 (0.7) 36.9
Purchase of reserves - - - 0.3
Sale of reserves - - - (19.5)
Net revisions and transfers 0.6 (5.6) 0.6 (140.8)
2008 Production (4.3) (8.7) (7.6) (81.7)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 32.4 39.4 45.1 544.5
Discoveries, additions and
extensions (1.7) 7.4 12.2 29.0
Purchase of reserves 1.0 - - 1.2
Sale of reserves - - (3.8) (53.7)
Net revisions and transfers 1.1 3.8 (8.6) 87.8
2009 Production (4.2) (10.7) (5.9) (76.9)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 28.6 39.9 39.0 531.9
----------------------------------------------------------------------------
Proved developed
December 31, 2006 30.4 39.8 43.3 551.3
December 31, 2007 28.2 31.3 48.2 624.0
December 31, 2008 26.0 24.9 35.2 427.6
December 31, 2009 23.2 31.2 23.7 393.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural gas (bcf)
Total proved
Proved reserves at December 31,
2006 1,702.5 406.3 229.9 5,402.9
Discoveries, additions and
extensions 118.7 (3.8) (10.1) 475.7
Purchase of reserves 247.2 - - 251.8
Sale of reserves - - - (211.3)
Net revisions and transfers (3.2) 6.1 4.4 0.2
2007 Production (83.3) (21.6) (0.2) (455.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 1,981.9 387.0 224.0 5,464.2
Discoveries, additions and
extensions 1.3 27.0 0.4 395.3
Purchase of reserves - - - 18.1
Sale of reserves - - - (65.3)
Net revisions and transfers - (2.5) (0.8) (17.6)
2008 Production (97.2) (24.9) (0.2) (456.3)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 1,886.0 386.6 223.4 5,338.4
Discoveries, additions and
extensions 88.6 27.9 - 861.7
Purchase of reserves 8.7 - - 24.6
Sale of reserves - - (220.5) (426.6)
Net revisions and transfers 14.8 (11.1) (1.0) (56.9)
2009 Production (120.6) (26.7) (0.1) (468.5)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 1,877.5 376.7 1.8 5,272.7
----------------------------------------------------------------------------
Proved developed
December 31, 2006 1,255.9 51.9 0.5 3,738.3
December 31, 2007 1,197.6 58.2 1.1 3,587.6
December 31, 2008 1,348.9 199.0 1.2 3,898.3
December 31, 2009 1,231.6 320.8 0.8 3,705.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
(1) Canadian gross proved reserves exclude synthetic crude oil reserves:
2006 - 38.9 mmbbls; 2007 - 0 mmbbls (asset sold)
Continuity of Net Proved Reserves
United
Canada(1) States UK Scandinavia
----------------------------------------------------------------------------
Oil and liquids (mmbbls)
Total proved
Proved reserves at December 31,
2006 138.3 - 377.8 61.8
Discoveries, additions and
extensions 5.9 - 6.4 11.2
Purchase of reserves - - - -
Sale of reserves (9.8) - (4.1) -
Net revisions and transfers 2.0 - 42.1 5.3
2007 Production (12.5) - (36.9) (11.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 123.9 - 385.3 67.2
Discoveries, additions and
extensions 12.1 - 15.0 8.3
Purchase of reserves 0.3 - - -
Sale of reserves (0.3) - (17.5) (1.6)
Net revisions and transfers 7.4 - (133.2) (5.3)
2008 Production (11.9) - (34.2) (12.0)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 131.5 - 215.4 56.6
Discoveries, additions and
extensions 4.0 - 5.2 1.1
Purchase of reserves 0.1 - - -
Sale of reserves (39.0) - (0.2) (4.0)
Net revisions and transfers 2.7 - 76.8 14.5
2009 Production (9.9) - (31.1) (12.3)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 89.4 - 266.1 55.9
----------------------------------------------------------------------------
Proved developed
December 31, 2006 130.1 - 252.9 25.6
December 31, 2007 118.9 - 342.6 25.6
December 31, 2008 122.0 - 172.0 24.8
December 31, 2009 82.1 - 196.0 26.1
----------------------------------------------------------------------------
Natural gas (bcf)
Total proved
Proved reserves at December 31,
2006 2,153.8 123.8 178.1 76.3
Discoveries, additions and
extensions 254.5 17.7 4.3 9.8
Purchase of reserves 3.3 - - -
Sale of reserves (117.9) - (53.0) -
Net revisions and transfers 29.8 (6.0) (5.3) (2.1)
2007 Production (236.4) (26.5) (23.9) (5.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 2,087.1 109.0 100.2 78.9
Discoveries, additions and
extensions 249.7 29.4 12.4 12.1
Purchase of reserves 11.9 2.4 - -
Sale of reserves (55.2) - - -
Net revisions and transfers 113.3 1.3 (3.2) 17.8
