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Talisman to spend $8M in Alaska in ’09 Spending focused on finding prospects in NPR-A, announcement follows major seismic shoot in 2008, no plans to drill this year Eric Lidji Petroleum News
Despite a decision not to drill until at least 2011, Talisman Energy Inc. plans to spend $8 million in Alaska this year “on identifying prospects and leads,” part of a $660 million exploration program, according to a U.S. Securities and Exchange Commission filing.
The large Canadian-based independent, which operates in Alaska through its subsidiary FEX L.P., considers Alaska to be among a group of key exploration areas listed as “basins that have the potential to create future core areas that can renew the company.”
Other areas of future exploration are the Barents Sea in Norway, Peru and Columbia, offshore Indonesia, Vietnam and the Kurdistan region of Iraq. The company considers its “existing core areas” to be the United Kingdom, the North Sea in Norway and Malaysia.
Those two groups come from a companywide strategy review unveiled in May 2008.
FEX holds more than 1 million net acres in the National Petroleum Reserve-Alaska, most west of Teshekpuk Lake, making the company one of the largest leaseholders in the state.
Talisman’s $660 million exploration program for 2009, which includes up to 24 wells, is part of a $4 billion capital program, cut from $5.8 billion in response to falling oil prices.
Talisman crafted the 2009 budget on the assumption of oil prices around $40 per barrel and natural gas prices around $5 per million British thermal units, President and CEO John Manzoni said during a conference call with investors back in January.
Manzoni called the budget a “flexible approach to spending,” allowing the company to either spend more or “dial back” if oil and gas prices are higher or lower than projected.
No drilling until 2011 Talisman’s Alaska drilling venture is promising, but also very expensive.
The five exploration wells FEX has drilled in the NPR-A are among the most remote in Alaska, some more than 100 miles beyond the existing North Slope infrastructure grid.
FEX put its exploration program on hold in 2007 while it considered where to drill next.
FEX spent $25 million last year shooting 3-D seismic near Smith Bay, northwest of Teshekpuk Lake. Speaking at an industry conference in Anchorage in February 2009, John ‘t Hart, then-executive vice president of global exploration for Talisman, said the company needed time to process the information gathered from that seismic shoot.
“As a result we won’t expect to be drilling either in 2009 or in 2010,” ‘t Hart said.
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