Talisman Energy expects production increase, profits down from last year

Don Whiteley

Petroleum News Contributing Writer

On the road to recovery after finally ditching its controversial Sudanese oil and gas interests, Talisman Energy Corp. said in its third quarter earnings report that it expects annual oil and gas production this year to increase.

Nevertheless, Talisman still suffered a 16 percent profit decline from last year, largely because of the sale of the Sudan properties. Profit for the period ended Sept. 30 was $126 million or 94 cents per share compared with $151 million or $1.08 per share a year ago. But the company also presented record cash flow for the first nine months of the year at $2.1 billion and promised continued growth through aggressive exploration.

“We have a lot on the go and a lot of it’s going our way and going well,” Talisman President Jim Buckee told analysts in a conference call. “Production is on the increase; there are discoveries and there are exciting wells drilling.”

During the third quarter, Talisman participated in 161 wells (gross). A total of 83 gas and 62 oil wells were drilled, with an average success rate of 90 percent.

North American gas production averaged 853 million cubic feet per day in the third quarter, an increase of 5 percent over the same period last year, including production from Appalachia. Liquids production averaged 59,612 barrels per day, a decrease of 3 percent over the year-ago period.

Talisman will remain focused on natural gas in its North American operations, as well as on relatively low risk oil projects.

Talisman continued its active program in the Alberta foothills area with 10 drilling rigs. Five of 34 wells (gross) planned for this year were drilled with a 100 percent success rate, testing at rates between 8-18 million cubic feet a day.

Three new gas wells were drilled in the Turner Valley, Alberta field. Alberta EUB approval was obtained for a new 20 million cubic foot per day sweet gas plant at Little Chicago in Turner Valley, allowing 10 million cubic feet per day (net) of shut-in sweet gas to flow. Construction is scheduled for the first quarter of 2004.

In Monkman, British Columbia, natural gas production averaged 87 million cubic feet a day, an increase of 8 percent over the same period last year with two wells now on production. According to Buckee, the second Monkman well completed earlier this summer didn’t quite meet expectations, but has been tied in and is now producing. Three rigs are actively drilling in the area, with two deep wells drilling.