2008 Production (237.6) (22.9) (13.8) (6.9)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 2,169.2 119.2 95.6 101.9
Discoveries, additions and
extensions 185.6 474.6 - (0.5)
Purchase of reserves 14.2 - - -
Sale of reserves (115.8) (1.4) (67.0) -
Net revisions and transfers 28.2 - 2.9 12.7
2009 Production (238.4) (26.2) (7.0) (21.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 2,043.0 566.2 24.5 93.0
----------------------------------------------------------------------------
Proved developed
December 31, 2006 1,747.1 113.8 123.2 8.6
December 31, 2007 1,725.0 95.7 86.7 7.0
December 31, 2008 1,785.8 101.8 65.5 99.0
December 31, 2009 1,663.5 171.1 22.4 91.2
----------------------------------------------------------------------------
Other
Southeast
Indonesia Asia Other Total
----------------------------------------------------------------------------
Oil and liquids (mmbbls)
Total proved
Proved reserves at December 31,
2006 14.3 39.6 33.4 665.2
Discoveries, additions and
extensions 0.7 0.2 1.1 25.5
Purchase of reserves 1.0 - - 1.0
Sale of reserves - - - (13.9)
Net revisions and transfers (0.6) (2.8) (1.8) 44.2
2007 Production (1.8) (6.9) (5.1) (74.3)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 13.6 30.1 27.6 647.7
Discoveries, additions and
extensions - (0.3) (0.3) 34.8
Purchase of reserves - - - 0.3
Sale of reserves - - - (19.4)
Net revisions and transfers 4.2 2.0 3.1 (121.8)
2008 Production (1.7) (4.7) (4.1) (68.6)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 16.1 27.1 26.3 473.0
Discoveries, additions and
extensions (0.5) 5.3 6.5 21.6
Purchase of reserves 0.7 - - 0.8
Sale of reserves - - (3.7) (46.9)
Net revisions and transfers (1.8) 3.8 (4.7) 91.3
2009 Production (1.8) (7.6) (3.4) (66.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 12.7 28.6 21.0 473.7
----------------------------------------------------------------------------
Proved developed
December 31, 2006 12.2 24.7 25.8 471.3
December 31, 2007 10.7 18.9 25.4 542.1
December 31, 2008 13.5 17.7 20.2 370.2
December 31, 2009 11.0 21.2 13.0 349.4
----------------------------------------------------------------------------
Natural gas (bcf)
Total proved
Proved reserves at December 31,
2006 1,174.2 276.5 229.3 4,212.0
Discoveries, additions and
extensions 78.3 (1.6) (10.2) 352.8
Purchase of reserves 192.2 - - 195.5
Sale of reserves - - - (170.9)
Net revisions and transfers (28.9) (13.1) 4.3 (21.3)
2007 Production (56.8) (16.3) (0.1) (365.1)
----------------------------------------------------------------------------
Proved reserves at December 31,
2007 1,359.0 245.5 223.3 4,203.0
Discoveries, additions and
extensions (30.3) 20.2 0.4 293.9
Purchase of reserves - - - 14.3
Sale of reserves - - - (55.2)
Net revisions and transfers 143.0 42.8 (0.7) 314.3
2008 Production (64.0) (18.8) (0.2) (364.2)
----------------------------------------------------------------------------
Proved reserves at December 31,
2008 1,407.7 289.7 222.8 4,406.1
Discoveries, additions and
extensions 62.8 25.3 - 747.8
Purchase of reserves 7.5 - - 21.7
Sale of reserves - (220.0) (404.2)
Net revisions and transfers (19.5) (33.3) (1.0) (10.0)
2009 Production (84.4) (20.3) (0.1) (397.5)
----------------------------------------------------------------------------
Proved reserves at December 31,
2009 1,374.1 261.4 1.7 4,363.9
----------------------------------------------------------------------------
Proved developed
December 31, 2006 856.8 38.7 0.5 2,888.7
December 31, 2007 811.1 44.4 1.0 2,770.9
December 31, 2008 1,022.2 149.0 1.2 3,224.5
December 31, 2009 915.2 225.5 0.8 3,089.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1 Canadian net proved reserves exclude synthetic crude oil reserves:
2006 - 32 mmbbls; 2007 - 0 (asset sold)
Reserves Estimates
Summary of Oil and Gas Reserves as of Fiscal Year End Based on
Average Fiscal Year Prices
The following table sets forth Talisman's estimates of its
proved developed, proved undeveloped, total proved, probable
developed, probable undeveloped and total probable reserves as at
December 31, 2009. The reserves estimates included in this table
were prepared using the standards of the US Securities and Exchange
Commission ("SEC"), which requires that proved reserves be
estimated using existing economic conditions.
