Talisman puts profits into gas drilling

Gary Park

Petroleum News Calgary correspondent

Talisman Energy, declaring that its Sudan turmoil is “beyond us and gone,” and fueled by a 123 percent jump in second-quarter profits, is pumping another C$200 million into North American natural gas exploration this year.

The Canadian independent, with C$1.13 billion in its pocket from the sale of its Sudan operations, has a “lot of opportunities and we feel we should take advantage of them,” said Chief Executive Officer Jim Buckee.

Of the boosted gas budget, C$145 million will be directed to drilling Canadian properties and the balance to its recently acquired and thriving interests in New York state, all aimed at further growth in its gas volumes. Capital spending for 2003 is now projected at C$2.25 billion. For the second quarter, Talisman logged a 92 percent success rate from 43 gas and 56 oil wells in North America and increased gas output by 5 percent from a year earlier to 865 million cubic feet per day. Its U.S. subsidiary, Fortuna Exploration, has also entered an agreement with Total E&P USA to explore in the National Petroleum Reserve-Alaska, with Fortuna earning a 30 percent interest in the lands.

The company, in its latest financial report, said several large prospects have been identified and geological and geophysical work is “progressing in preparation for a 2004 exploration well.”

To the mid-point of 2003, Talisman has generated a record cash flow of C$1.45 billion, compared with last year’s C$1.23 billion.

Although Talisman shares took an 18 percent hit from the company’s announcement last fall that it would miss its 2003 production target and some analysts feel it has yet to fully restore credibility in its post-Sudan era, Buckee is hopeful that he can exit 2003 with output matching that of a year earlier, despite the loss of 60,000 barrels per day from Sudan.