Talisman Energy is a global oil and gas producer in a state of flux. It operates in three core regions: the North Sea, North America, and Southeast Asia. The company changed CEOs in mid-2012 and has adopted a new strategy--stop chasing production growth Read more
Talisman's new strategy is focused on improving returns on capital through more selective investment and cutting costs. Higher returns (versus merely growing production) are much more likely to improve the firm's languishing share price.
Talisman has a large, undeveloped acreage position in Southeast Asia, where high GDP growth and increasing electricity requirements should sustain demand for natural gas and liquid natural gas and maintain premium pricing.
Talisman's financing strategy relies on internally generated cash flows and asset divestitures to fund exploration and development. Low debt levels provide the firm flexibility in how it chooses to expand production. Read more
Talisman's stable production strategy can be viewed as a gamble that international oil and gas prices will remain at current levels, as it works improve cash flow through cost cuts. The company is clearly emulating the strategies of much larger oil companies, but doesn't have the legacy low-cost production or downstream assets to help support cash flow should oil prices fall.
Production delays and unplanned maintenance have historically plagued Talisman. Management has made efforts to counteract this trend, but building a performance-driven culture without sacrificing safety could take years.
Flattening forward price curves in oil and gas markets could diminish the company's ability to effectively hedge future production and leave future cash flows susceptible to increased variability. Read more
Management has demonstrated that it is a poor steward of shareholder capital. The company has produced unfavorable returns on invested capital for three of the past four years, despite elevated Brent Crude oil prices. Additionally, management has developed Read more
Talisman Energy, based in Calgary, Alberta, explores and develops oil and gas resources around the globe, including unconventional gas in North America and offshore oil Read more