Effective January 1, 2010, the SEC amended its oil and gas
reporting requirements. Under the amended requirements, the price
used for calculating reserves has been changed from a year-end
single day price to an average price during the 12-month period for
the most recent fiscal year, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within
the period unless the prices are defined by contractual obligations
(excluding escalations based on future conditions). The estimates
in the following table have been prepared on that basis.
Proved Proved Total
Developed(1,2) Undeveloped(1,3) Proved(1)
------------------------------------------------------
Gross(7) Net(8) Gross(7) Net(8) Gross(7) Net(8)
----------------------------------------------------------------------------
Oil and
Liquids
(mmbbls)
------------------------------------------------------
North America
------------------------------------------------------
Canada 92.6 82.1 8.4 7.3 101.0 89.4
------------------------------------------------------
US - - - - - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
UK
------------------------------------------------------
UK 197.1 196.0 70.4 70.1 267.5 266.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Scandinavia
------------------------------------------------------
Norway 26.1 26.1 29.8 29.8 55.9 55.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Southeast Asia
------------------------------------------------------
Indonesia(9) 23.2 11.0 5.4 1.7 28.6 12.7
------------------------------------------------------
Malaysia 23.7 14.0 3.6 2.5 27.3 16.5
------------------------------------------------------
Australia 6.0 5.9 5.1 4.9 11.1 10.8
------------------------------------------------------
Vietnam 1.5 1.3 - - 1.5 1.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
------------------------------------------------------
Algeria 23.2 12.6 15.1 7.9 38.3 20.5
------------------------------------------------------
Tunisia 0.5 0.4 0.2 0.1 0.7 0.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 393.9 349.4 138.0 124.3 531.9 473.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural Gas
(bcf)
North America
------------------------------------------------------
Canada 1840.9 1663.5 407.6 379.5 2248.5 2043.0
------------------------------------------------------
US 197.9 171.1 452.8 395.1 650.7 566.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
UK
------------------------------------------------------
UK 22.4 22.4 2.1 2.1 24.5 24.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Scandinavia
------------------------------------------------------
Norway 91.2 91.2 1.8 1.8 93.0 93.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Southeast Asia
------------------------------------------------------
Indonesia(9) 1231.6 915.2 645.9 458.9 1877.5 1374.1
------------------------------------------------------
Malaysia 320.8 225.5 55.9 35.9 376.7 261.4
------------------------------------------------------
Australia - - - - - -
------------------------------------------------------
Vietnam - - - - - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
------------------------------------------------------
Algeria - - - - - -
------------------------------------------------------
Tunisia 0.8 0.8 1.0 0.9 1.8 1.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 3705.6 3089.7 1567.1 1274.2 5272.7 4363.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Probable Probable Total
Developed(4,5) Undeveloped(4,6) Probable(4)
Gross(7) Net(8) Gross(7) Net(8) Gross(7) Net(8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Oil and
Liquids
(mmbbls)
North America
------------------------------------------------------
Canada 20.3 17.4 8.3 6.6 28.6 24.0
------------------------------------------------------
US - - - - - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
UK
------------------------------------------------------
UK 59.4 59.1 112.4 112.4 171.8 171.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Scandinavia
Norway 22.7 22.7 42.3 42.3 65.0 65.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Southeast Asia
------------------------------------------------------
Indonesia(9) 0.5 0.2 11.6 5.1 12.1 5.3
------------------------------------------------------
Malaysia 23.8 11.9 9.5 3.9 33.3 15.8
------------------------------------------------------
Australia 2.9 2.8 4.3 4.1 7.2 6.9
------------------------------------------------------
Vietnam 0.3 0.3 28.5 23.2 28.8 23.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
------------------------------------------------------
Algeria 6.2 3.2 6.1 3.6 12.3 6.8
------------------------------------------------------
Tunisia 0.2 0.1 - - 0.2 0.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 136.3 117.7 223.0 201.2 359.3 318.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural Gas
(bcf)
North America
------------------------------------------------------
Canada 603.7 546.4 648.2 593.9 1251.9 1140.3
------------------------------------------------------
