Talisman Energy Inc. (TSX:TLM) (NYSE:TLM) has announced resumption
of production at its Rev facility in Norway. Rev, which is a subsea
tieback to the third party operated Armada platform had mechanical
issues associated with the maintenance of the gas export line from
the host platform.
Talisman's Claymore platform in the UK is in preparation to
start production following a planned turnaround which has been
extended to complete remediation work resulting from a prohibition
notice from the UK Health and Safety Executive (HSE). The platform
is anticipated to restart by the end of October. Talisman is also
undertaking safety related upgrades at its UK Tartan platform. To
accommodate this work, it is expected that Tartan will be shut down
over the entire fourth quarter.
None of these repairs reflect substantive issues with respect to
the integrity of the platforms, but are important for ongoing safe
operations. The cumulative impact of these one-time, unplanned
events will be to reduce Talisman's North Sea production by
approximately 13,000 boe/d during the third quarter and 7,000 boe/d
during the fourth quarter.
In addition, weather related issues during breakup in western
Canada, and slower than anticipated progress on shale ramp ups,
resulted in the loss of an additional 7,000 boe/d during the third
quarter in North America.
The combined volume impact of North America and the North Sea
was approximately 20,000 boe/d during the third quarter, 5,000
boe/d annualized. As a result, the company currently expects third
quarter production to average approximately 400,000 boe/d. North
Sea volumes are expected to average 83,000 boe/d in the third
quarter, increasing to approximately 100,000 boe/d in the fourth
quarter. Lower volumes in the third quarter also reflect planned
maintenance activities during the period.
With strong growth in shale production, the startups at Rev and
Claymore, and delivery of the Kitan project in Australia, the
company expects production to increase substantially in the fourth
quarter. However, these unplanned events are expected to result in
2011 production averaging around 425,000 boe/d. Excluding the
acquisition of the Colombia properties, this represents about 6%
underlying annual growth over 2010 levels.
"In line with our priority of safe operations, we are conducting
extended maintenance work on our Tartan platform in the North Sea."
said John A. Manzoni, President & CEO. "While we have seen a
number of successes across the portfolio in 2011, for instance the
strengthening of our shale portfolio in the Eagle Ford and Duvernay
plays, strong growth from the Marcellus, and continuing exploration
success in Colombia, the production misses have been disappointing,
and reflect poor delivery and execution in a few areas of our
portfolio.
"In light of this, as we formulate our plans for 2012, we will
reflect increased focus in both our exploration and operating
areas, and strong capital discipline, while still delivering
underlying production growth. Talisman's portfolio and capital
investment plans will be finalized over the last quarter of this
year and outlined as usual in early January."
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
Hwww.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: timing for the
recommencement of production from the Claymore platform; the
shutdown of the Tartan platform and associated timing; the expected
impact of various operational events on North Sea production for
the third and fourth quarters of 2011; expected third quarter 2011
production for the company; expected third and fourth quarter
production for the North Sea; the expected impact of various events
on North America and North Sea third quarter and annualized
production; expected recovery of production rates in fourth quarter
2011; expected annual average production for 2011 and underlying
annual growth; areas of management focus and capital discipline for
2012; and the timing of the announcement of portfolio and capital
investment plans in 2012.
The forward-looking information contained herein assumes a 2011
average WTI oil price of approximately US$95/bbl, a 2011 average
Brent oil price of US$105, a 2011 NYMEX natural gas price of
approximately US$4/mmbtu and 2011 cash exploration and development
capital spending of $4.5 billion. 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; 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; health, safety and
environmental risks; 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; and the possibility that government policies
or laws may change or governmental approvals may be delayed or
withheld.
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.
Oil and Gas Information
Unless otherwise stated, production volumes in this news release
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. 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.
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.comwww.talisman-energy.com Talisman Energy
Inc. - Shareholder and Investor Inquiries Anil Aggarwala Manager,
Investor Relations (403) 237-1145 (403) 237-1902
(FAX)tlm@talisman-energy.comwww.talisman-energy.com
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