US 7.7 6.7 524.5 453.6 532.2 460.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
UK
------------------------------------------------------
UK 20.2 20.2 168.8 168.8 189.0 189.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Scandinavia
------------------------------------------------------
Norway 57.0 57.0 8.0 8.0 65.0 65.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Southeast Asia
------------------------------------------------------
Indonesia(9) 3.7 2.3 714.3 500.0 718.0 502.3
------------------------------------------------------
Malaysia 154.5 84.1 97.8 63.9 252.3 148.0
------------------------------------------------------
Australia - - - - - -
------------------------------------------------------
Vietnam - - 23.1 23.1 23.1 23.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
Algeria - - - - - -
Tunisia 0.7 0.6 0.1 0.1 0.8 0.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 847.5 717.3 2184.8 1811.4 3032.3 2528.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. "Proved" reserves are those quantities of oil and gas, which, by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible - from a given date
forward, from known reservoirs and under existing economic conditions,
operating methods and government regulations, prior to the time at
which contracts providing the right to operate expire, unless evidence
indicates that renewal is reasonably certain, regardless of whether
deterministic or probabilistic methods are used for estimation.
2. "Proved Developed" reserves are those reserves that can be expected to
be recovered through existing wells with existing equipment and
operating methods or in which the cost of the required equipment is
relatively minor compared to the cost of a new well. Additional oil and
gas expected to be obtained through installed extraction equipment and
infrastructure operational at the time of the reserves estimate are
included as proved developed reserves.
3. "Proved Undeveloped" reserves are those reserves that are expected to
be recovered from new wells on undrilled acreage, or from existing
wells for which a relatively major expenditure is required for
recompletion. Inclusion of reserves on undrilled acreage is limited to
those directly offsetting development spacing areas that are reasonably
certain of production when drilled, unless evidence using reliable
technology exists that establishes reasonable certainty of economic
producibility at greater distances.
4. "Probable" reserves are those additional reserves that are less certain
to be recovered than proved reserves but which, together with proved
reserves, are as likely as not to be recovered. Probable reserves can
be assigned to areas that are structurally higher than the proved area
if these areas are in communication with the proved reservoir. Includes
reserves assigned to areas of a reservoir adjacent to proved reserves
where data control or interpreted reservoir continuity of structure or
productivity does not meet the reasonable certainty criterion.
5. "Probable Developed" reserves are those reserves that are less certain
to be recovered through existing wells with existing equipment and
operating methods or in which the cost of the required equipment is
relatively minor compared to the cost of a new well. Additional oil and
gas expected to be obtained through installed extraction equipment and
infrastructure operational at the time of the reserves estimate are
included as proved developed reserves.
6. "Probable Undeveloped" reserves are those reserves that are less
certain to be recovered from new wells on undrilled acreage, or from
existing wells for which a relatively major expenditure is required for
recompletion.
7 "Gross" reserves refer to the sum of (i) working interest reserves
before deduction of royalty burdens payable, and (ii) royalty interest
reserves. The Canadian Oil and Gas Evaluation Handbook ("COGEH") refers
to this sum of reserves as "Company interest reserves". Royalty
interest reserves for Canada were approximately 1.3 mmboe (proved) and
0.3 mmboe (probable) as at December 31, 2009. The inclusion of royalty
interest volumes in gross reserves does not conform to COGEH standards
applicable under NI 51-101.
8. "Net" reserves are the remaining reserves of Talisman, after deduction
of estimated royalty burdens and including royalty interests in the
amount set out in note 7 above.
9. Interests of various governments, other than working interests or
income taxes, are accounted for as royalties. Royalties are reflected
in "net" reserves using effective rates over the life of the contract.
Contacts: Talisman Energy Inc. - Media and General Inquiries:
David Mann Vice President, Corporate & Investor Communications
(403) 237-1196 (403) 237-1210 (FAX) tlm@talisman-energy.com
Talisman Energy Inc. - Shareholder and Investor Inquiries:
Christopher J. LeGallais Vice President, Investor Relations (403)
237-1957 (403) 237-1210 (FAX) tlm@talisman-energy.com
www.talisman-energy.com
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